The retail group hit €3.6bn in sales in 2023. The busy holiday shopping period last December even topped pre-pandemic numbers, and those sales continued to accelerate in the first quarter. That puts the company on track to hit €3.85bn in sales across the group, including the 18 regional Galeries Lafayette stores, by the end of 2024. To that end, the group has returned to profitability after the lean pandemic years and will invest 400mn euros on building improvements such as the facade of its Paris flagship, plus significant tech and omnichannel investments over the next five years. This year will also mark Galeries Lafayette’s 130th anniversary. The company has revamped the concept of the store on the Champs Elysees, with a more classical offering, as well as changed marketing tactics and increased communications spend. It will still serve as a space for emerging brands and new ideas, but they have added a more classical twists. The personal shopper concept was a success in trials at that store, and has since been rolled out to other locations. Foot traffic to the group stores has also bounced back, to 30mn visitors in 2023.
With the loss of Chinese tourists and the giant buses that used to deposit them in front of the Boulevard Haussmann flagship, that mix has shifted. Before the pandemic, about 33% of its customers were from China, while that number now stands at 20%. Those are mostly individuals, and fewer large groups. Those losses have been made up by French customers, which now make up 40% of the store’s customer base with a particular focus on local VIP clients. The remaining 40% are international tourists, with other Asian nationalities, such as South Korea, Japan and Thailand, filling in that gap. The loss of Chinese tourists and large groups also shifted the mix inside the store.
They revamped the first floor, with larger spaces for key luxury brands, including Chanel and Rolex, while removing some unnamed brands that had mainly appealed to Chinese customers. They added brands such as Bottega Veneta, Ferragamo, Patou, MaxMara and Victoria Beckham, and have added pieces from runway collections to up the fashion quotient. Those expansions came to the tune of about 200mn, with half coming from the group and the other half coming from the brands themselves. The store has also added a lounge and concierge services as it banks on bigger local spend. To differentiate the department store, they are seeking more exclusive brands and products.
The Jacquemus and Nike collaboration was only available at the brand’s flagship and the Haussmann store worldwide. Kim Kardashian’s Skims brand is only available at Galeries Lafayette in France. It opened a pop-up at its Nice, France, store when that brand arrived to amplify its exclusivity.
In 2019, about 1% of the company’s sales were online, while for 2023, it was about 10%. The company is also starting to test AI systems on several fronts, including efficiency on the customer service side, creating product descriptions as well as using it on image generation. It has also invested in developing its luxury resale channel in the Haussmann flagship through the Re-Store section, which was inaugurated in 2021. With 450m2 dedicated to circular fashion, the section generated €90mn in sales in 2023. In addition to expanding the luxury spaces, it has added new contemporary brands such as Jeanne Damas’ Rouje and Balzac, a young Parisian brand which only has one brand-owned flagship and is carried in three Galeries Lafayette stores nationwide. The shoe department has also been revamped. The category has seen a growth level upward of 30% and continues to accelerate with the move to a new floor and upscaled section.
With its massage, personal care and gym, the wellness space opened in 2022, appeals particularly to tourists who are staying in Airbnbs that do not have access to hotel services. For its next act, the store will expand the spaces dedicated to the growing category of menswear starting in 2025. The company is also expanding into new markets, with previously announced franchise partnerships in China and India. The objective is to make 15% of our turnover internationally by 2028. It stands about 10% now, with outposts in Doha, Dubai and Qatar. The group will continue to upgrade its 18 regional stores, including new approaches such as a shopping and entertainment complex in Annecy, where it includes other brands such as Uniqlo and a climbing wall.