Printemps CEO confident in Christmas, luxury focus

By Lionel Laurent

PARIS (Reuters Life!) - Printemps' flagship Paris department store says it is set to reap the benefit of a $105 million refurbishment and a new luxury strategy as it kicks off the Christmas season.

The retail chain's chief executive, Paolo de Cesare, told Reuters on Thursday he was "optimistic" about holiday trading at a time when French consumers are still showing signs of caution.

"Summer was difficult, but I see now customers coming back," said de Cesare. "In the end there is the spending power, and consumers are ready to invest where they find the right opportunity."

De Cesare said a week of sales in mid-November had brought in 30 percent revenue growth when compared to the same period a year ago. He added the discounts were "very targeted" and would not affect holiday trading or bigger January sales.

New data on Friday showed the French economy grew by 0.3 percent in the third quarter of 2009, with job losses slowing while consumer spending stabilized.

The holiday season is still expected to be subdued, according to several analysts, citing rising unemployment and the strong euro's negative impact on tourism flows.

"Although consumption is not plummeting like some people feared, it's still really weak when compared to historical patterns," said Diego Iscaro, an economist at IHS Global Insight.

LUXURY FOCUS

The Christmas season will also put Printemps' mostly complete $105 million renovation to the test. The revamp is part of the luxury-focused strategy under Italian-born de Cesare, who took the reins after Deutsche Bank and Borletti Group bought Printemps from PPR in 2006.

"Luxury over the Christmas period is kind of a core period because people will buy a high-end good maybe for their husband or wife," said Simon Chinn, analyst at Verdict Research. "Leather bags and accessories generally do quite well."

Printemps, which has 17 stores in France and one in Japan, has progressively gutted its Paris flagship over the past two years, converting the closed-off floors into an open-plan design and replacing the lift system with central escalators.

It now has three floors dedicated to accessories, covering 9,000 square meters, replacing a broader selection of lingerie, jewelry and "accessible" accessories.

The store also has a newly refurbished facade, which was officially opened Thursday night. The 150-year-old domes and mosaics were bathed in violet light while marionnettes danced across Russian-themed window displays.

Inside the store, two giant sets of Russian dolls created by Chanel and Dior loomed over curious shoppers and tourists.

The store has also shed mid-market brands like Zara and Naf Naf, ushering in instead more exclusive names like Miu Miu and giving fashion guru Maria Luisa Poumaillou her own store, "Maria Luisa."