GALERIES: SALES DROP BID ON M&S
Byline: Robert Murphy
PARIS — Groupe Galeries Lafayette, the French retailer, on Monday reported that sales have dropped 10 percent at its flagship on Boulevard Haussmann since Sept. 11.
In a separate development, the group revealed it has made a bid to acquire embattled British retailer Marks & Spencer’s 18 stores in France, which employ 1,700 people. Philippe Houze, the group’s co-chairman, declined further comment due to a confidentiality agreement with M&S, which earlier this year said as part of a massive restructuring plan it would close all of its stores in continental Europe and the U.S., including Brooks Brothers and King’s supermarkets.
Galeries Lafayette was among the first French retailers to express interest in M&S locations. Diversified retailer Pinault-Printemps-Redoute has also suggested it was eyeing a certain number of M&S stores.
Houze told a news conference that the retailer expected sales at its Boulevard Haussmann location to suffer for the remainder of the year because of the terrorist attacks. Houze said the expected 5 percent decline would have scant effect on the group’s full-year performance taken as a whole.
“Perfumery and accessory sales have been hardest hit,” said Houze. “Both are attractive categories for tourists, and we’ve seen a sharp decline in tourism — especially Americans.”
Sales to tourists account for about 35 percent of yearly sales at the Boulevard Haussmann store, with most of that business generated by American tourists.
As for the other 60 Galeries Lafayette stores in France, Houze said he expected business to continue as usual: “The French, after a few slow days, have continued to shop.”
The remarks came as Houze and Philippe Lemoine, the group’s other co-chairman, reported first-half net profit increased 40.8 percent to $22.6 million. Operating profits were up 14.6 percent to $64 million, compared to $55.8 million during the same period last year. Dollar figures are converted from the euro at current exchange.
Revenues during the first six months increased 6.2 percent to $2.3 billion. Galeries Lafayette businesses include about 100 department stores under the Galeries Lafayette, Nouvelles Galeries and BHV banners, as well as the Monoprix grocery and variety chain and a financial and computer services arm.
For the Galeries Lafayette and Nouvelle Galeries stores, sales for the first six months, through June 30, were $885 million, including $302 million at the Boulevard Haussmann flagship. For the eight months to Aug. 31, sales were $1.17 billion, including $395.5 million at Haussmann.
Houze said that the group would stand by its full-year goal of double-digit growth. The group’s stock, traded on the Paris Bourse, closed up 0.2 percent to $124.