Byline: Katherine Weisman

PARIS — Galeries Lafayette is increasingly being drawn into the race for Internet market share.
“Our objective is to be a major player in clicks and mortar,” said Philippe Houze, co-president with responsibility for retail operations. “We have to continue to develop our traditional operations, but reinforce our skills in e-commerce.”
Galeries said it’s teaming up with a number of other European retailers to open a beauty portal by yearend, Houze said. Declining to identify the other parties involved, he said, “It’s very confidential and we are just in the development phase.”
The Galeries Lafayette flagship has a site that sells some products, but remains principally an institutional portal. Last year, the Galeries group invested $36.8 million in Internet developments.
Other e-commerce projects include bringing online home delivery to its Monoprix-Prisunic stores, which combine a grocery store with sections for women’s, men’s and children’s apparel; beauty goods, and home accessories. There are also plans to develop a travel and leisure site linked to the stores’ Points Ciel frequent-buyer program in which participants can use their points for online purchases.
The Galeries Lafayette flagship began overhauling its fashion floors and is spending about $60 million over four years to reinforce its fashion leadership, executives said. New luxury brands, including Louis Vuitton, Guerlain and jewelers Boucheron and Poiray, accent the main floor and the store also created a new concept for its men’s department. Late last month, the store unveiled new merchandising for designer labels and results thus far are very promising, Houze noted.
Last week the company disclosed that its brick-and-mortar operations registered 1999 net operating profits of $79.7 million, 19 percent above the prior year, the company said last week.
Including a series of extraordinary items, net profits were down 3.2 percent to $79.6 million, said group co-president Philippe Lemoine at a press conference at which the company disclosed its 1999 financial results.
Dollar figures have been converted at current exchange.
Consolidated sales for Galeries Lafayette rose 3.8 percent to $5.4 billion, as previously reported. Galeries is a group made up of the Galeries Lafayette and BHV department stores, the Monoprix-Prisunic variety stores and the service businesses of Cofinoga and LaSer.
The group invested $127.4 million in store renovations last year and is budgeting $161.8 million for the current year. Most of these expenditures will be on stores located outside of Paris that are in need of substantial work.
Apparel sales for the group’s department stores rose more than 6 percent last year, well ahead of the average performance in France, where sales were flat.