Corona crisis costs Galeries Lafayette one billion euros

Corona crisis costs Galeries Lafayette one billion euros
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Although the French department stores have reopened since 29 May, traffic at Galeries Lafayette is still very calm. The corona crisis will cost the iconic department store group a total of more than a billion euros, causing the group to apply for state aid.

 

Half of turnover from tourists

Galeries Lafayette had to close the doors of its almost sixty department stores because of the lockdown. A smaller establishment on the Champs Elysées (with about one tenth of the surface of the famous department store on the Boulevard Hausmann) was allowed to reopen as early as 11 May, but the other branches had to wait until 29 May to be allowed to reopen.

 

But even now they remain quiet: since the reopening, the number of visitors has dropped by around 20 % and turnover has fallen sharply due to the absence of foreign tourists. In the branch on Boulevard Hausmann, for example, more than half of the turnover comes from foreign shoppers, CEO Nicolas Houzé told French radio station BFM Business.

 

300 million euros government guarantee

Opening hours are currently still limited and other major retailers in Paris, including the Apple Store on the Champs Elysées, have not even reopened. "International customers may stay away until the end of the year or longer, and that will weigh heavily", Houzé said. In total, Galeries Lafayette is estimated to lose at least one billion euros in revenue due to the corona crisis.

 

The department store chain is therefore applying for state aid, in the form of 300 million euros in loans with government guarantees. Galeries Lafayette is already in talks with banks to this end.