PARIS — Galeries Lafayette announced today the launch of a project to grant franchises for 11 stores of its retail network in France to partners selected for their strong local roots. The objective is to adapt impacted stores to local customer expectations.
The stores included in the project generate a cumulated 200 million euros turnover annually — one tenth of Haussmann flagship’s 2 billion euros takings — but are nonetheless at the heart of the retail environment of the medium-sized French cities they are located in.
Seven locations, including premises and operations, will be sold to Société des Grands Magasins, a family-owned company specializing in high street retail spaces.
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Hermione People & Brands, the retail arm of property investment and development company Financière Immobilière Bordelaise Group, will take over the operations of three stores, adding to the 22 stores they purchased in 2018.
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The business assets of a store located in the Southern French city of Avignon will be turned over to Philippe Sempéré and Nicolas Chambon, local entrepreneurs who already operate another franchise in Southern France.
This comes as a continuation of a strategy aiming at refocusing investments and efforts on the main flagships, omnichannel strategy and expansion outside France.
“The [pandemic] crisis we have just experienced offers an opportunity to accelerate our transformation. We are convinced more than ever that the department store model is still relevant, and we wish to move forward with it using approaches taking advantage of stronger local ties and improved specialization,” said Nicolas Houzé, chief executive officer of Galeries Lafayette and BHV Marais, in a statement announcing the project.
The project should not have any impact on employment and has been presented to employee representatives. Newly franchised stores will continue to have access to the full fashion offerings, be included in marketing campaigns and in-store events.
By early 2022, Galeries Lafayette expects to operate 19 stores directly and 38 as franchises.