Apr 3, 2015
Galeries Lafayette in Paris suffering from lower spending by Chinese and French customers
Apr 3, 2015
Les Galeries Lafayette is suffering in its Paris store from lower spending by both Chinese and French customers, according to an interview with group CEO Nicolas Houzé published Wednesday in French newspaper Le Figaro.
He said that the number of Chinese customers hasn’t declined but, "their average check-out basket fell by more than 25% due to the anti-corruption measures that has led to lower spending by Chinese customers, mainly for watches and jewelry." But the "decline in value was largely offset by other Asian customers" (from Thailand, Taiwan, Malaysia, etc.) as well as those from the Middle East, according to Houzé.
Moreover, even if spending by Russians, Brazilians and Indonesians "declined, sales made with tourists increased overall by about 5%." In contrast, "expenditures by French customers at the boulevard Haussmann store were down by 5%," said Houzé.
In the interview with Le Figaro, Houzé once again expressed his support for remaining open on Sunday, as soon as the law proposed by Minister of the Economy Emmanuel Macron extending the number of days that business are allowed to remain open, "takes effect."
Negotiations with employee representatives are ongoing at the company as it prepares to implement the measure. "We will create 500 jobs and will offer very favorable conditions for employees who want to work on that day, making it on a volunteer basis and paying double," says Houzé in the interview.
He emphasized that the store on Boulevard Haussmann "generates more than 50% of its turnover with foreign customers." "Remaining open on Sunday is an essential element of remaining competitive with stores like Harrods and Selfridges (London), La Rinascente (Milan, Rome) or El Corte Ingles (Madrid, Barcelona)," he said. He cites the example of Nice, where the Galeries Lafayettes is open 52 Sundays out of the year and where the group generates 10% of its sales on Sunday with 80% of customers being foreigners.
Asked about a certain "delay", he announced the launch in late April "of a new site […], a real fashion website" that will sell the group’s brands as well as those of its partners (Cartier, Lancôme, Sandro, Maje, etc.). "By 2020, our goal is to offer our Haussmann Store’s entire range."
Regarding the group’s fleet of real estate, Houzé said that he doesn’t intend to sell any of its retail space, and instead wants to invest 150 million per year in its development. "The improvement of our results will be through operations. Our goal is to double store profitability by 2020," he added.
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