What: Falabella is facing a class action through the National Consumer Service (Sernac).

Why is it important: Covid-19 legal restrictions can endanger service to customers.

Falabella is the subject of a class action in Chile through the National Consumer Service (Sernac) for breaching the delivery times of its online sales during the last months. The Chilean company emphasizes that the delays are due to the various restrictions caused by Covid-19 state of emergency.

Between March and November, Falabella accounted for 27% of the total e-commerce claims received in Sernac. In addition, during 2020 about 68% of the claims against Falabella corresponded to delays in the dispatches or products that never reached their destination.

Sernac also found that, as a loyalty strategy, the company offered certain 'benefits' to affected customers, but without stating a clear policy.

Note: Sernac belongs to the same state-administration that has imposed the restrictions.

Falabella señala al estado de emergencia como causa del retraso de sus entregas en Chile

Falabella admite "demoras" en e-commerce y culpa a autoridades por restricciones en pandemia

What: having run a successful test, Vestiaire Collective opens a concierge corner

Why is it important: second hand is an opportunity for department stores to become more sustainable and create additional traffic

After a successful test, Vestiaire Collective settled permanently in Galeries Lafayette Champs-Elysées. The high-end second-hand fashion platform offers a concierge service, where customers can drop off clothes and accessories (from premium, designer or luxury labels) that they wish to sell on the platform.

Items validated are put online on the platform and are not available for purchase in the store.

This partnership with Vestiaire Collective is a way for the department store to develop its virtuous fashion segment. Galeries Lafayette, like the second-hand platform, is one of the companies in the sector that have recently made CSR commitments following the citizen consultation initiated by Paris Good Fashion.

Born in Paris in 2009, Vestiaire Collective continues its development, after having leveraged EUR 59 million last year thanks to 3 new investors (Korelya Capital, Vaultier7 and Leather Invest).

Galeries Lafayette permanent partnership with Vestiaire Collective

What: Chilean company was already withdrawing from the country since September 2020.

Why is it important: Shutdowns will be made progressively.

The pandemic has accelerated the process of digitizing retail and has affected the results. To adapt to this new trend and make the operation sustainable over time, Falabella announced back in September 2020 that they would close four of their stores in Buenos Aires.

At that time, Falabella put the four stores up for sale and was looking for partners to take over the other franchises. Employees were also offered the opportunity to retire voluntarily.

Flagship store at Mendoza Plaza Shopping might already have received a proposal to replace Falabella.

Falabella cierra todos sus locales en Argentina

What: CEO Nicolas Houzé interviewed in French Le Journal du Dimanche

Why it is important: in 2020, GL was closed for 106 days and has lost half of its turnover (EUR 1,7 billion)

30% of GL stores, accounting for 70% of the business, are currently closed. And although the crisis has accelerated the shift to digital, "online sales, which account for 5% of our overall revenues, do not compensate for closures," the CEO explains.

According to Nicolas Houzé, "it has never been shown that our stores are dangerous places": "Since 30 May 2020, GL Haussmann has reported 200 cases of Covid-19 out of 4000 employees. Only 10% of the cases happened in the workplace.

Mr Houzé is confident that foreign customers, "who represent 60% of our turnover in Haussmann's flagship will return". Therefore, "this means not making staff reductions or drastic redesigning choices for our stores," he says.

Among the brands owned by the family group, La Redoute (historic e-tailer) has benefited from the situation and has seen its turnover increase by 20% to reach EUR 1 billion. Mauboussin jeweller sales only dropped by 4,5% thanks to thriving online sales. The online off-pricer BazarChic sales have increased by 15% thanks to price positioning. Royal Quartz, the premium watches retailer deep-rooted in airports, has seen its sales drop by 40%

Galeries lafayette in Journal du Dimanche

What: the opening of a drive-through saliva RT-PCR testing collection sites in SM Megamall and SM Mall of Asia, since 2 February 2021

Why is it important: give more Filipinos easier access to non-invasive, faster and cheaper, tests for Covid-19.

SM Supermalls (SCMC)  has partnered with the Philippine Red Cross (PRC) to launch drive-through Covid-19 saliva-based testing at SM Megamall in Mandaluyong City and SM Mall of Asia in Pasay City. These test stations are being settled in two of the most easily accessible malls in Metro Manila and the two testing centres will be open from 9 am to 5 pm. Appointments must be scheduled online at book.redcross.org.ph.

The drive-through setup is a safer option as it doesn't require motorists to leave their vehicles for personnel to collect saliva samples for RT-PCR testing. "This is all part of SM's Safe Malling drive where we want to keep all our customers safe, healthy and provide convenient ways to do so," SM Supermalls Steven Tan said.

PRC partners with SM Supermalls for drive-thru saliva collection sites

What: the fourth Dior location in Mexico is the second one in Palacio de Hierro

Why it is important: There is a reflection at the IADS level on how to be attractive enough for brands to convince them to extend partnerships with department stores. Dior strategy in Mexico is an example on how it can be achieved.

Dior, who started to collaborate with El Palacio de Hierro as early as 1950, is opening its 4th location in the Santa Fe store, after the Plaza Artz Women and Men stores, as well as the Palacio de Hierro Polanco location. Out of 4 stores in Mexico, 2 are operated within El Palacio de Hierro department stores (Plaza Artz is a mall chain), a proof of the dynamism and attractivity of the department store chain positioning.

Dior Opens More Stores in Mexico City

What: support to the Aladina and El Sueño de Vicky foundations in the fight against child cancer

Why is it important: as part of its Corporate Social Responsibility, on 15 February, World Day Against Childhood Cancer, El Corte Inglés launched several actions aimed at helping children affected by the disease. It is essential that big companies take actions and lead the way to support the community.

The Unit brand - present in all Hipercor shops and several El Corte Inglés stores -  donated 10% of sales of children's fashion and footwear to the Fundación El Sueño de Vicky (Vicky's Dream Foundation), to finance a research project on paediatric brain tumours at the Niño Jesús Hospital in Madrid.

The company will also make its digital shop and screens available to the Aladina Foundation to publicise the "El Botón de la Sonrisa" (Smile Button) campaign, from which customers and employees can send messages of support to the children suffering from cancer. The aim is to generate a movement of solidarity and raise awareness in society about the reality of children with cancer.

El Corte Inglés apoya a las fundaciones Aladina y El Sueño de Vicky en la lucha contra el cáncer infantil

What: the Chinese department store outpaced British department store Harrods' pre-pandemic performance

Why is it important: In 2019, SKP Beijing was named the world's second-most productive department store after Harrods. Now it racked up over USD 2.7 billion in sales in 2020

SKP stores' performances in China were boosted by the rebound in domestic demand in 2020, while Western retailers (such as Harrods) suffered the lack of tourists throughout the year. Last July Harrods said it was anticipating a 45% drop in annual sales.

Beijing's Top Luxury Department Store, SKP, Surpasses Harrods' Pre-Pandemic Sale

What: 13 new stores are now being equipped.

Why is it important: The company adapts to e-commerce growth.

"An average delivery takes just 20 seconds, improving efficiency by 800% explains Falabella Retail CEO, Jean Luis Mingo. "By the end of 2021, we expect 50% of our deliveries to be made through click&collect."

Click & Collect is one of the omnichannel solutions offered by Falabella that integrates the online channel and the physical store. In the last three years, withdrawal through this service has grown by 66%.

Falabella Retail proyecta sumar trece Click & Collect automatizados en 2021

Falabella Retail afianza su apuesta por sistema automatizado de retiros y proyecta 13 nuevas tiendas en el pais

Related item:

• Falabella investment plan for 2020-2023

What: a Cloud Awards for the Breuninger-funded start-up

Why it is important: innovation is key to remain relevant in retail and Breuninger proves that a historic retailer can also shine in the start-up world

Congratulations Breuninger! autoRetouch was named "most promising start-up of the year" at the Cloud Awards in USA. The start-up, founded one year ago, is a fully automated, AI based solution for image processing automation, revolutionising how classic product images are edited for use in e-commerce.

"The autoRetouch award vindicates our decision as a leading fashion and lifestyle company to invest in this innovative start-up as well as digital business models," said Holger Blecker, CEO at Breuninger. "We at Breuninger believed in the digital image editing technology developed by autoRetouch right from the outset and I am very happy for the entire team that this development is now gaining the industry recognition it deserves!"

Breuninger-funded start-up autoRetouch wins prestigious Cloud Award (eng)

Von Breuninger finanziertes Start-up autoRetouch gewinnt renommierten Cloud Award (german)

Learn more about autoRetouch (IADS members only):

• AI Image Processing: "autoRetouch"
• Breuninger invests in start-up

El Corte Inglés unveiled a refurbished Castellana flasgship store in Madrid in December 2020. The remodelling was led by architect Lazaro Rosa-Violán, whose previous works include retail developments, hotels, and restaurants among others.

El Corte Inglés's changes include a major refurbishment of the Gourmet Experience.

Click below to see the remodel:

El Corte Inglés - Castellana remodels 2020

What: Galeries Lafayette and other department stores are temporarily closing from 31 January

Why is it important: French department stores are facing the third temporary closure since March 2020

Rather than locking France down again, as it was done twice already since March 2020, the government has opted to put in place new measures, which include temporary closures of large nonessential stores, such as department stores and commercial centres.

Retailers that do not sell food and have a surface area greater than 2,000sqm are closed since 31 January 2021.

In Paris, that includes the Galeries Lafayette flagship as well as Printemps flagship on Boulevard Haussmann, Le Bon Marché, Westfield Forum des Halles and BHV-Marais, among others. In France overall, approximately 400 shopping centres and 25,000 businesses will be impacted.

French Retail Dealt New Blow

What: China's leading luxury mall operator will open a new flagship store in Hohhot

Why is it important: China's top department store continues its expansion

The move fits into the city's plans to build two large commercial complexes, unveiled on 22 February. The store will span of 500 000 square meters and is expected to create 10 000 new jobs.

SKP, which is owned by Beijing Hualian Group, currently operates locations in Beijing and Xi'an. The business has accelerated its expansion in the broader domestic, with new stores under development in Chengdu, Kunming and Hangzhou.

Beijing SKP and Xi'an SKP saw sales grow 15% and 36% respectively in 2020, with the former's sales reaching CNY 17.7 billion (USD 2.71 billion), making it China's top department store by revenue for 10 consecutive years, according to Beijing Business Daily.

According to official government data, the income of residents in Inner Mongolia is on the rise, with a 4.1% increase between 2019 and 2020. The region's energy industry suggests a high number of affluent customers and the arrival of SKP could not only promote it as an up-and-coming retail hub, but help drive luxury brand awareness into lower tier cities.

Chinese Luxury Mall Giant to Expand Into Inner Mongolia

What: GL's communication director urges brands to be more sustainable

Why is it important: Guillaume Houzé has brought several brands together with Paris Good Fashion city association

"Now 10% of our sales are made with products that respond to a responsible approach," says Guillaume Houzé, director of image and communication at Galeries Lafayette.

With Paris Good Fashion, an association initiated by the city of Paris, he has brought together several brands. Among them, Etam, led by Laurent Milchior: "Companies have this responsibility to take part in the ecological transition. They'll have to change sooner or later. These companies, including Petit Bateau, Yves Rocher and La Redoute, have just made 12 commitments to be fulfilled by the end of 2024.

Recycle hangers, install collection points for used shoes and textiles, use "made in France" label only when this is the case, use at least 50% organic or recycled cotton, reduce plastic... These themes were chosen from the results of the two-month citizen consultation held by make.org.

French brands commit to sustainable fashion

What: The department store will create an independent logistical subsidiary to offer its infrastructure to third parties, duplicating its revenue thanks to the online retail increasing success.

Why is it important: Logistics and distribution have become a key factor in the unstoppable rise of online retail. By creating its own unit dedicated to logistics, Spain's El Corte Inglés aims at competing with Amazon, taking advantage of its current logistics and transport infrastructure. This division already employs around 5,000 people and has 1.2 million sqm of floor space in 50 "central and regional" warehouses.

ECI will offer to third parties the possibility to become an end-to-end logistics operator, from product storage to delivery to the customer's home. With this new business unit El Corte Inglés seeks to replicate successful operations such as the creation of the travel agency or the insurance brokerage, which started as internal units to eventually open to third parties and become independent companies within the group. This plan has been in the works for a couple years with the support of the consultancy firm Kearney and Goldman Sachs and if everything goes according to plan, the logistical unit should become independent within a year.

El Corte Inglés has been looking for new sources of income for months, a process accelerated by the pandemic after having to deal with a heavy blow in the retail division in 2020 (usually the biggest turnover for El Corte Inglés with revenues of EUR 12,000 million in 2019). This new project will also serve some real estate assets since they will build five logistics platforms in Spain to provide the service to third parties, which will at the same time, double the workforce.

El Corte Inglés se lanza al negocio logístico para competir con Amazon

Related item:

• El Corte Inglés rethinks logistics, turns stores in distribution centres

What: the retailer conducted several projects to help the ones in need.

Why is it important: the pandemic took us by surprise last year and became a priority in today's society. Nevertheless, there are still natural disasters, children without the possibility to receive quality education, and many more problems that were eclipsed by the pandemic. Through its SM Foundation, SM Group made various actions to support the people in need.

Actions include:

• Donation of  food, shoes, clothes and face masks to the victims affected by the typhoons in Barangay Kasiglahan, Rodriguez, Isabela, Rizal, Rolly, Ulysses and other hard-hit areas in Philippines

The country is prone to tropical cyclones due to its geographical location, therefore SM Foundation distributed a total of 60,470 "Kalinga packs" to families displaced by the recent typhoons that hit the country, through its Operation Tulong Express (OPTE) program. This program serves as a place for employees to volunteer by providing time and effort in packing and distributing the aid kits.

Operation Tulong Express

• The construction of a school in Sorsogon City

SM Prime Holdings (SMPH), through SM Foundation (SMFI), turned over a fully furnished two-story, four-classroom school building, part of Basud Elementary School in Sorsogon City. It also has rooms for a clinic, a mini library, and a guidance office. This social initiative promotes quality public education by building classrooms nationwide and is part of its School Building Program (an active partner of DepEd's Adopt-a-School program). To date, it has turned over more than 100 school buildings to grassroots communities nationwide.

SGV & Co., through SMFI, provided the teachers with laptops which they can use to hold virtual classes. Through SM Retail, Stationery at The SM Store donated backpacks and various school supplies to all the students.

102-year-old school in Sorsogon gets new SM school building

• The observation of the 25th Philippine National Autism Consciousness Week

Through its Corporate Social Responsibility programme, SM Cares supports the Autism Society in the Philippines. This is one initiative among others to support persons with special needs and disabilities. They highlight the uniqueness of these persons and promote safer environments where they can feel valued. "These initiatives support the United Nations' Sustainable Development Goals (SDGs), particularly the SDG 10 programme dubbed "Reduced Inequalities," which aims at ensuring the equal and fair treatment of every individual, including those with disabilities".

SM Cares supports Autism Society Philippines

Check out SM Foundation website to learn more about their social initiatives.

What: CBRE Thailand recognizes that, although they were a driving force for the Thai consumer market in the last decade, traditional department stores are losing ground.

Why it is important: the identified key success factor for tomorrow's department stores is the ability to stick to the younger consumers' behaviour, a feature well understood by IADS member The Mall with their recently opened Ngamwongwan store at the end of 2020.

CBRE Thailand, while assessing the consequences of the Covid-19 pandemic, predicts that, in order to stay relevant, Thai department stores will have to fine-tune their business model in terms of customer experience, activities and added-value when compared to e-commerce.

Gone are the days when Japanese department stores were ruling the Thai market, now dominated by Thai-owned Central and The Mall. But even these local groups have to evolve and adapt. CBRE identifies 3 topics to be addressed in order to do so:

• Customer Shopping experience
• Inventive sales and marketing activities
• Value-added programme.

The Mall, which launched a strategic simplification plan and rebranding process in the second part of 2020 is mentioned as especially innovative on these topics, as exemplified in their new store in Ngamwongwan, which opened in December 2020.

Future of Thai department stores is being redefined

What: the birthday of the first Galeries Lafayette store

Why it is important: Galeries Lafayette Haussmann flagship is a landmark that is very much part of the Parisian, and French, culture

French department store Galeries Lafayette celebrated its 127th anniversary on 15 January. On that day in 1894, founders Alphonse Kahn and Théophile Bader opened their first "Aux Galeries Lafayette" store. Their innovative vision continues to shine today across the group's large store network, and especially at the Haussmann flagship store. Congratulations!

Galeries lafayette birthday post - linkedin

What: the first ever art exhibition by Martin Margiela

Why it is important: this major event will reinforce Galeries Lafayette's pre-eminence in fashion and art, by putting its Art foundation under the spotlights

Martin Margiela, founder of the eponymous brand and who retired in 2009, will show for the first time ever its artistic works. It makes all the more sense than Margiela has always been considered at the crossroads of art and fashion. By showing such an exhibition in their Art foundation, Galeries Lafayette are expecting to create buzz which will for sure reverberate on nearby Eataly and BHV and, of course, Haussman and Champs Elysées stores.

Martin Margiela to Stage Debut Art Show in Paris

What: Falabella will invest USD 2.9 billion to continue the development of its ecosystem, both physically and digitally, improving the multichannel experience for customers.

Why is it important: the investment plan will focus on e-commerce, logistics, and store network.

The key data from the plan are:

• 38% will be allocated to information technology and logistics, in order to increase the level of service and efficiency: implementation of more Click & Collect stations, supported by the opening of new distribution centres in Colombia and Peru. The company will also continue to migrate toward cloud-based architecture to enforce its cyber security, and to improve the digital shopping experience.
• 31% of the total sum will be invested in the store network: the opening of two shopping centres (Mallplaza Comas in Peru and Mallplaza Cali in Colombia) and 80 regional shops. They will also expand the Tottus and Hiperbodegas supermarket network, open a new Sodimac Mexico, and support the development of IKEA in Chile, Peru and Colombia.
• Another 31% will serve improvements in the existent store network, in order to successfully merge the physical and digital experience.

Plan de inversiones 2020-2023

What: Anish Grover has been appointed Director for IT at Falabella Retail

Why it is important: He is already an insider as he took care of the India-based IT activities for Falabella

Mr. Anish Grover will move from India to Chile to take over the supervision of IT at Falabella. Prior to that, he overview IT activities and ecommerce platforms of the retailer in India (where the processing capabilities are based) and was formerly an executive of Reliance and Target.

Quién es Ashish Grover, el nuevo gerente corporativo de TI de Falabella

What: Mr Gonzalo Somoza will step down as CEO of Falabella retail, and will keep advisory and director roles in the group's companies.

Why it is important: Mr. Somoza has led the digital transformation of Falabella retail for 21 years, including the building of its ecosystem backed by strong logistics.

As of 31 March 2021, Mr Somoza will hand over the Falabella retail CEO role to Mr Francisco Irarrazaval, formerly CEO of Ripley for Chile and Peru. Mr Irarrazaval also founded non-profit organisations in Chile. His role will be to ensure that Falabella department stores remain a fundamental part of the retailers( physical digital ecosystem, via innovation and surprising customer experience.

Mr. Somoza will continue to be part of Falabella as an Advisor and Director of companies in the Group.

Falabella appoints Francisco Irarrázaval Chief Executive Officer for Falabella Department Stores

What: the first south Latin American Ikea store will open in Santiago de Chile in March 2022

Why is it important: the entry of the Swedish furniture retailer under a franchise agreement with Chilean giant retailer Falabella. The launch is part of Falabella's investment plan, from which 44% will be allocated to the development of the store network

Falabella will open the first store of the European furniture and decoration company in Santiago de Chile in March 2022. Further openings are scheduled in Chile in August 2022 and in Colombia (Bogota) in the first half of 2023. Ikea will also launch its e-commerce platform in Chile in 2022, and in Colombia and Peru in 2023.

The Ikea project is part of Falabella's 2021 USD 796 million investment plan. 44% of this investment will be mainly used to develop Ikea in the mentioned countries as well as to remodel shopping center and to support the opening of 19 Falabella stores by the end of 2021 (including the expansion of Tottus in Peru and the opening of Sodimac in Mexico).

56% of 2021 investment plan will be allocated to technology and logistics. Falabella also recently shared its investment plan for 2020-2023.

Falabella will invest US$ 796 million in 2021 in technology, logistics and stores [...]

What: Following announcements in December, Galeries Lafayette are considering reducing the headcounts within their travel agency and financial services businesses.

Why it is important: The relatively low magnitude of the plan (189 headcount) compared to the losses induced by the 100-days-long lockdown in 2020 (EUR 1,7 billion) shows the stability of the family-owned business.

Galeries Lafayette are considering making redundant 189 positions, mainly at their travel agency and financial services businesses, following an estimated EUR 1,7 billion loss on turnover in 2020. This is a stark contrast with Printemps which reported a 17% turnover loss over 5 years, leading to 428 departures and the closure of 7 stores, including 3 Citadium.

Un plan de 189 suppressions d'emplois se confirme aux Galeries Lafayette (Paywall)