Three years after Galeries Lafayette handed over the management of 22 regional stores to real estate company FIB, the French department store chain is planning a new franchise operation, this time involving 11 stores.
Seven of the eleven department stores will come under the management of SGM. This real estate company, which owns and operates a dozen shopping centres in city centres in France, would take over the stores in Angers, Dijon, Grenoble, Le Mans, Limoges, Orléans and Reims, writes French newspaper Le Figaro.
Three other stores, specifically those in Pau, Rosny and Tours, will be acquired by Hermione People & Brands, the retail division of FIB, owned by businessman Michel Ohayon. In 2018, Ohayon already acquired 22 Galeries Lafayette branches in medium-sized French cities.
Finally, the department store in Avignon will be entrusted to the franchisees who operate the store in Béziers, Philippe Semperé and Nicolas Chambon.
The operation will make the department store chain more agile, according to the company. It allows it to generate cash while maintaining the brand's visibility and reputation throughout France. Galeries Lafayette plans to focus primarily on its largest stores, accelerating its omnichannel strategy and targeted international expansion.
"The crisis we have just gone through is an opportunity to accelerate our transformation. More than ever, we are convinced of the relevance of the department store model, and we want to strengthen it through different formulas that are more specialised and have a stronger local base", said Chief Executive Nicolas Houzé in a communiqué.
The 11 department stores involved represent an annual turnover of around 200 million euros. According to the company, the transaction, which should be completed early next year, will not impact employment.