A century and a half after the first department store opened in Paris, the city’s famous grands magasins are reinventing themselves, morphing from practical retail outlets where you could find virtually anything into upscale fashion centers where chic shoppers can indulge their every whim. The radical new formula is costing hundreds of millions—and so far, at least, it seems to be working.

The City of Light blazes brightest during the holiday season when les grands magasins—Paris’s grand department stores—add their festive dazzle to the shimmering skyline. This year the most spectacular sight is the 150,000 lights illuminating the façade of Galeries Lafayette, creating a magical multicolored dream of Gothic cathedrals and Arab palaces.
    To that, add the ingenious holiday window displays that light up the eyes of French tots—not to mention their parents and grandparents. At Printemps, cats dressed by Kenzo gambol through Kabuki theaters, calligraphy ateliers, bonsai gardens and a giant teapot. At Bon Marché, a family of hippos leads a troop of stuffed animals through the animated antics of creating Christmas tree decorations. And at Galeries Lafayette, Snow White, Cinderella and Sleeping Beauty live out their fairy-tale lives, complete with happy-ending princes.
    Traditional holiday windows and Belle Epoque architecture may give the impression that nothing much has changed in the worlds of these venerable “cathedrals of commerce,” as Emile Zola described them in his 19th-century novel Au Bonheur des Dames. But take a step inside. If these stores can look forward to a joyeux Noël (when some of them ring up two-thirds of their yearly sales), it is because they have undergone a veritable French revolution during the past few years. While American department stores are going through tough times, suffering competition from discount stores and retail chains, their French sisters—with many of the same competitors—are seeing sales rise an average of 4 to 5 percent a year.
    How do they do it? The answer: Less—and luxe—is more. French department stores have invested heavily in a colossal “relooking,” none more dramatic than Bon Marché’s top-to-bottom makeover, which industry observers unanimously call a remarkable repositioning. Under president Philippe de Beauvoir, Bon Marché has become the most luxurious French grand magasin, increasing sales by 50 percent during the past seven years to €310 million in 2001, with €325 million forecast for 2002. This striking growth, as he proudly stresses, “was not accomplished by a policy of markdowns, but by developing a collection of high-quality merchandise.”
    Bon Marché’s current success can be attributed at least in part to its impressive past. Proudly holding the title of Paris’s oldest department store, it celebrated its 150th anniversary this year. Bon Marché was founded by Aristide Boucicaut, who fomented a business revolution with clearly marked fixed prices and the right to browse and touch merchandise or return goods not up to expectations. He also introduced home delivery, mail order, the “white sale,” a reading room and free buffet refreshments. Nor was culture neglected. Boucicaut entertained customers at store concerts, set up an art gallery and hosted balls—one glittering event was attended by 6,000 guests. The personnel were treated well, too. The owner and later his wife, Marguerite, initiated progressive labor practices including a commission system, benefits, free medical care and annual holidays as well as evening classes in languages, music and fencing.
    As the only Paris department store on the Left Bank, Bon Marché has always stood apart as the preferred shopping precinct of a cultivated, well-heeled Faubourg Saint-Germain clientele. But the grande dame had grown dowdy and unprofitable by the time Bernard Arnault bought Financière Agache—which owns Bon Marché—in 1984. When de Beauvoir arrived in 1988, a market survey revealed that customers were overwhelmingly attached to the store just the way it was. “Don’t change a thing” was the message. He tossed it into the trash. Instead, he adopted a strategy aimed at profoundly altering the nature of the store by redefining the type of products it sold. “Before, we catered to customers’ daily needs,” he recalls. “Today, we have a contemporary store that is all about customers’ exceptional desires.” And Bon Marché is stocked with exceptional products to fulfill those desires—products that exude imagination and emotion rather than being simply utilitarian. “When a woman buys a great fragrance, she is not just buying the scent,” he explains. “She is buying the romantic, sensual image the perfume evokes.”
    Since 1988, de Beauvoir has spent €80 million on a massive renovation, all the while offering an increasingly upscale range of merchandise. Out went the home-improvement department, large household appliances and outdated labels. In came a new emphasis on fashion, including an expansive men’s department strategically placed on the ground floor to lure this famously shopping-shy clientele. Bon Marché’s new focus was on glamorous brands (Louis Vuitton, Dior, Prada) mixed with a touch of avant-garde (Comme des Garçons, Dries van Noten) and sophisticated chic (MaxMara, Ralph Lauren, Gérard Darel). Even the children’s department, a favorite of such stylish clients as Princess Marie-Chantal of Greece, offers an exclusive, innovative selection by Belgian, Japanese and Italian designers along with Burberry and Bébé Dior.
    In 1998, Bon Marché became part of the LVMH luxury conglomerate, developing a certain synergy between the store and other LVMH brands. But de Beauvoir insists that these relation- ships are not automatic. “If we carry Louis Vuitton, it’s because it’s advantageous for both of us. We don’t carry every LVMH brand, nor do all of them want to be here.” More recently, a new accessories section was added to the ground floor, and a €6.5 million “Théâtre de Beauté” (fragrances, make-up and skincare) has blossomed under a glass canopy. Coming in 2003: A revamp of women’s fashions, which will expand into the building across the street where another singular success, Bon Marché’s gourmet supermarket, La Grande Epicerie, draws foodies from all over town.
    In an echo of Boucicaut’s artistic patronage, contemporary art—some pieces specially commissioned—adorn each newly renovated space in the store. On the lower level, meanwhile, an area reserved for cultural exhibitions has hosted shows on such themes as Vietnamese art, fashion choreography and Hong Kong cinema.
    De Beauvoir unabashedly claims that his ambition is to make Bon Marché “the most selective of all Paris department stores.” But he is also realistic about the challenges that lie ahead. “We still have a long way to go, especially in customer service and customer relations—areas where there is still a big gap between the United States and France.” Every one of de Beauvoir’s rivals cites the same challenge—a hopeful sign for today’s disgruntled department store shoppers.
    De Beauvoir is also in charge of revamping La Samaritaine, an architectural monument founded in 1869 by Ernest Cognacq and acquired by LVMH in 2001. For now, he says, the project is still “a work in progress,” but it is already clear that less will be more here too—the antithesis of the store’s onetime proud boast, “On trouve tout à la Samaritaine” (“You can find everything at La Samaritaine”). “I hope you won’t be shocked,” he says impishly, “but I’m giving La Samaritaine a sex change. It was very virile and masculine with an aggressive markdown policy and an enormous home-improvement department. Now we’re transforming it into a fashion store.” Given its location near Châtelet, merchandise will be “democratic” with a trendy accent, he says, but the focus will still be on quality.

Bon Marché may be Paris’s oldest department store, but it’s not the most famous—at least not as far as tourists are concerned. That distinction goes to Printemps and Galeries Lafayette, celebrated rivals that stand almost shoulder to shoulder on the boulevard Haussmann near the Opéra. Printemps was founded first, in 1865 by Jules Jaluzot, who had worked with Boucicaut at Bon Marché. He imbued his new store with the same spirit of innovation to great success. After a gas lamp accident destroyed the store in 1881, Jaluzot rebuilt in the grand manner and introduced a thrilling high-tech innovation: electric lighting. Today, the store comprises three buildings, the Napoléon III-style Magasin Havre dating from 1882; the Nouveau Magasin, a dramatic Art Nouveau design capped with a multicolored glass dome that went up in 1923; and Brummel, built in 1930. Since 1991, Printemps has been part of the PPR (Pinault-Printemps-Redoute) group owned by François Pinault, one of the richest men in France and archrival of LVMH’s Bernard Arnault.
    “Following a long slump, Printemps finally became profitable in 1998,” explains president Laurence Danon, the only woman heading a Paris department store. “We basically did three things to turn business around: redesigned our stores to make them more open and airy, updated our merchandise by bringing in more than 200 new brands, and modernized our computer systems.” The result? Sales have increased 4 to 5 percent annually, reaching €401 million in 2001.
    By far the most stunning aspect of the €200 million revamp is the spacious new luxury floor, “the first time a department store has devoted an entire floor to 70 of the world’s greatest names in fashion, accessories and jewelry,” declares Danon. “In less than a year, it has generated 40 percent of Printemps’s total sales and 60 percent of sales to foreign clients.” Indeed, for tourists with more money than time, it offers one-stop luxury shopping: Van Cleef & Arpels, Chanel Joaillerie, Bulgari and now Tiffany & Co.—all in exclusivity—as well as designer boutiques such as Chanel, Yves Saint Laurent Rive Gauche and Givenchy. There’s also a Ladurée tea salon, a rare fragrance bar with collectors’ flacons and a customer service desk to help foreigners navigate such issues as VAT reimbursement and shipping. Already, the store’s percentage of foreign customers has jumped from 20 to 25 percent. And brisk sales of expensive jewelry demonstrate that haute luxury in a department store can make great brands—such as those typically associated with the intimidating place Vendôme—more accessible.
    Danon points out, though, that luxury is only part of the Printemps story. The store’s clientele is mixed, so it has to offer a broad range of products; the challenge is to make the right choices at all the various price points. “Right now we’re carrying a small embroidered denim handbag for €20 that is selling like hot cakes—it has that fashionable bohemian chic that fits in with our fall theme, Nomads,” she is delighted to report. “Products like these are great because they introduce young people to the store.”
    Danon, who joined Printemps in 2001, is also visibly excited about her most recent undertaking: the renovation of the entire Printemps Maison store. By the end of 2003, fragrances and make-up will occupy the ground floor, while skincare and a new spa will be set up on the first. Just finished are the upper floors devoted to home furnishings and decor, organized by lifestyle—Luxurious Home, Practical Home, Charming Home, Ethnic Home and Contemporary Home. The iconoclastic concept calls for mixing products by theme on each floor rather than, for example, displaying furniture on one, linens on another.
    Once Printemps’s overhaul is complete, the concept will be flexible enough that it can be tweaked every three years or so to keep things fresh. “Brands evolve, go from classic to contemporary, especially in fashion,” says Danon. “Before, department stores would undergo major renovations every 10 or 20 years. Now we need to be able to update our look more frequently without having to gut the whole store.”

At Galeries Lafayette, it is somewhat ironic that while less may now be considered more, bigger is still considered better. With more sales space than its competitors, it churned out €762 million in sales last year—more than any other department store in the Western world. And eight million foreign visitors a year (40 percent of the clientele) make it a tourist attraction that outdraws both the Louvre and the Eiffel Tower.
    This famous shopping mecca—whose name has a special resonance for American customers—was launched in 1893 by Alphonse Kahn and Théophile Bader, cousins who presciently saw the potential of the boulevard Haussmann location. As they predicted, customers from the provinces poured in from the nearby Gare Saint-Lazare, while Parisians enjoyed easy access to the store via the new wide boulevards built by Baron Haussmann himself. Originally housed in small premises, Galeries Lafayette didn’t really become a grand magasin until 1912, when it moved into its theatrical Belle Epoque store with a neo-Byzantine stained-glass cupola and spectacular atrium. Today it has a separate men’s store and remains the only family-owned department store in Paris.
    Although both Printemps and Galeries Lafayette estimate their daily headcount at about 80,000, the crush is more pronounced at the latter, where president Joël Mornet admits that with more people per square foot than Printemps and twice as many as Bon Marché, “it can sometimes be hard to move around on the ground floor.” In response to customer requests for greater comfort, the store has set the thermostat lower and installed a new ventilation system. But Galeries Lafayette’s version of less-is-more is so far demonstrated only on the recently revamped first and second floors, where aisles have been widened, merchandise reduced by 15 percent and, most inviting of all, “relaxation spaces” with sofas and water coolers have been set up. The result of a €100 million investment, this redesign marks the store’s first move away from a Macy’s ambiance to one closer to Saks and is a blueprint for renovations yet to come.
    And what about the trend toward luxury? “Today, if you want to stand up to the competition and attract customers, you have to sell luxury,” Mornet confirms. “But the risk in going upmarket and targeting foreign customers is that you can lose part of your French clientele.” His solution is expose a greater number of people to upscale items by presenting the least expensive products next to the most expensive brands. Mornet calls the approach, which operates from the accessories on the ground floor to the renovated fashion floors, “anti-avenue Montaigne.” He explains, “The idea is to make access to luxury very natural, simple and easy by taking away the complexes, fears and misconceptions that a shopper might feel going into a luxury boutique on avenue Montaigne.”
    So far, the concept seems to be working. Sales were up 5 percent for the first half of this year, and growth is forecast to be at least 10 percent by year-end, when the majority of sales are made. Profits are expected to be down, though, due to the acquisition of Marks & Spencer stores in France. The former M&S Paris flagship across the boulevard will soon be transformed into a Galeries Lafayette home furnishings store, a massive renovation project scheduled to open in November 2003.
    “A department store isn’t just a place to shop, but to have fun, to eat out, to have a good time,” recently proclaimed Galeries Lafayette group co-director Philippe Houzé in Le Figaro. Indeed, Galeries Lafayette amply fulfills its motto, “Something is always happening at Galeries Lafayette”: There are weekly fashion shows, annual supermodel competitions sponsored by the Ford model agency and a “designers’ lab,” spotlighting young fashion talents who often end up having their own sections in the store. Creative exhibits also keep things lively—a recent English jeans expo, for example, was paired with a special concession selling British bonbons. And while all Paris department stores have restaurants, Galeries Lafayette has the coolest selection, including a mineral water and Champagne bar called Bulles (Bubbles), a branch of the famed Angélina tea room, Café Sushi, Le Chènevert gourmet restaurant and even a McDonald’s on the children’s floor. Not to mention the recently enlarged Lafayette Gourmet, a connoisseur’s food emporium with a renowned wine selection.
    The Galeries Lafayette group also owns the Bazaar de l’Hôtel de Ville, or BHV, the only macho grand magasin left in town. The BHV basement is famed as a hardware palace, but to the uninitiated, it is more like an uncharted forest of screws and washers where, if you are lucky, a salesman will act as guide. The novelty here is the new Bricolo Café, a step back into the past with its 1940s wooden tool shed—a kick if you can find it. Upstairs, the crowded aisles and an unappetizing fashion mix are a “before” picture of the other, newly transformed Paris department stores. The only glimmers of change here are the new Box & Co. storage systems and a stand of elegant Farrow & Ball paints, featuring the recherché hues of Britain’s National Trust. But with a 6 percent decline in sales during the first half of 2002, a new strategy may well be in the offing here as well.
    After all, forsaking the mundane for the marvelous seems to have worked at every other department store. But can this successful formula endure? Jacques Perrilliat, president of the Union du Grand Commerce de Centre Ville, sounds a cautionary note. “These stores have bet big on luxury. That has worked so far, but since the beginning of the year, sales growth has been weaker, down from 5 percent to 3 or 4 percent.” The economic downturn and Americans’ post-9/11 travel jitters, he says, are largely to blame.
    With foreigners staying home, department stores are counting more than ever on the customer that has been a pillar of their success for more than a century: la Parisienne, with her innate sense of style and devotion to fashion. “A French woman may cut down on her spending,” says Perrilliat, “but she will always need that chic petit tailleur from a grand magasin.”_s