France's Printemps chain courts rich tourists with Louvre store

High-class department store chain Le Printemps will open its first new outlet for 32 years just down the road from the Mona Lisa, hoping well-heeled tourists will help it counter slowing sales in the luxury sector.

The group's focus on luxury goods appealing to wealthy visitors from emerging markets like China and Russia has helped it largely escape the economic woes plaguing the retail sector. But growth is slowing in those markets, notably in China, which also faces an official crackdown on conspicuous consumption.

The new 2,500-square-meter (26,900-square-foot) store in the Louvre museum's shopping mall is part of Printemps' plans to spend 270 million euros ($369 million) over 5 years to lift group turnover to 2 billion euros by 2017 from 1.5 billion at end-March 2013.

Costing 25 million euros, it accounts for 10 percent of the total commercial space of the underground shopping center.

Chief Executive Paolo de Cesare told Reuters that Printemps' flagship Boulevard Haussmann store, which at 43,500 square metres is far larger than the new unit, would show "good sales growth" in fiscal year 2013/2014

But Christmas sales were merely "OK," he said, and it would not repeat the previous year's double-digit performance.

"The macro-economic environment in 2013 was much more difficult than in 2012. In this environment we are posting solid growth but it's not as spectacular as in 2012, though we are still way above the market trend," he said.

"2013 will be a year of growth for Printemps and of good growth for Haussmann... We are growing in Chinese customers but less than before," he added.

According to the tax-free shopping specialist firm Global Blue, spending by foreign tourists in France grew 7.7 percent in 2013, a sharp slowdown from 28 percent in 2012.

FIRST STORE OPENING IN 32 YEARS

In its fiscal year 2012/2013, which ended on March 31, Printemps posted a 5.7 percent rise in group sales to 1.513 billion euros, with Haussmann contributing 850 million, a year-on-year rise of 14 percent.

Deutsche Bank and the Borletti Group bought Printemps from PPR In 2006. Last year Qatari investors bought Borletti Group's 30 percent stake in Printemps as well as the 70 percent holding owned by Deutsche Bank's real estate investment unit RREEF for 1.75 billion euros last year.

This is the first opening in 32 years for Printemps, a chain that traces its roots back to 1865 and has 16 stores in France, employing 3,500 people.

"This is a big acceleration in our development. We are ready to open a few selected stores. We are very focused on finding great locations and great projects," de Cesare said.

With nearly 10 million visitors in 2012, the Louvre, home to Da Vinci's famous Mona Lisa portait, is the most visited museum in the world. Printemps hopes foreign tourists will generate 60 percent of the new store's sales.

Other openings in the pipeline include a Printemps store in Marseille in 2014 and one in St Jean-de-Cannes on the French Riviera in 2015. There are also plas for a Citadium sports store in Toulon and another in Marseille this year.

Longer-term, Printemps could open stores abroad provided it finds suitable locations, de Cesare said, citing Europe, Asia, and the Middle-East as possible areas for expansion.

Printemps has narrowed its offerings in the new Louvre store to accessories, mostly bags, watches and beauty brands, to "showcase the best know-how in European luxury and craftsmanship," de Cesare said.

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