PARIS — “There is always something happening at Galeries Lafayette,” goes the French department store’s slogan — and that was certainly the case on Monday.
The developments came thick and fast at the Boulevard Haussmann institution as Galeries Lafayette reported it has parted ways with Paul Delaoutre, the chief executive officer of its department store division for the past 10 years, to hand over the scepter to Nicolas Houzé, who has served as Delaoutre’s deputy since January 2012.
“Nicolas Houzé represents the fifth generation of the founding family. After having sold [supermarket chain] Monoprix and [consumer credit company] LaSer Cofinoga, the group is focusing on its core business. The idea is to have Nicolas write the next page of the story and give new impulse to the strategy,” a spokeswoman for Galeries Lafayette said, while adding that Delaoutre and the group separated on “good terms.”
The 38-year-old Nicolas Houzé, who is the son of Philippe Houzé, Groupe Galeries Lafayette’s ceo, has been involved in the family business since 1998. He most recently became president of French jewelry chain Didier Guérin, which Galeries Lafayette acquired last year as the first volley of a strategy to make more purchases of mid- to high-end brands in the ready-to-wear and accessories segments.
Already operating in 59 locations in France, and three abroad — in Casablanca, Morocco; Berlin, and Dubai — Galeries Lafayette is set to open a branch in Turkey in 2015.
Meanwhile, its quest to acquire rival department store Printemps, its next-door neighbor, took a patriotic turn on Monday.
In an op-ed letter published in the French financial daily Les Echos, Philippe Houzé beat the drum for a “French solution,” claiming his group offered “the best guaranties” for Printemps’ employees and their jobs as well as “for France with regard to growth and development.”
Galeries Lafayette’s bid to acquire the 70 percent stake of Deutsche Bank’s real estate asset-management division, RREEF, for 1.8 billion euros, or $2.38 billion at current exchange, was rejected late last year in favor of a buyout via an unidentified group of Qatari investors and Borletti Group, which owns the other 30 percent of Printemps and intends to hold on to it.
Borletti and the Qataris have been in “exclusive negotiations” since February.
Although Houzé did not refer to the two negotiating parties by name, he called any alternative to a French industrial offer a “baroque and opaque financial construction with economic and social risks,” adding that “as soon as one starts to touch what is profoundly anchored in our culture, emblematic to Paris and France and what affects our lifestyle, it is necessary to guard and ensure a long-term French solution.”
A spokeswoman for Galeries Lafayette confirmed that Houzé reached out to the Qataris to join forces. “We will see what happens,” she said.
A source close to the Borletti dossier reiterated that the negotiations with the Qataris have remained indeed “exclusive.” The stakeholders have set their first appointment with the works council at Printemps for March 26, with the Qataris’ bid on the agenda of the second meeting to take place within about ten days of the first.
Labor unions at Printemps have expressed their fears over possible job cuts following an eventual change in ownership. The UGICT-CGT, which represents the executive level, fears a possible sale of less profitable Printemps branches and the transformation of Printemps into a luxury commercial center, with less-upscale brands no longer part of the portfolio, should the Qatari investors take over.
In a written statement, the secretary general of UGICT-CGT consequently voiced his preference for a French owner.
Sources close to the Borletti-Qatari talks suggested that “jobs would not be lost,” arguing that a Galeries Lafayette takeover could involve as many as 1,000 posts being eliminated, a fear shared by the Printemps union L’UNSA.
“Having a monopolistic position, the Galeries Lafayette will do what they want with the suppliers; posts at the buying center would most definitely be very quickly at stake,” Georges Das Neves, the union’s secretary general said.
Das Neves added that “workflow and buying on their own represents 300 jobs [to] which you can add marketing, finances and human resources for a total of 500 jobs.”
According to French media reports, Philippe Houzé is also lobbying to obtain the government’s support for a project that would turn the Boulevard Haussmann, home to both Printemps and Galeries Lafayette, into a “tourist zone,” allowing shops to stay open on Sundays and create 1,000 voluntary posts with double pay, a concept that does not strike a chord with Das Neves.
“Most employees come from outside, they don’t work for Printemps, they work for the brands, and have very [limited] rights. Their situation is already bad, it would get worse,” said Das Neves, noting that “the Qataris are very concerned with their image in France.”
“We are not afraid of the Qataris, we are owned by foreigners already, and we are doing well,” he said.
Regarding a possible transformation of the Printemps department store into a different business model, Das Neves added: “We do not fear any such thing. The Qataris already took over Harrods in London and they did not transform it into a [commercial center]. It’s still a department store.”
The flag-waving comes against the backdrop of the French government’s efforts to secure more Qatari investments in France, which is Qatar’s second-largest foreign investment destination after Great Britain. French Minister for Foreign Trade Nicole Bricq and a delegation of 25 French companies visited Doha last week to push for stronger business ties between the two countries, which will reportedly reach their peak in 2014 and 2015.
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