Galeries Lafayette Details 2013 Beijing “Reboot,” China Expansion

Galeries Lafayette Beijing Will Reportedly Open September 1, 2013

Chinese tourist-shoppers congregate at shopping malls like the Galeries Lafayette in Paris

15 years after the Parisian luxury shopping mainstay Galeries Lafayette opened a Beijing outpost on Wangfujing, and nearly 14 years after the location shuttered due to disappointing sales, more details are emerging about its return to the Chinese capital and plans for nationwide expansion.

First announced in 2010, and further elaborated upon last summer, the new Galeries Lafayette Beijing is slated to open on September 1, 2013 in Beijing’s Xidan district, a partnership with the Hong Kong fashion retail powerhouse I.T.

More than anything, the re-entry of Galeries Lafayette into the mainland China market boils down to greater confidence that Beijing shoppers are far more brand-savvy and sophisticated now than they were in 1997. Like Gucci – which made a low-key return to Guangzhou in 2011 after a similar failure eight years ago — Galeries Lafayette is ready to give the market another shot. However, the new Xidan location will be anything but low-key. Expected to comprise 18,000 square meters, the Beijing location will be the group’s largest after its flagship Paris store on Boulevard Haussmann.

Though new info has been relatively scarce over the past year, Thierry Vannier, director of international promotion for Galeries Lafayette, spoke to Beijing Business Daily earlier this month about next year’s grand re-entry (translation by Jing Daily team):

Beijing Business Daily (BBD): This is not Galeries Lafayette’s first time entering the China market. With the new location, what expectations do you have?
Thierry Vannier (TV): The market conditions weren’t mature enough before. Now, China’s economy has gone through tremendous change, and I think we’ll see better results than ever before when we open next year in Xidan. Within the next five years, we will open 16 stores in China.

BBD: The global economic situation remains fragile, and recent data shows a slowdown in Chinese luxury consumption. How will Galeries Lafayette deal with the fallout?

TV: The economic situation is always fluctuating, and stores may hit rough patches, but eventually the situation will get better and we need to grasp opportunities. As far as Galeries Lafayette is concerned, we believe in the potential of the Chinese market.

BBD: Do you think the rise of Chinese fashion designers will have an impact on Galeries Lafaytte?

TV: Many Chinese designers are doing a good job nowadays, and more of them are taking part in fashion events in France. We’re happy to see this type of exchange, because when Chinese designers get home from France they’ll bring new ideas to Chinese consumers, helping them have a better understanding of fashion.

When they have a better knowledge of fashion, they’ll be more likely to become part of Galeries Lafayette’s customer base in China.

Paul Delaoutre, chief executive of Lafayette, spoke at the opening ceremony of The 2011 Xidan International Fashion Gala (Image: Beijing Business Today)

Galeries Lafayette is pinning serious hopes on Xidan as the anchor for its nationwide China expansion over the next five years. Speaking to Beijing Business Today last summer, Galeries Lafayette CEO Paul Delaoutre said the fact that brands such as Louis Vuitton, Gucci, Loewe and others have set up shop in Xidan led his company to decide the area shows “tremendous business opportunities.”

Despite the group’s continued optimism, it’s clear that Galeries Lafayette learned its lesson on its last, ill-fated China adventure. To reduce risk exposure this time around, the group formed a joint venture with I.T Limited to work together on the new Beijing location. With the support of Xidan commercial authorities, an experienced partner like I.T and a maturing Chinese luxury market, Galeries Lafayette could see a far different reception in 2013 than it did in 1997.

However, this doesn’t mean it will be a cakewalk. Though Beijing’s consumer market is far more developed than it was 15 years ago, it’s also far more crowded. With the high-end retail environment in the Chinese capital teeming with new players like Parkview Green and well over a dozen established shopping centers, Galeries Lafayette will have to aggressively work to differentiate itself in Beijing. At the same time, Lafayette will have to work at more strongly marketing itself to visiting Chinese tourists in Paris, in the hopes they’ll remain loyal to the brand when they get home.

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