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Lafayette is back in town

On 18th October, the Galeries Lafayette opened its first store in China in the Xidan area of Beijing, a return after a 15 year absence. The new building which covers 47,000 sqm over 6 floors took 3 years to construct and complete.

Back in 1997, Lafayette already had a store near Wangfujing the most popular commercial zone for Beijingnese. But one year after opening, the Lafayette store silently closed, it was ahead of its time and out of Synch with local sentiment and understanding at that time. The western word ‘luxury’ was not understood by the Chinese and few could afford the products it sold at that time.

15 years on, and Chinese luxury consumers are the engine of the industry, and much has changed. This time around Lafayette is partnering 50/50 with the I.T. Group to re-establish a presence in the country. Unlike other department stores or shopping malls in Xidan, Lafayette has adopted the in-house buying model it uses in France and supplements this by renting some concessions space, which is the standard department store model in China. The adoption of the relatively rare operational model may undoubtedly bring cost pressures to the company, and time will tell whether the decision was correct. …

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