Printemps Courting Luxury Consumer

The luxury consumer represents a key growth driver for the beauty industry, according to Paolo de Cesare, Printemps' chief executive officer and chairman.

A department store's key point of difference is its wide array of products. (Printemps, for instance, carries 3,000 brands and about 3 million stockkeeping units.) Such retailers should remain distinct by how they edit their product mix and they should also have appealing events, said de Cesare.

"Service is considered an advantage by only 11 percent of consumers," so stepping up assistance remains a clear opportunity, he said.

To please this demanding luxury goods consumer, de Cesare said Printemps has a five-pronged strategy. Of utmost importance is the quality of its retail space, a portfolio shift to higher-growth brands and categories, the trading up of its offer and developing merchandising and service.

"Our objective is to combine the retail space, the brand offer and service to create a highly appealing shopping experience," he said.

On the store front, Printemps is undergoing a $50 million, four-year renovation on the store's interior and exterior.

"In the new design, we want to combine the best of retail and the best of the hotel industry to create a new concept for luxury shopping and entertainment," he said.

In an attempt to focus its portfolio on categories that generate ever-higher sales, Printemps has been concentrating on men's and women's fashion and accessories while closing several businesses, such as toys and electronics.

"Fashion and accessories allow more differentiation and exclusivity and command higher price points. And combined, this category represents 67 percent of the business, up four points just in two years," he said.

"In terms of customer relations, we are developing a new program to better target the top 10 percent of our customers," he added. "The top 10 percent of our three million customers in our database represents over 40 percent of the business. This customer comes every month in the store and spends more than $2,000 on average. We clearly need to do a better job in serving them."

Printemps also raised the average price point per product it carries. In the fashion and accessories categories, for instance, the average ticket rose to 85 euros from 65 euros in two years, or $133 from $102 at current exchange.
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