The Galeries Lafayette could take a 1 billion-euro hit as its store on the Champs-Élysées continues to see slower foot traffic amid the coronavirus pandemic.
The upmarket department store chain, which has more than 60 locations around the world, opened its outpost on the famed Paris avenue in March 2019. It was forced to temporarily shutter it a year later, in March, as the COVID-19 health crisis spread through Europe. In mid-May, the unit reopened albeit at reduced operating hours, but according to CEO Nicolas Houzé, traffic is down by roughly 20%.
“It is very hard,” he said in an interview with France’s BFM Business network. “We have to face the fact that a lot of customers are missing.”
He added, “It is difficult to earn a revenue there, but we are convinced that Galeries Lafayette has a place on Champs-Élysées.”
As a result of the outbreak, Houzé expects a negative impact of 1 billion euros, or $1.13 billion, on the company’s balance sheet. He shared that the family-owned business was engaged in discussions with banks and the country’s Ministry of the Economy and Finance for a loan worth about 300 million euros, or $338.83 million, as the Galeries Lafayette flagship on Boulevard Haussmann also expects to see less customer flow post-pandemic.
“International clients may be missing till year-end or beyond,” Houzé explained, “and that will weigh heavily because the Haussmann shop gets more than half of its revenue from foreigners.”
More than half of the boutiques and shops on the Avenue des Champs-Élysées had reopened for business in mid-May. COVID-19 has sickened more than 191,100 people in France and led to at least 29,100 deaths.