Galeries Lafayette store group could face 1 billion dollar loss

Galeries Lafayette, arguably France’s most famous high-end department store, could face a 1 billion dollar loss as it struggles in the wake of the coronavirus lockdown.

“It is very hard. We reopened the Champs Elysees store on May 11 but we have to face the fact that a lot of customers are missing,” Galeries Lafayette Chief Executive Nicolas Houze said on BFM Business radio. Footfall is down 20 percent compared to “normal” times.

In the early days of the pandemic France was quick to close its borders. Tourists avoided the capital, which suffered one of the worst outbreaks in Europe.

“International clients may be missing till year-end or beyond and that will weigh heavily because the Haussmann shop gets more than half of its revenue from foreigners,” Houze said.

Galeries Lafayette opened its Champs Elysees store in March 2019. The store was to be its most digitally advanced and referred to itself as a “retail laboratory.” Selling a mix of luxury and emerging labels, the four-story shopping mecca aimed to lure high-spending tourists and daytrippers.

Covid-19 is the second crisis the store had to face since its brief opening, and was a target during the yellow vest protest movements, which saw considerable damage to its windows and façade.

According to Reuters Galeries Lafayette operates 61 stores in France and abroad and is in talks with banks and the finance ministry to secure a 300 million euro state-guaranteed loan.

Photo Galeries Lafayette