The LVMH game plan for La Samaritaine

To receive the Vogue Business newsletter, sign up here. LVMH wants emblematic Paris department store La Samaritaine, which reopens on 23 June, to be perceived as a game-changer for luxury retail in the city and a beacon of hope for the post-pandemic era. The luxury conglomerate bought 55 per cent of the Art Nouveau and Art Deco landmark in 2001 and the remaining share in 2010. But it was forced to close the building in 2005 for safety reasons, investing an extraordinary €750 million in its renovation and (to quote LVMH) “much-anticipated renaissance”. The store was formally inaugurated by French President Emmanuel Macron and LVMH chairman and chief executive Bernard Arnault on Monday. LVMH-owned travel retailer DFS has been entrusted with operating the 20,000-square-metre retail space, placing a huge emphasis on experiential retail. “It was important to make a store that would be differentiating, given the competitive environment in Paris, so we conceived it as a place for living and strolling,” says Eléonore de Boysson, president of DFS, Europe and the Middle East. La Samaritaine is the smallest Parisian department store but, de Boysson says, the largest concept store. It has similar floor space to Le Bon Marché, LVMH’s department store on the Left Bank (if you exclude that store’s La Grande Épicerie). La Samaritaine is staffed by around 1,700 people — roughly half of them employed by DFS, the rest employees of the concessions, services and logistics — and features 650 luxury brands in fashion, accessories, beauty, jewellery and watches, 12 restaurant concepts and an adjacent luxury hotel Cheval Blanc Paris, which opens on 7 September. A Parisian outpost of LVMH-owned Caffè Cova is opening across the street on 15 July. The site also includes social housing, offices and a daycare centre. “Marking the end of the pandemic with a place as mythic as La Samaritaine gives hope and a unique vision to the company,” Benjamin Vuchot, chairman and chief executive of DFS Group, told Vogue Business. In the short term, it’s a bold bet, not least because tourists have deserted the City of Lights. Department stores in Paris were allowed to reopen on 19 May after months of closure. In 2020, Galeries Lafayette Group sales slumped by 50 per cent: visitors from abroad usually make up 60 per cent of shoppers at its Haussmann flagship. DFS, which is headquartered in Hong Kong and operates 60 stores, half of them located in airports, has been hard hit by the lack of international travellers too. While LVMH does not break down sales for individual companies, DFS is part of its Selective Retailing division, which also includes Sephora, Le Bon Marché and Starboard cruise services. The division posted sales down 5 per cent in the first quarter of 2021, making it the worst-performing division, following a 30 per cent decline for the full year in 2020 to €10.1 billion. Vuchot acknowledges that business at La Samaritaine may be slow initially. “We know that we still have 18 challenging months ahead,” he says. “We expect a return to a decent level of travellers by mid-2022.” When tourists return, La Samaritaine is anticipating 5 million visitors a year. (By comparison, the DFS-owned department store in Venice, The T Fondaco dei Tedeschi, had 3 million visitors in its second year in 2017.) La Samaritaine chairman and chief executive Jean-Jacques Guiony anticipates turnover per square metre to at least match Le Bon Marché, he told journalists at a press conference on Monday. The public health situation in France has hugely improved, leading the government to lift a night-time curfew ahead of schedule. Face masks are no longer mandatory outside, and the government’s vaccination campaign has accelerated: 47 per cent of the French population has received their first shot. The EU has opened to non-essential visitors from the US, a move that may yet save the summer season. As Vogue Business previously reported, in 2019, 2.3 million Americans visited Paris, the biggest tourist group by nation, accounting for 18 per cent of foreign travellers, according to Paris’s Visitors Bureau. But many countries are still in an orange or red category, meaning that they are subject to travel restrictions — including China, the largest driver of luxury sales in Europe. Anita Balchandani, leader of McKinsey's EMEA Apparel, Fashion & Luxury Group, says domestic and regional travel in Europe (excluding the UK) should pick up this summer while travel from America will follow, most likely in the autumn. Asian long haul is unlikely to return in significant numbers before 2022, she says. “So for the rest of 2021, we expect the visitor mix in Europe to be quite different to the pre-pandemic mix.” For Samaritaine, targeting locals has always been at the heart of the plan, says de Boysson — even before international travel stagnated during the pandemic. “One could say it’s difficult to draw tourists and Parisians alike,” she says. “But it’s quite the opposite: they are complementary. It’s important for us that Parisians come back to this place that is so special to them, that they first come out of curiosity and return because they find the experience amazing. This is also what will make the tourists come [to] an iconic and authentic place where Parisians go.” The variety of restaurants is a key differentiator, as well as a selection of edgy brands in the multi-brand spaces on the rue de Rivoli side of the store, according to the executives. De Boysson also believes the new-look store reflects the innovative, ebullient spirit and tone of voice of its founders Ernest Cognacq and Marie-Louise Jay — as she puts it, a spirit that is “playful, joyful, generous and inclusive”. “La Samaritaine is also the place where we used to go to buy screws when I was a kid,” recalls Nicolas Bos, chief executive of Richemont-owned Van Cleef & Arpels, which is among the brands at La Samaritaine. “So I think a lot of Parisians will want to go back. The place is incredible. I think the Parisians want these magnificent buildings on the Seine back.” La Samaritaine is swimming against an industry trend, firstly by opening a department store at a time when physical retail is in limbo, and secondly by preferring a wholesale model over concessions. “Nowadays, luxury brands want to control the distribution, and therefore they are focused on their own physical and online retail and on selected physical and digital concessions,” says Mario Ortelli, managing director of Ortelli & Co. “This is a challenge for a wholesaler like La Samaritaine to attract brands and to be perceived by consumers as unique.” La Samaritaine can still win out, he notes, thanks to its status, location and prized position within the LVMH universe, enabling it to attract established brands and to be a “selection master”. “I think that unique landmark locations can work under the department store model,” Bernstein analyst Luca Solca says. “I am thinking of Harrods as an example.” At a time when omnichannel is the buzzword, La Samaritaine is also opening with a very limited e-commerce offer, featuring only products from Loulou, a gift boutique within the store. The website, says Vuchot, is intended primarily as a service platform to engage with customers, a place to make reservations at the restaurants or the spa on the beauty floor. La Samaritaine is also playing its role in re-energising its immediate neighbourhood in the 1st arrondissement. Kering chairman François Pinault’s art museum opened nearby in May. The repurposed La Poste du Louvre is expected to reopen next year with a luxury hotel, while Fondation Cartier is to move to Le Louvre des Antiquaires, also in the 1st arrondissement, in 2024. “It will be one of the hottest neighbourhoods in the coming years,” says de Boysson. The DFS connection will certainly help La Samaritaine, which will tap into its database of clients worldwide and its expertise with service to travellers, including “seamless detax” at all pay points and acceptance of WeChat Pay and Alipay. DFS has a Loyal T programme allowing shoppers to redeem points from any DFS store worldwide in real-time. A Chinese shopper, for example, who visits La Samaritaine can use points earned in Macau. Meanwhile, the fusion of fashion and food is central to the store experience. Twelve restaurant concepts include Street Caviar, combining street food and caviar, conceived by Maison Prunier, and Dînette, conceived by Dalloyau, which offers snacks in dollhouse format on the women’s fashion floor. There’s also L’Exclusive, offering pastries on the beauty floor. The restaurants are strategically located throughout the store. “It is what consumers want today — a promenade. I think food courts are outdated,” says de Boysson. LVMH’s champagne houses have showcases dedicated to offering extra services, such as personalising a Veuve Clicquot Arrow box or adding a shopper’s initials to Hennessy’s leather decanter. This is intended to encourage tourists to buy in-store rather than at airport duty-free. Voyage, featuring a Krug studio and cocktail bars, is located on the top floor and is open until 2am, long after the store closes at 8pm. Experiences will flow through the 2020s iteration of La Samaritaine. They might include a guided visit of the building with an art historian, a meeting with the artisan who restored the gilding under the Art Nouveau glass roof or signing up for champagne tasting in the cellars of the LVMH champagne houses. “We’ll be experience agents,” says De Boysson. Vuchot notes that experiences are a DFS speciality, right down to the store in Hawaii where visitors can book surf lessons. “In a world where shopping is undergoing tremendous change, we have to find different solutions. Hence the food & beverage, the spa, the hair salon,” says Vuchot. “We strive to move away from the purely transactional side.” The Cheval Blanc Paris hotel features 72 rooms and suites with prices starting at €1,150, a 1,000-square-metre suite on the top floors, a 30-metre pool, a spa in collaboration with Dior and four restaurants: Le Tour Paris, Langosteria and Plénitude plus a coffee shop. It also has a secret elevator that connects hotel guests directly with the department store. For the ultimate luxury experience, Cheval Blanc guests can book personal shoppers to transform their suites into fitting rooms — the sort of touch that should appeal to the wealthiest of visitors to Paris. Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author: Paris Fashion Week’s new plan to measure environmental impact Richemont shares jump on jewellery rebound, Kering “approach” The future of Tod’s

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