THE WHAT? Galeries Lafayette has announced that it plans to grant franchises for seven locations to Societe des Grands Magasins.
THE DETAILS The deal would cover stores in Angers, Dijon, Grenoble, Le Mans, Limoges, Orleans and Reims and comprises the sale of premises and operations.
At the same time, existing franchisee, Hermione People & Brands will takeover the stores in Pau, Rosny and Tours.
The project is expected to complete by the end of next year, with Galeries Lafayette then responsible for 19 stores directly, with a further 38 operated as franchises.
THE WHY? The initiative aims to reinvigorate these high-quality commercial and property assets by entrusting them to partners with strong local roots who are well placed to adapt each store to customer expectations in their region, Galeries Lafayette said. Nicolas Houzé, Chief Executive Officer of Galeries Lafayette and BHV Marais, commented: “The crisis we have just experienced offers an opportunity to accelerate our transformation. We are convinced more than ever that the department store model is still relevant, and we wish to move forward with it using approaches taking advantage of stronger local ties and improved specialisation. The new phase we are entering today with this project to franchise 11 of our stores in France is in keeping with this perspective and is unquestionably a win-win solution, for us, for our franchisee partners and for the stores concerned. We will continue to raise the profile of the Galeries Lafayette brand and its fashion expertise as a key high street fixture in mid-sized French cities, while giving fresh impetus to these stores thanks to the involvement of very active partners. With 19 stores operated directly and 38 as franchises, we would reach a new balance in the management of our store network in France. As a responsible employer, we will remain fully committed to supporting our employees over the course of this project, in close collaboration with employee and union representatives.”