BEIJING: French department store chain, Galeries Lafayette, is planning to open about 10 stores and achieve revenue of €1 billion ($1.13 billion) by 2025 in China, a top company official said.
“We are targeting around 10 stores in China. We think we could reach €1 billion turnover from China, and make China the biggest market after France,” said Nicolas Houze, chief executive officer of Galeries Lafayette and French concept store BHV Marais, who hopes to achieve this goal by 2025.
The Shanghai store will be the company’s second in China after a similar one in Beijing and is scheduled to open in autumn.
Galeries Lafayette is one of eight iconic brands managed by the Galeries Lafayette Group. The group reported sales revenue of €4.5 billion last year.
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Since the launch of its iconic Galeries Lafayette store (Galeries Lafayette Paris Haussmann) in 1894, the Paris-based department store alone has received 37 million customers on average per year, with half of the foreign customers coming from China, according to Houze.
Qi Xiaozhai, head of the Shanghai Society of Commercial Economy, said the Galeries Lafayette in Paris has been a landmark for global consumers, but in Shanghai, the store may face some challenges before success. Qi’s concerns are based on the fact that several multinational retail brands have performed less well than expected in China.
According to Euromonitor International data, revenue of department stores in China grew from $153.3 billion in 2014 to $159.57 billion last year, but it forecast the same to fall to $148.49 billion by 2023 after peaking in 2020 at $160.2 billion.
“I think there is still a feeling among high-end retail operators that there is room for more premium retail in China. While some may argue that commercial retail space is overbuilt in China, there are still opportunities for developers to select underserved locations,” said Ben Cavender, principal of Shanghai-based China Market Research Group.
The article originally appeared on the China Economic Net
Published in The Express Tribune, March 27th, 2019.
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