SALES LEAD GALERIES LAFAYETTE NET UP 16.8%
Byline: Robert Murphy
PARIS — Groupe Galeries Lafayette said Monday that full-year profit in 2000 grew 16.8 percent, to $83.9 million, up from $71.9 million a year earlier.
“The results surpassed our expectations,” Philippe Houze, co-chairman of the group, told reporters at a news conference here, adding that 2000 was particularly strong for retail activities.
The group, which also operates a financial and computer services arm, runs about 100 department stores under the Galeries Lafayette, Nouvelles Galeries and BHV banners, as well as the Monoprix grocery and variety chain.
In the distribution division, sales increased 5.3 percent, to $4.3 billion. Profits in the division, which have tripled over the last three years, were up 39.3 percent, to $72.6 million, said Houze. Dollar figures are converted from the French franc at the current exchange rate.
Sales at Galeries Lafayette stores were $1.9 billion in 2000, with the firm’s Boulevard Haussmann flagship generating $62.2 million. Houze said sales on the recently revamped designer floor — part of a $60 million storewide refurbishing project scheduled to be completed by 2002 — increased 30 percent.
Houze said fashion and accessories sales accounted for 29.4 percent of the group’s overall sales, with beauty and fragrances making up 8.2 percent. Food products accounted for 19.3 percent, home wares 12.8 percent, with the group’s various service areas making up 30.3 percent.
Looking ahead, Houze and Philippe Lemoine, the group’s other co-chairman, projected 2001 profit growth of 15 percent.
Without disclosing details, they said the firm was studying opportunities to expand outside of France and hoped to generate 10 percent of total sales outside France by 2003. That would be double their current levels.
Meanwhile, Houze said that the group has its sights on several of the 18 stores here, which London-based chain Marks & Spencer last Thursday announced it would close as part of a massive restructuring plan. Houze said the firm was particularly keen on acquiring M&S’s Boulevard Haussmann unit, across the street from its own Galeries Lafayette flagship.
“It’s an opportunity we must seize,” said Houze. “We have already contacted Marks & Spencer about taking over certain stores.”
(M&S also said it was putting its Brooks Bros. and Kings supermarket units up for sale, pulling out of U.S. retailing. For a related story on M&S in France, see related story this page.)
Houze also said the group would aggressively revamp its existing stores over the year, sprucing up products and services in order to give units a more luxurious bent.
“In recent years, a revolution has occurred in the way people shop,” said Houze.
“Luxury used to be the daily bread of the elite; now it’s exceptional fare for the masses. In order to increase sales, we must cater to these changing buying habits.”
Houze said that part of the group’s strategy would entail supplying all of its stores with the same products, many of which are currently available only in Paris flagships.