Printemps may be one of the world’s oldest and most storied department stores, but for chief executive officer Paolo de Cesare, there is no looking back.
The Italian-born executive has overseen a wide-ranging overhaul of the retailer since taking the reins in 2007, following the sale of Printemps by French retail-to-luxury group PPR, since renamed Kering, to a consortium including Italy’s Borletti Group.
In 2013, the department store chain was sold again, this time to Divine Investments SA, a Luxembourg-based investment fund backed by Sheikh Hamad bin Khalifa Al Thani, the former emir of Qatar, whose other properties include London department store Harrods and Italian fashion label Valentino.
Since then, de Cesare has set in motion plans to become an even bigger, and more international, player on the retail scene.
Last year, Printemps opened its first new stores in 32 years — the first next to the Louvre museum in Paris, followed by a unit in the southern French city of Marseille. Next year, it will close four entire floors of its Art Nouveau-era store in Paris to transform the building into a temple for men’s fashion.
De Cesare said it’s all in the name: When founder Jules Jaluzot opened the store in 1865, he named it Au Printemps to evoke the renewal of spring.
“He wanted to sell everything that was new, that was fresh and interesting, so we had a mission of what we were supposed to do from the beginning,” the former Procter & Gamble executive said in an interview in his office, which overlooks the Boulevard Haussmann store.
Printemps has taken the theme literally for its anniversary festivities, starting with “Rose,” a mascot created by Japanese artist Hiroshi Yoshii for the occasion. The yearlong celebrations kicked off on March 20, the first day of spring, with the front of the store bathed in signature Printemps pink, with a floral decor of 5,500 artificial flowers, including roses, cherry blossoms and hydrangeas.
De Cesare plans to keep the concept going through the winter. For the store’s holiday campaign, he is breaking with its recent tradition of partnering with a single luxury brand by enlisting six major names: Lancôme, Longines, Burberry, Christian Louboutin, Sonia Rykiel and Evian.
He tapped choreographer Philippe Decouflé to bring to life a story centered on the Printemps Fairy, which has the power to conjure spring in the middle of winter, via window displays and a light show on the facade of the store.
In addition, Printemps will sell more than 200 exclusive limited-edition anniversary products created by partner brands around the theme of gold.
It promises to be a fitting end to a banner year. Though Printemps no longer publishes revenues, de Cesare said sales are up in the strong double-digits in the 2014-15 fiscal year, after a 3.9 percent increase the previous year.
“Despite the current environment, we continue to progress very well and, in fact, we finished a record year in 2014 and fiscal year 2015 is starting again to be exceptionally strong,” he said. The company’s financial year begins on April 1.
The ceo credits the store’s luxury positioning with helping it weather a tepid economic recovery in France, where sales of rtw have fallen for seven consecutive years. “We see domestic consumption being more challenged with marginal growth, but on the contrary, we see very strong double-digit growth from every side of the globe — Asia, Latin America, America, Middle East.
“I think the work that we have done in these last four, five years has really positioned Printemps as a top destination for the more sophisticated international customers,” de Cesare noted.
He estimated that tourists — half of which are from Greater China — now account for 40 to 45 percent of the retailer’s revenues. “Since the euro’s weakening in February, we have seen a significant acceleration,” the executive said.
The unit in the Carrousel du Louvre, located opposite an Apple store, has exceeded its goal of first-year revenues of 20 million euros to 30 million euros, or $22.6 million to $34 million at current exchange, he said, without elaborating.
Up next: A store in Cagnes-sur-Mer on the French Riviera opening in October, and the renovation of its Italie 2 and Nation branches in Paris.
Printemps spent around 300 million euros ($410 million at average exchange rates) on store upgrades between 2008 and 2013 and expects to invest a similar amount in the five years through 2019. The program is designed to help it achieve its target of sales of two billion euros, or $2.23 billion, by 2017, de Cesare has said.
“I hear a lot of retailers now — and it really makes me laugh — that think that they are repositioning in one year, or six months,” he said. “Our projects are really major renovations.”
Its latest plan is to transfer men’s — now in a mod- ern building on Rue du Havre — into the flagship.
“We believe men will be a key driver for ready-to-wear, accessories and luxury going forward,” de Cesare said. “We are very space-constrained today and definitely have a lot of [opportunity] to do much, much more.”
The renovation, due to kick off in 2016 and be complete in two years, will concern a total of around 215,000 square feet.
The project, which industry sources estimate will cost close to 100 million euros ($111.66 million), will increase the space available for men’s rtw and accessories by 50 percent to about 113,000 square feet. “It is something that is done at a level of quality, design and materials that frankly is possible thanks to the strong commitment we have from the new shareholders,” said de Cesare, who consistently sidesteps any direct reference to the Qatari royal family. The buyer’s reluctance to be officially identified caused deep concern among unions when the sale was revealed in 2013. Accustomed to France’s elaborate consultation process, staff representatives complained of a lack of transparency and raised fears of job cuts.
“Frankly, I think the [unions’] reaction was very disproportionate to the type of event that happened, and we believe one of the reasons was that there were competing offers to the sale of Printemps, and some of the unions…thought that the competing offers were more interesting,” de Cesare said.
He was referring to a bid by Galeries Lafayette to snap up Printemps, hoping to create a global retail powerhouse with estimated annual sales of 6.5 billion euros — a deal that would likely have attracted close government scrutiny.
The executive noted that far from laying off workers, Printemps has created 150 jobs in the last fiscal year. “We are more in a development strategy than a closure strategy,” de Cesare said, noting Galeries Lafayette with 64 stores versus 18 for Printemps, said it will close three loss-making stores in France this year and implement a voluntary severance program at its headquarters.
He said that French fashion e-commerce site Place des Tendances has been growing “in the high-double digits” since Printemps bought it from media firm TF1 Group in 2013. The site recently added beauty to its product offer.
De Cesare believes that in two to three years, e-commerce should account for at least 10 percent of revenues at Printemps Group.
The retailer is also scouting for locations overseas, although it is moving more slowly than Galeries Lafayette, which has openings planned in Istanbul and Doha, Qatar, in 2017 and Milan in 2018, and said recently that it hopes to add seven additional international locations by 2020.
“We don’t believe that the approach followed by many of our competitors is the right way,” de Cesare said. “Typically, they [do] a franchise agreement with a local partner that often has developed some real estate, and they need to put something there and they pay you a lot of money to be there. But that’s not how you build a long-term success.”
In the Eighties and Nineties, Printemps had affiliate stores in Japan, South Korea, Singapore, Malaysia, China, Taiwan, Thailand, Turkey, Saudi Arabia, Portugal and the U.S. — all since closed, except for Printemps Ginza in Tokyo.
“None of them worked, so there is really no value in saying you’re in a country if [you’re not] commercially successful…” de Cesare said, noting the Middle East could — fittingly — be the place where Printemps opens its next foreign outpost.
“The Middle East is one of the fastest, if not the fastest-growing retail areas in the world, so it is an area that we are looking at closely. But it’s not because of the shareholder, it’s because there is clearly a market opportunity there,” he clarified.
“If there is the right opportunity, we will look at it and we will go for it in general. I don’t want to get into the trap that some chains are in, where they say, ‘We need to open 10 stores a year, otherwise the business model doesn’t work,’” he cautioned. “It really got to a point where to achieve your finan- cial goals, you were just opening, opening, opening, just like the fragrance business keeps launching, launching and launching, and that’s not a healthy way of running your business.”
At home, one of the main challenges facing retailers is implementing a new law that will establish additional international tourist zones in Paris where stores can open on Sundays.
Printemps and Galeries Lafayette have been lobbying for the measure for years, but the government has watered down the original project and subjected the right to open on Sundays to approval by labor unions, some of which staunchly oppose the idea.
Printemps forecasts that opening on Sundays would allow it to create 1,000 jobs at its flagship alone. “The whole of Paris could benefit a lot from becoming an interesting tourist [and shopping] destination also on Sunday, which today is not the case,” he said.
Regardless of the outcome, the retailer will have to stay on its toes. Once Printemps gets through its current round of renovations, it will probably have to start the whole cycle all over again.
“There will be a lot of new things coming up in the digital area that we will need to start into account. Maybe we will need a huge click-and-col- lect. Maybe we will need ‘order in the store.’ What we’re seeing is that personal shopping is becoming a huge asset for us, so yes, we keep thinking and challenging,” de Cesare said. “I think the moment in which we will have no idea on how to improve our store, it means that we are close to the end.”