* Plans IPO of CFAO specialised distribution unit this year
* Part of PPR strategy to focus on lifestyle brands
* Shares up 2.08 percent, new high since July 2008 (Adds no comment on value, shares, trader comment)
PARIS, Oct 7 (Reuters) - French retail and luxury group PPR plans to launch an initial public offering of its CFAO distribution unit on the Euronext stock exchange in Paris by the end of the year, provided market conditions are favourable.
PPR, which owns brands like Gucci and Yves Saint Laurent, said it expected to sell a majority stake in CFAO, a leader in the specialised distribution of goods like pharmaceutical products and cars, and which operates mainly in Africa.
"This project is a further step in PPR's growth strategy to focus on a coherent group of internationally recognized lifestyle brands, both in the broader consumer and luxury markets," Chairman and Chief Executive Francois-Henri Pinault said in a statement on Wednesday.
A company spokesman had no comment on a report by the Wansquare media site that the unit could be worth 500 million euros ($735.1 million).
PPR shares rose over two percent, following a 94 percent rise this year taking its market capitalisation to over 11 billion euros.
The share hit a high of 93.25 euros, a level last seen in July 2008.
"The some 500 million euros would help the group to respect its banking covenants and that would be positive for its debt rating. The market wants PPR to become a pure luxury player which would lead to a re-rating of the share," a trader said.
PPR has a BBB- rating from Standard and Poor's since 2002.
CFAO is active in 35 countries, and has more than 10,000 employees. Its consolidated turnover stood at 2.864 billion euros last year, up from 2.534 billion in 2007. (Editing by Rupert Winchester)