PARIS — Retail runs in Nicolas Houzé’s blood.

A fifth-generation member of the French family behind Galeries Lafayette, Houzé joined the business in 2006, led the department store as chief executive officer for more than a decade, then followed his father’s footsteps into the role of chair of the group’s executive board last year.

In addition to steering the Galeries Lafayette Group, he chairs France’s strategic committee for fashion and luxury and presides over the union of city-center retailers. On Dec. 1, he was also named president of the International Association of Department Stores, taking the helm as global retail continues to seek recovery.

Last month, Houzé marked a milestone for the group by opening Galeries Lafayette’s first store in India, which is the country’s first stand-alone high-street department store. He has been central to leading the company’s post-pandemic recovery while expanding its international footprint and navigating the shifting trends in fashion, e-commerce and rapidly-changing consumer habits.

In a wide-ranging interview in his office with sweeping views of the Sacré-Cœur, Houzé said the group is doubling down on its department-store model even as much of the industry pulls back, and gaining traction from a growing demand for watches, jewelry and beauty, following the overall rebound at its Paris flagship.

Early acquisitions of multibrand retailers Louis Pion and Royal Quartz, and later the Mauboussin jewelry brand, helped secure the group’s position in the watch and jewelry segment and reinforced relationships with brands such as Rolex — all of which were aimed at strengthening Galeries Lafayette’s core business.

While many were sounding the death knell for brick-and-mortar retail during the pandemic, the group took a counterintuitive bet with a 400 million euro investment to renovate its flagship on Boulevard Haussmann in Paris over four years. The move paid off, with sales returning to 2019 levels by 2024.

A further 400 million euros is now earmarked for upgrades in Paris — including a full overhaul of the stand-alone men’s building to be completed by the end of 2027 — and across its regional network, positioning the family-owned retailer for a new phase of growth.

Galeries Lafayette is still pursuing measured international expansion and strengthening its brand globally. It is reexamining its China strategy, and has an eye on opportunities in the Middle East, including Riyadh.

Houzé spoke to WWD about growth opportunities, why he’s staying out of the U.S., the controversy over Shein’s presence in France, and the future of department stores as entertainment. The transcript has been edited for length and clarity.

WWD: You just opened the first stand-alone department store in India, with the location in Mumbai. What led you to expand in this market, and how is it performing so far?

Nicolas Houzé: We thought that it could be interesting to enter India back in 2017, but we were convinced that we wouldn’t be able to do it by ourselves. We were looking for a partner and are really happy to partner with the Birla group, which is also a family business.

We’re really proud of what we’ve done. We know that it’s a complicated market, with only a few shopping malls, no department stores. It’s the first time that a department store has opened a stand-alone, high-street location. What we can offer with the experience, the store, the architecture, the brands and the building is amazing.

[In the first two weeks of opening] we are welcoming between 500 and 1,000 customers buying [daily]. We are on track, and the turnover that we have been doing for the past two weeks is what we expected. It’s a great, great start.

We are looking at opening a store in Delhi. When we signed the partnership, we said it would be the year after Mumbai, but looking at [possible locations] it will be more like 2028. But India is the place for us.

WWD: With the loss of Chinese tourists during and after the pandemic, which previously made up a bulk of shoppers, what is the current balance of Galeries Lafayette’s clientele?

N.H.: Over the past four years, we have quadrupled the turnover that we are doing with U.S. customers, doubled the turnover for European customers, and grown by double digits with French customers.

This year, we will welcome between 32 million and 35 million people entering the store, with more than 8 million transactions. Those are huge numbers, and they are still growing. By 2024, we reached nearly the same turnover that we were doing in 2019. So, we are really on track for growth [this year].

We managed to de-stress the business. We have always wanted to be a global department store welcoming the world, and it’s more the case today that it was before COVID-19.

WWD: You have the stores in China, including Beijing, Shanghai, Shenzhen and Macao. How do you feel about the Chinese market currently?

N.H.: That it’s a tough one, to be honest. And looking at what we have, we have different sizes of department store. The stores that are working quite well are the smaller ones, like Shenzhen and Macao, better than Shanghai and Beijing. Shenzhen is still growing very fast.

The big department stores that we built back in 2013 are no longer a good answer or the right answer for the Chinese customer. So, we are currently working with our joint venture partner Hopson Group to see what we can do with the two locations that are the most difficult.

WWD: Outside of China, where do you see international growth?

N.H.: We are in the Middle East — Dubai and Qatar — and we are looking at a new project in Saudi [Arabia], in Riyadh, so we think that the Middle East is a good location also to develop Galeries Lafayette.

WWD: Would you consider opening in the United States?

N.H.: To be honest, India is for us the real — I won’t say bet, because we are partnering with [Birla] — but outside of that we are not looking at other projects, even though every week we are asked [to open] new locations — projects in Greece, in Azerbaijan. But we are really cautious. Our goal is not to open stores and to close them in a few years. We know that the Galeries Lafayette brand is really powerful, and we are going to be very cautious about future developments.

WWD: In recent years, the group has trimmed other business lines, such as the Eataly franchise, to concentrate retail on the Galeries Lafayette brand. What led to this decision?

N.H.: Galeries Lafayette is one of the leaders of the industry. Look, we were quite hurt by COVID-19, because we were the biggest [department store] and we were closed the longest. When we came out of COVID, together with the team and also within the family, we thought that we should focus on our strengths and focus on our core business, which is Galeries Lafayette. What was not exactly at the core of it, we needed to find a solution to that.

Looking at the department stores, we had two brands, Galeries Lafayette and BHV. For the past 30 years we’ve been running those two brands, and it has always been difficult because the positioning of the two is different, and because it is so intensive in terms of [capital expenditures]. We decided that it was time for us to find a solution for BHV, and we sold it. It was a way for us to refocus our energy.

WWD: Why did you select Frédéric Merlin and SGM Group as the company to sell it to? Do you regret that decision now that they have partnered with Shein to open inside of BHV?

N.H.: No, I don’t regret it because at the time when I took this decision, I thought that was the best [company] to operate BHV. But after that — it’s a complicated business to operate a department store. He has a vision that is different from ours and, I don’t know what will happen in the future, but perhaps it will change and no longer be a department store, but a location with some shopping destinations, some restaurants, perhaps a hotel. It will be something different from the department store, that’s my point of view, but I’m not sure of that. And at the end, I think that he did something that we could have done, but we didn’t want to do that because it was not in our essence.

WWD: You still own the BHV Marais building, and SGM has until the end of December to purchase it. What is the plan if he cannot come up with the financing?

N.H.: We will review our options — to sell it to someone else or to keep it. You know, the department store business is really linked to real estate. We think, and he also thinks, that he needs to acquire the building.

WWD: Outside of Paris, you decided to remove the Galeries Lafayette name from soon-to-be BHV department stores that will be home to Shein.

N.H.: Yes. He decided that he wanted to open Shein stores, and we think that is not the same positioning; Shein customers are not the same as Galeries Lafayette customers. Since he told me that he wanted to operate Shein within BHV and a few Galeries Lafayette stores, I said, “You can do what you want with BHV, but you won’t be able to do what you want with Galeries Lafayette because you don’t own the brand.” From our point of view, there is [no way] to have Shein within Galeries Lafayette. And after weeks of discussion, we both decided that it was time for us to separate the businesses.

We have tried during our history to open fast fashion within Galeries Lafayette, and we’ve closed them each time. We’ve opened Zara, we’ve opened Topshop. We’ve opened also, perhaps not fast fashion, but looking at the positioning, very low fashion like Jennyfer.

Of course we managed to attract customers, but there was no cross-sell with the other brands. When we build the assortment of Galeries Lafayette, we try to create coherence and to make sure that every brand will respond to our customer base. Fast-fashion brands were not the right answer for our customer — and it was not even ultra-fast fashion [like Shein].

WWD: Is the luxury slump impacting your turnover or your planning for brands?

N.H.: We have still grown by 5 percent over 2024 and it’s across all categories. Of course, we can see that some brands are [in a] much more difficult situation than others, and some categories that are more difficult than others. But all in all, the luxury [brands] that we’ve opened [in the revamped space] on the ground floor are doing quite well, and we are really happy with the business at the moment.

WWD: What are the categories that are more difficult at the moment, or a little bit softer?

N.H.: Ready-to-wear is a bit softer and leather goods on the ground floor. The ones that are really booming are shoes, watches and jewelry.

WWD: You have spoken a lot about the development of Haussmann, but what is the plan or positioning of the Champs-Élysées store?

N.H.: We are quite confident [with the location] and the Champs-Élysées will soon welcome huge new stores for luxury brands [such as Louis Vuitton]. It’s going to be nice, but we won’t be a luxury destination. We will stay like we are, with some luxury, but also fashion and premium brands.

The local portion of customers is smaller than what we have in Haussmann. In Haussmann, more than one-third of the customers are local. In the Champs-Élysées store, it’s around 20 percent, and 80 percent are international customers. There is a lot of foot traffic, with between 200,000 and 300,000 people walking on the Champs-Élysées every day — and we are welcoming a lot of them. One of the challenges that we have to face is that lots of people enter the store, but we have to work on the transformation rate, which is quite low compared to Haussmann and the other stores in the network. We are welcoming lots of customers that are curious visitors and not buyers.

WWD: What kinds of programs or initiatives are you implementing to improve that transformation rate?

N.H.: We work with the workforce and with the brands to make sure that we have the right product, and the right people that are well trained.

It’s quite difficult to keep people. We had a high turnover rate. When we opened the store in 2019 we had a specific way of doing the business with only Galeries Lafayette staff, and they were very well trained. But a lot of them were hired away by brands. Since then we’ve had to renew almost all the staff of the store, and it’s always a challenge to make sure that they have the right training, the right way of handling the customer relationship, and to make sure that the transformation rate is in their mind. It’s improving every year. We are growing in the Champs-Élysées store faster than the rest of the stores that we have in France.

WWD: The group has maintained the La Redoute brand though it has seen losses. Where does that fall within the group and do you see it competing with galerieslafayette.com?

N.H.: It’s complementary. It’s much more in the home decoration business, rather than the fashion one. The market is difficult and but we’ve hired a new CEO [Béatrice Héricourt] that joined the company six months ago. She’s reviewing the business, and she will propose a new three-year strategy by the end of the year. With a strong brand like La Redoute, we are really confident in the future. It is really a pillar of the group now.

We are investing a lot to make sure that galerieslafayette.com plays a role to complement the store, and since we’ve implemented the new SAP platform with new tools, the business is growing really fast. We are really confident that galerieslafayette.com will play a role in the future.

WWD: Galeries Lafayette has been a target of anti-fur activists. Are you planning to change or reexamine your fur policy?

N.H.: To be honest, we don’t push the fur, and we make sure that the brands that we are welcoming have the fewest products with fur. The fur that is sold in Galeries Lafayette is only with luxury brands. Few of them are doing that, and it’s only under European and French regulations. For the moment, we have no plan to change that. We are not pushing or increasing the sales or the place of fur in our assortment. We have only few brands that are proposing fur products.

WWD: Only the LVMH brands, correct?

N.H.: It’s mainly Fendi.

WWD: You have said you want to double sales for Galeries Lafayette’s in-house brands. What other categories do you see accelerating?

N.H.: The watch and jewelry Retail is quite a good business, and the beauty business is doing very good. Overall, perfume, makeup and skin care are growing quite well. Well-being was not part of the business three years ago. We’ve decided to implement new brands and new categories around well-being at the Haussmann store and throughout the network.

We’ve increased the size of the beauty [offering] because we think that it’s a good category for us. [In fragrance], we welcome brands like Creed, and the high perfume from Dior and Chanel, that are not carried in Sephora. It’s a way for us to differentiate from the specialist stores.

With Korean beauty, we have done some tests, but it has not been a success for us. We tried a long time ago, but perhaps we were too early. It’s a question that we have at the moment, because it seems to be popular with the next generation of young people. We will continue to explore.

WWD: Do you believe younger customers are looking for a shift toward events, and that they perhaps want more tactile, physical experiences?

N.H.: We are strong believers that physical retail will continue to be a successful business, if it’s not boring. We think that boring retail is dead.

WWD: Do you have metrics on how fast online sales are growing on galerieslafayette.com?

N.H.: Since the beginning of the year, we’ve been growing double digits. Over the next three years, our plan is to double the business.

WWD: In general, can you speak about the overall structural shifts that are happening in retail right now? What do you think of the total change in the market?

N.H.: When it’s about convenience, you can buy everything online. But when you want to fit the product, when you want to test the product, when you want to spend hundreds of euros or thousands of euros, you will come to a store.

We have to be in the entertainment industry — not playing a role like Netflix — but we have to entertain to make sure that people, each time they want to buy something, they want to come to a department store. We have to make sure that they will find excitement, find the right products. At the end, boring retail is dead. The department store is more alive than ever.