Fauchon intends to accelerate its development in the Middle East and make tea and chocolate its two main export products, having weathered the crisis and be able to break even.
With a turnover growth of 10% during the 2009-2010 fiscal year ended March 31, to 145 million euros, the luxury grocery relatively well through the crisis thanks to its business functions – which account for 18% of sales and grew 30% over the year – and thanks to Internet sales and business gifts which jumped 40%.
"I think the luxury food took its dimension of sharing and fun available," said Isabelle Capron, CEO of the company, in an interview with Reuters.
In times of crisis, "it differs less the purchase of a flash than a Ferrari," she smiled.
For the current year which started badly with the fall in April air traffic caused by the eruption of a volcano in Iceland, Isabelle Capron said it expects growth of 8%.
In terms of results, the company has managed to balance operational in 2009-2010 and is an operating profit of approximately 5% of sales within three years.
After a slow decline, the famous luxury shopping has been saved from bankruptcy in 2004 by Michel Ducros, company president – son of Gilbert Ducros, founder of the spices of the same name – which has acquired 90% the balance being taken by the management of the company and some private investors.
RENOVATION
Fauchon, shops and aging product line, then made a major restructuring led by its new CEO, an expert on marketing and advertising in schools formed the American Colgate.
"We renovated sites, product lines, image, teams, information systems (…) Everything has been reworked," she said.
Convinced of the power of a brand embodying the 120 years of French luxury food, Isabelle Capron initially wanted to give a new Fauchon strong visual identity made in black, white and fuchsia, while keeping the logo the effects of mirror from the 1930s.
"It should be quite radical and very visible," she says.
The renovation of the store's historic Place de la Madeleine in Paris, this revival has embodied the style codes closer to the fashion of the store.
Black lacquer, pink mirrors and tinted windows, the two shops of the place have also seen their product lines fresh completely redesigned.
To facilitate the transition in its stores, Fauchon opened a bakery and a bar area with caviar, pastries modernized with "collections" of flashes and bright colors for buttons or winks at the news (home sold lightning rainbow on the day of the "gay pride").The catering products are being reviewed while offering self-service will open in September.
If the activity is divided equally between the fresh produce and groceries, the latter, which requires less manpower, offers higher margins and can easily be exported.
TEA AND CHOCOLATE IN FIRST LINE
In the grocery store, what are tea and chocolate (which each accounted for 18% of group sales) that are the subject of attention and should be the engine of international growth.
"We invest in tea and chocolate, our two major providers of business growth and profitable recurring," said Isabelle Capron, inaugurated Monday a new line of chocolates numbered dubbed "Shock Made in F" produced in collaboration with chocolate Pascal Caffet, Best Worker of France in which Fauchon took 33% stake.
Fauchon carries today, 25% of its turnover in France and 50% in Japan, where it is established for decades through a partnership with department store chain Takashimaya but where growth prospects are limited.
To grow, the company looks to the Middle East, which accounts for 15% of its sales and where it intends to open over 20 stores in the next two years, in sales that could reach 30% of turnover within five years.
The appetite of this region in the world for sweet foods makes an ideal target for the confectionery and chocolate.
Besides France, Japan and the Middle East are the only regions in the world where Fauchon has a local manufacturing enabling it to offer fresh produce.Elsewhere, shops selling grocery products that can be exported.
BACK IN CHINA AND THE UNITED STATES
After a setback in China, where the company recently closed a large store opened in Beijing in 2007 – too large, misplaced – Fauchon has opted for a model shop "gifts" to smaller area. She has just opened one in Hong Kong and said to be in contact "advanced" with partners for openings in mainland China.
United States Fauchon also suffered a defeat and closed its shops in New York but wants to expand free "if you can find the right partner".
Russia, very hard hit by the crisis, also has the longer term, among the strategic development zones of Fauchon.