International operations to contribute 25% of Galeries Lafayette’s revenue by 2030: Nicolas Houze

Nicolas Houze (executive chairman, Galeries Lafayette Group), the fifth generation of the French luxury departmental store chain, Galeries Lafayette, is determined to do whatever it takes not just to preserve his 130-year-old family business but also to take it to the next level at a time when most luxury industry connoisseurs have written off the departmental store format. In a conversation with Fortune India, Houze says, while the departmental store format is ideal for an emerging luxury market like India where consumers can experience a plethora of brands, innovation is the name of the game in the matured markets. “As new trends emerge, we have to adapt,” he says.

Excerpts:

Galeries Lafayette is known to have reinvented itself post the pandemic. Can you tell us how you have evolved?

The Covid-19 inference was quite tough. The department stores were qualified as non-essential businesses, and we were closed for 100 days. Being part of a fifth-generation 130-year-old family business, we chose to look long-term. We said once we are open, we will make sure Galeries Lafayette will recover and we will continue to be the leader in Europe and other parts of the world. We decided to invest a lot on our flagship store in Paris. We decided to make sure that we will address all the customers that we are targeting, and in fact, we have made sure that when they are able to come back to France, they will find in Galleries Lafayette what they want.

We have been working with the fashion designers in the shoe department. We have opened a new wellness section, and we are still continuing to work on that because next year we will redo the main building. It’s a long story, and we will continue to invest. What is sure is that since 2021 (after the worst part of Covid-19 was over), we have been growing in Paris on a regular basis, we have been growing our customers, both French and international (American, Chinese and Indian). Last year in 2024, we have been able to redo the figures were doing before.

Can we talk about your global expansion strategy?

India is the first country we have entered post the pandemic. We are willing to open a second store in Delhi, but we are still looking for the best place. We are looking at the longer term, because we don’t want to make mistakes. The store in Mumbai, it’s a seven-year story. We want to make sure when we enter a country it is a success.

We have 57 stores in France (19 directly operated by us, 35 franchise) and 10 around the world mainly, Europe, Middle East, China and now India.

How much do global operations contribute to your overall revenue?

Previously, before the Covid-19 pandemic, international was 10% of our total revenue. The goal is to make sure 25% of the entire business comes from our international operations by 2030.

When most luxury brands prefer to have standalone stores, you have chosen to continue with the departmental store format. What makes you believe in this model?

The departmental store format is part of our story, part of my family. We are strong believers of the departmental store model, we have been doing it for the past 130 years and we would be doing it for the next 130 years. Of course, brands open their own stores, but if you look at a country like India, where real estate is difficult to get, we can be the house of brands, house of fashion. That’s the heart of what we are doing, being the host of fashion and luxury. We have 270 brands at our store in India, 70% exclusive to the market. I am sure once we will open, new brands will want to enter the market and come to Galeries Lafayette in India.

Of course, in established markets such as France or Europe, it is much more difficult as there are many department stores and within that we are one of the big ones. But in new emerging, fast- growing markets, this kind of business will be an accelerator for fashion. We are a strong believer in our model and we will stick to our model. We are also entering omni-channel, we are doing business online, making sure that our customers can keep contact with Galeries Lafayette when they are at home, with their mobile device. We are proud of our stores and we think they play a role and we believe this role will continue in future. Of course, we will adapt to new categories, new brands.

You have recently launched a wellness section at your store in Paris. What’s the rationale?

We want to give new experiences to our consumers. During the Covid-19 pandemic, people became conscious about wellness. We have a large store in Paris (7,00,000 sq.ft.), so we have space to dedicate to wellness. It’s working very well. I am not sure if we will be able to expand these kinds of categories around the world.

How different is Galeries Lafayette Mumbai from your store in Paris?

We had to adapt to customers, their habits. The Mumbai store is just 90,000 sq ft and we only have 270 brands, while in Paris we have more than 2000 brands. We are a house of fashion and brands, so, of course, we have French brands and other international brands, but we have local luxury brands as well.

The evening wear in each market, for instance, is different. So, we need to have local luxury designers too.