Iconic French department store chain Galeries Lafayette is to sell 22 regional stores to a private firm controlled by businessman Michel Ohayon, converting them into franchise operations. The move cuts its owned stores to 28 and boosts franchise units across France to 27.
No price details were provided in a release but it said the buyer is privately-held Financiere Immobiliere Bordelaise, based in Bordeaux and controlled by Ohayon.
Galeries Lafayette CEO Nicolas Houze, also head of the BHV store group, said the move extends a number of important strategic changes for Galeries Lafayette based on three key levers - digitalisation, internationalisation and network reinvention. These are designed to embark on the chain's, "model of a deep-reaching transformation and adapting to customers' new expectations while realising our vision: building a responsible omnichannel retail leader with French roots and international outreach."
To achieve this strategic objective the store chain has taken several measures over the past three years, which include enhancing the network's digital capabilities, kicking off an extensive remodelling program, rolling out its Galeries Lafayette Outlet format, closing the two largest loss-making stores or relocating stores in places where potential was declining.
Houze said the latest move marks the start of the last phase of Galerie Lafayette's Ambition 2020 plan. "It is an exciting opportunity for these 22 stores to tap into fresh momentum," he said. These stores can continue to count on FIB experience and expertise, and to rely on the Galeries Lafayette brand's strength. The chain is already familiar with this arrangement, operating five subsidiaries stores - in Beziers, Langon, Menton, Perpignan and Rennes. "This project would also enable the company to keep its extensive national coverage, which one of its hallmarks and a differentiating factor in the omnichannel strategy it is deploying," the release said.
Ohayon, active in commercial and hotel real estate, is ranked France's 130th most wealthy person. Via FIB, he also owns the Waldorf Astoria-Hotel Trianon Palace in Versailles and the Sheraton in Roissy near to Paris's main Charles de Gaulle airport.