What: The Business of Fashion wonders about the relevance of La Samaritaine’s opening in 2021

Why it is important: There is little doubt that La Samaritaine is a business model conceived to be thriving with tourism. But what if tourism, and tourists, change by nature and spend less during their travels? This is an option that is considered by Bain & Co.

La Samaritaine opened its door mid June after 15 years of works and EUR 750m invested, generating an intense coverage in press all around the globe. However, analysts are wondering about the timing and the long term rationale of such a move.

Even if La Samaritaine’s officials maintain that the store is also intended for local customers (which remains to be seen – read our exclusive here), the brand selection, product offer and DFS overall supervision tend to suggest that the bulk of the business will be done with tourists… when they come back. The article makes the usual speculations on the relevance of the department store format and predominance of e-commerce, but makes an interesting point regarding tourism: even though they will for sure come back, will they still be inclined to spend during their travels? Bain & Co projects that 30% of luxury purchases will take place in China by 2025 (tourism is expected to recover by 2024 only,  according to McKinsey).

La Samaritaine is however well positioned to be a landmark building to be an mandatory stopping point for tourists, such as Harrods, Le Bon Marché or Galeries Lafayette Haussman, the second most visited place in Paris after the Eiffel Tower and not mentioned in the article. However, there is no mention either of the Harrod’s initiatives in China, with its stores cum showrooms open in Shanghai and Beijing.

This kind of vision, opposite to La Samaritaine’s, raises questions re. its future profitability. The article speculate that this is only possible with companies such as DFS, able to spread profits and losses over the world, including la Samaritaine’s operations.

LVMH’s Billion Dollar Retail Bet