Case Study: Galeries Lafayette
Profile, History, and Status Quo
In 1893, Théophile Bader founded Galeries Lafayette; in 1912, the famous flagship department store (“grand magasin”) on Boulevard Haussmann in Paris was opened which is the largest of Paris’ 12 major department stores. Today, the Galeries Lafayette group operates the following business segments: Figure 10.1
Galeries Lafayette group
In 2005, group turnover totalled 4,493 million EUR, up 0.7 % from the previous year. Around 35,000 employees work in one of the group’s 422 stores or 56 affiliates. Galeries Lafayette's total surface area of nearly 500,000 m2 includes a number of outstanding features, like the famous neo-Byzantine dome built in the 19th century atop the building on Boulevard Haussmann. The stores outside Paris are centrally located in major cities across the country. The repartition of the group’s turnover by business segment is as follows: Galeries Lafayette: 31,8 %, Bazar de l’Hôtel de Ville: 10,2 %, Monoprix: 31,4 %, LaSer: 22,6 % and other: 4 %. In accordance to its former advertising slogan “Il se passe toujours quelque chose aux Galeries Lafayette!” (“Something is always happening at Galeries Lafayette!”), a number of sub-brands to the Galeries Lafayette have been created in Paris, which harness the transfer of the brand Galeries Lafayette: n
Lafayette Homme (2001) – men’s apparel
Lafayette Gourmet (2002) – food
Lafayette Maison (2004) – decoration and home improvement n
Lafayette V.O. (2004) – kids and teenagers.
In Paris, the so-called Haussmann, Homme, Gourmet, and Maison stores cover a combined total of 68,000 m2—the Western world's largest retail outlet and Europe's biggest store in terms of sales. After the withdrawal from operations in Tokyo, Moscow, Singapore, Bangkok and New York, the currently only international activity is the Galeries Lafayette department store in Berlin with its famous glass front architecture on Berlin Friedrichstraße which was opened in 1996. Ten years after its foundation, about 250 employees work at Galeries Lafayette Berlin, the secret embassy of France, as it is sometimes called. The sales area comprises 8,000 m2 on five floors. However, since the launch in 1996, the Galeries Lafayette Berlin has only recently been able to operate profitably. After quarrels between the former major shareholder families Meyer and Moulin, the Moulin family and the French bank BNP Paribas bought all remaining public shares of the group; as a result, Galeries Lafayette shares are no longer traded at the Paris stock exchange CAC40 since July 2005. Despite this new ownership structure, the group’s strategy remains based on the following pillars: n
department stores (Galeries Lafayett, BHV)
city centre supermarkets (Monoprix)
consumer credits and customer loyalty programs (LaSer).
Instore marketing strategy at Galeries Lafayette – “theme worlds” When Marks & Spencer closed its Paris store in 2001, Galeries Lafayette bought the site and built its home furnishings department store Lafayette Maison there. This left the basement, the former home furnishings floor at the Haussmann empty, where Lafayette V.O. (for “version originale”), a shopping world for 15- to 25 year-olds, was implemented. Lafayette V.O. has led to a major rethink in the way the rest of the store is merchandised. Galeries Lafayette has always been a “house of brands”, a “temple of fashion”, but it has also always been perceived as a destination for the high-end shopper. To an extent, this is reinforced by the flagship store’s belle époque architecture with its stained-glass dome which has led to the impression of Galeries Lafayette being the “grande dame of Paris retailing” (Ryan 2005). Since 2001, however, the “retail renaissance” (Costello 2005, p. 21) of Galeries Lafayette has been implemented aiming to create different shopping worlds in a real-life experience instead of traditional departments. Galeries Lafayette tries to evolve from a...
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