PARIS — Move over, 24 Sèvres: Printemps is the latest retailer to dive into the increasingly crowded field of luxury e-commerce with the planned launch of a web site dedicated to top-end brands by 2020, chief executive officer Paolo De Cesare said Tuesday.
“We want to create an offer for luxury and designer, which will be under the banner of Printemps.com,” De Cesare told a press conference held at Perruche, the new rooftop restaurant at the Printemps flagship on Boulevard Haussmann here.
The Qatari-owned department store chain is targeting a launch date of late 2019 or early 2020 for the site, which will complement its existing e-commerce platforms: Place des Tendances, which sells contemporary and high-street brands, and Citadium, its young and sporty retail banner.
“What we see in e-commerce is similar to retail: We are moving from generalist web sites like Amazon, that sells absolutely everything and tries to go higher in the market, to specialized web sites that are very focused on specific target groups — and that’s what we believe we will do,” he explained.
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Printemps, which is on track to post record revenues in 2018 despite a backdrop of declining clothing sales, plans to invest more than 6 million euros to upgrade its existing e-commerce facilities in Pantin near Paris, with a view to capturing a global audience, De Cesare said.
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While Place des Tendances competes against the likes of Asos and Zalando, “on the luxury, we will be more positioned against Net-a-porter and Matches,” he added.
Analysts at HSBC forecast the online proportion of luxury sales will grow from 7 percent in 2015 to around 12 percent in 2020, accounting for as much as 40 percent of the industry’s growth overall. Printemps first entered into e-commerce with the acquisition of Place des Tendances from media firm TF1 Group in 2013.
At the time, De Cesare said the retailer hoped to generate at least 10 percent of its sales from the channel within three to four years. He now projects online sales will eventually account for 15 percent to 20 percent of turnover, versus 6 percent to 7 percent at present.
“Do we have international ambitions? Absolutely, yes. We have already about half of our sales that happen with international customers, and we want to give them an opportunity to buy our products even if they’re not coming to Paris,” the executive said.
Though he declined to comment on the performance of 24 Sèvres, the global site of rival department store Le Bon Marché launched by luxury conglomerate LVMH Moët Hennessy Louis Vuitton last year, De Cesare noted that Printemps intends to fully take advantage of its brand name in marketing luxury goods online.
“Printemps.com will be the best and only multichannel retailer that will leverage a very, very strong collaboration and partnership between the flagship and the e-commerce, and somehow I think that this is something that other sites have a bit lost, including even in the name, which doesn’t give a lot of proximity between the retail and the e-commerce,” he said.
“I really think that this symbiosis between the retail and the digital part will be very important, and what we see is that the pure players are investing a lot to create a flagship,” De Cesare said, noting that Farfetch.com bought landmark fashion store Browns, and Matchesfashion.com recently opened a second town house in London.
“The pure players are trying to do retail to give credibility to their expertise, and we have that. We have one of the most beautiful stores, so if we are able to translate some of the values of the store on the digital aspect, we will be doing quite well,” he said, adding that U.S. department stores are ahead of their European counterparts in this respect.
Eric Goguey, ceo of 24 Sèvres, has declined to share any figures on the first year of operations, beyond revealing that international sales account for a sizable proportion of revenues. The site, named after Le Bon Marché’s historic location at 24 Rue de Sèvres, delivers to at least 40 to 50 countries worldwide each week.
Jean-Jacques Guiony, chief financial officer at LVMH, said recently the group did not expect e-commerce overall to generate significant revenues.
“We mostly view the digital strategy as a complement to the brick-and-mortar strategy. Basically, what people want is to get information online and do the shopping off-line,” he said during a conference call in July to discuss LVMH’s first-half results.
“I’m not saying that digital will not end up taking a share of the global business, but we don’t expect this share to be a major one,” Guiony added.
For department stores, developing a strong online business is crucial at a time of faltering high-street shopping.
At the press conference, De Cesare flashed slides showing French fashion sales have declined 2.2 percent in the first half of 2018, noting the market was on track for its biggest annual decline since 2011, following a rise of 0.5 percent in 2017 as a whole, underscored by a steady shift from physical retail to e-commerce.
But even as U.K. retailers such as House of Fraser struggle, Printemps expects sales to grow 6 percent to 8 percent in its 2018-19 fiscal year ending next March. The Haussmann flagship is expected to be the main driver of growth, with sales set to rise 8 percent to 10 percent, while the other 18 stores in the chain are forecast to log an increase of just 1 percent.
De Cesare said the Haussmann store has seen a boost in traffic since the end of its multiyear, 100-million-euro renovation, which saw a total revamp of its men’s, beauty, homewares and children’s offer, and the addition of food. The Paris flagship should draw 25 million visitors in 2018, and its sales are expected to top 1 billion euros for the first time.