Galeries Lafayette pulls out of Eataly franchise in France

What: After five years of operation and significant losses, Galeries Lafayette transfers control of the Eataly franchise and its Paris Marais flagship store back to Eataly Group, which plans to expand independently in French airports and train stations.

Why it is important: This development reflects broader shifts in retail strategy, where both department stores and food retailers are reassessing their partnership models to optimise performance and focus on core competencies.

Eataly has announced an agreement with Galeries Lafayette to reclaim its franchise rights in France and take over operations of the Eataly Paris Marais flagship. Opened in April 2019 within the BHV Marais, the 2,500-square-meter store, featuring seven dining spaces, failed to meet its sales targets, achieving only €20 million in 2023 compared to projected goals of €30-35 million. The venture accumulated total losses of €24.5 million over five years, leading Galeries Lafayette to inject €23.5 million for recapitalisation before the transfer. Under new ownership by Investindustrial, which holds 52% of its capital since 2023, Eataly plans to expand directly in French airports like Charles de Gaulle and Orly, as well as train stations and strategic urban locations. 

IADS Notes: While Galeries Lafayette pursues a €400 million investment plan for store modernisation, the underperforming Eataly venture no longer aligns with its priorities. This follows the recent sale of BHV Marais and demonstrates the group's focus on core operations under Nicolas Houzé's leadership.