PARIS — Pushing forward with plans to reduce its reliance on sales in the domestic market, Galeries Lafayette is shifting to a franchise model for nearly half of its stores in France.
The department chain said it will sell 22 stores, mostly located in smaller cities across the country, to real estate operator Financière Immobilière Bordelaise.
The move comes as the company seeks to rejig the classic department store model to suit a digital era.
“Since 2014, we have made a number of important strategic moves based on our three key levers — digitization, internationalization and network reinvention,” said Nicolas Houzé, chief executive officer of Galeries Lafayette and BHV Marais, in a statement. The executive said the company seeks to fashion itself as an “omnichannel retail leader with French roots.”
Following the transaction, the group will operate 28 of its own department stores and 27 belonging to franchise owners.
Galeries Lafayette, which revealed plans last month to open a store in Luxembourg next year, will work with the franchised branches in France for activities like purchasing, visual branding and sales promotion. The group is expanding into China and the Middle East with a five-year expansion goal of 20 stores outside its home market.
Owned by French businessman Michel Ohayon, Financière Immobilière Bordelaise is a retail property investment and development company that is also involved in high-end hotels and wine production.
Financial terms of the transaction were not disclosed.