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The French department store group is pushing into India, rethinking China and accelerating in the Middle East, while overhauling its Paris flagships amid a retail recovery.

PARIS — Retail runs in Nicolas Houzé’s blood.

A fifth-generation member of the French family behind Galeries Lafayette, Houzé joined the business in 2006, led the department store as chief executive officer for more than a decade, then followed his father’s footsteps into the role of chair of the group’s executive board last year.

In addition to steering the Galeries Lafayette Group, he chairs France’s strategic committee for fashion and luxury and presides over the union of city-center retailers. On Dec. 1, he was also named president of the International Association of Department Stores, taking the helm as global retail continues to seek recovery.

Last month, Houzé marked a milestone for the group by opening Galeries Lafayette’s first store in India, which is the country’s first stand-alone high-street department store. He has been central to leading the company’s post-pandemic recovery while expanding its international footprint and navigating the shifting trends in fashion, e-commerce and rapidly-changing consumer habits.

In a wide-ranging interview in his office with sweeping views of the Sacré-Cœur, Houzé said the group is doubling down on its department-store model even as much of the industry pulls back, and gaining traction from a growing demand for watches, jewelry and beauty, following the overall rebound at its Paris flagship.

Early acquisitions of multibrand retailers Louis Pion and Royal Quartz, and later the Mauboussin jewelry brand, helped secure the group’s position in the watch and jewelry segment and reinforced relationships with brands such as Rolex — all of which were aimed at strengthening Galeries Lafayette’s core business.

While many were sounding the death knell for brick-and-mortar retail during the pandemic, the group took a counterintuitive bet with a 400 million euro investment to renovate its flagship on Boulevard Haussmann in Paris over four years. The move paid off, with sales returning to 2019 levels by 2024.

A further 400 million euros is now earmarked for upgrades in Paris — including a full overhaul of the stand-alone men’s building to be completed by the end of 2027 — and across its regional network, positioning the family-owned retailer for a new phase of growth.

Galeries Lafayette is still pursuing measured international expansion and strengthening its brand globally. It is reexamining its China strategy, and has an eye on opportunities in the Middle East, including Riyadh.

Houzé spoke to WWD about growth opportunities, why he’s staying out of the U.S., the controversy over Shein’s presence in France, and the future of department stores as entertainment. The transcript has been edited for length and clarity.

Nicolas Houzé: We thought that it could be interesting to enter India back in 2017, but we were convinced that we wouldn’t be able to do it by ourselves. We were looking for a partner and are really happy to partner with the Birla group, which is also a family business.

We’re really proud of what we’ve done. We know that it’s a complicated market, with only a few shopping malls, no department stores. It’s the first time that a department store has opened a stand-alone, high-street location. What we can offer with the experience, the store, the architecture, the brands and the building is amazing.

[In the first two weeks of opening] we are welcoming between 500 and 1,000 customers buying [daily]. We are on track, and the turnover that we have been doing for the past two weeks is what we expected. It’s a great, great start.

We are looking at opening a store in Delhi. When we signed the partnership, we said it would be the year after Mumbai, but looking at [possible locations] it will be more like 2028. But India is the place for us.

N.H.: Over the past four years, we have quadrupled the turnover that we are doing with U.S. customers, doubled the turnover for European customers, and grown by double digits with French customers.

This year, we will welcome between 32 million and 35 million people entering the store, with more than 8 million transactions. Those are huge numbers, and they are still growing. By 2024, we reached nearly the same turnover that we were doing in 2019. So, we are really on track for growth [this year].

We managed to de-stress the business. We have always wanted to be a global department store welcoming the world, and it’s more the case today that it was before COVID-19.

N.H.: That it’s a tough one, to be honest. And looking at what we have, we have different sizes of department store. The stores that are working quite well are the smaller ones, like Shenzhen and Macao, better than Shanghai and Beijing. Shenzhen is still growing very fast.

The big department stores that we built back in 2013 are no longer a good answer or the right answer for the Chinese customer. So, we are currently working with our joint venture partner Hopson Group to see what we can do with the two locations that are the most difficult.

N.H.: We are in the Middle East — Dubai and Qatar — and we are looking at a new project in Saudi [Arabia], in Riyadh, so we think that the Middle East is a good location also to develop Galeries Lafayette.

N.H.: To be honest, India is for us the real — I won’t say bet, because we are partnering with [Birla] — but outside of that we are not looking at other projects, even though every week we are asked [to open] new locations — projects in Greece, in Azerbaijan. But we are really cautious. Our goal is not to open stores and to close them in a few years. We know that the Galeries Lafayette brand is really powerful, and we are going to be very cautious about future developments.

N.H.: Galeries Lafayette is one of the leaders of the industry. Look, we were quite hurt by COVID-19, because we were the biggest [department store] and we were closed the longest. When we came out of COVID, together with the team and also within the family, we thought that we should focus on our strengths and focus on our core business, which is Galeries Lafayette. What was not exactly at the core of it, we needed to find a solution to that.

Looking at the department stores, we had two brands, Galeries Lafayette and BHV. For the past 30 years we’ve been running those two brands, and it has always been difficult because the positioning of the two is different, and because it is so intensive in terms of [capital expenditures]. We decided that it was time for us to find a solution for BHV, and we sold it. It was a way for us to refocus our energy.

N.H.: No, I don’t regret it because at the time when I took this decision, I thought that was the best [company] to operate BHV. But after that — it’s a complicated business to operate a department store. He has a vision that is different from ours and, I don’t know what will happen in the future, but perhaps it will change and no longer be a department store, but a location with some shopping destinations, some restaurants, perhaps a hotel. It will be something different from the department store, that’s my point of view, but I’m not sure of that. And at the end, I think that he did something that we could have done, but we didn’t want to do that because it was not in our essence.

N.H.: We will review our options — to sell it to someone else or to keep it. You know, the department store business is really linked to real estate. We think, and he also thinks, that he needs to acquire the building.

N.H.: Yes. He decided that he wanted to open Shein stores, and we think that is not the same positioning; Shein customers are not the same as Galeries Lafayette customers. Since he told me that he wanted to operate Shein within BHV and a few Galeries Lafayette stores, I said, “You can do what you want with BHV, but you won’t be able to do what you want with Galeries Lafayette because you don’t own the brand.” From our point of view, there is [no way] to have Shein within Galeries Lafayette. And after weeks of discussion, we both decided that it was time for us to separate the businesses.

We have tried during our history to open fast fashion within Galeries Lafayette, and we’ve closed them each time. We’ve opened Zara, we’ve opened Topshop. We’ve opened also, perhaps not fast fashion, but looking at the positioning, very low fashion like Jennyfer.

Of course we managed to attract customers, but there was no cross-sell with the other brands. When we build the assortment of Galeries Lafayette, we try to create coherence and to make sure that every brand will respond to our customer base. Fast-fashion brands were not the right answer for our customer — and it was not even ultra-fast fashion [like Shein].

N.H.: We have still grown by 5 percent over 2024 and it’s across all categories. Of course, we can see that some brands are [in a] much more difficult situation than others, and some categories that are more difficult than others. But all in all, the luxury [brands] that we’ve opened [in the revamped space] on the ground floor are doing quite well, and we are really happy with the business at the moment.

N.H.: Ready-to-wear is a bit softer and leather goods on the ground floor. The ones that are really booming are shoes, watches and jewelry.

N.H.: We are quite confident [with the location] and the Champs-Élysées will soon welcome huge new stores for luxury brands [such as Louis Vuitton]. It’s going to be nice, but we won’t be a luxury destination. We will stay like we are, with some luxury, but also fashion and premium brands.

The local portion of customers is smaller than what we have in Haussmann. In Haussmann, more than one-third of the customers are local. In the Champs-Élysées store, it’s around 20 percent, and 80 percent are international customers. There is a lot of foot traffic, with between 200,000 and 300,000 people walking on the Champs-Élysées every day — and we are welcoming a lot of them. One of the challenges that we have to face is that lots of people enter the store, but we have to work on the transformation rate, which is quite low compared to Haussmann and the other stores in the network. We are welcoming lots of customers that are curious visitors and not buyers.

N.H.: We work with the workforce and with the brands to make sure that we have the right product, and the right people that are well trained.

It’s quite difficult to keep people. We had a high turnover rate. When we opened the store in 2019 we had a specific way of doing the business with only Galeries Lafayette staff, and they were very well trained. But a lot of them were hired away by brands. Since then we’ve had to renew almost all the staff of the store, and it’s always a challenge to make sure that they have the right training, the right way of handling the customer relationship, and to make sure that the transformation rate is in their mind. It’s improving every year. We are growing in the Champs-Élysées store faster than the rest of the stores that we have in France.

N.H.: It’s complementary. It’s much more in the home decoration business, rather than the fashion one. The market is difficult and but we’ve hired a new CEO [Béatrice Héricourt] that joined the company six months ago. She’s reviewing the business, and she will propose a new three-year strategy by the end of the year. With a strong brand like La Redoute, we are really confident in the future. It is really a pillar of the group now.

We are investing a lot to make sure that galerieslafayette.com plays a role to complement the store, and since we’ve implemented the new SAP platform with new tools, the business is growing really fast. We are really confident that galerieslafayette.com will play a role in the future.

N.H.: To be honest, we don’t push the fur, and we make sure that the brands that we are welcoming have the fewest products with fur. The fur that is sold in Galeries Lafayette is only with luxury brands. Few of them are doing that, and it’s only under European and French regulations. For the moment, we have no plan to change that. We are not pushing or increasing the sales or the place of fur in our assortment. We have only few brands that are proposing fur products.

N.H.: It’s mainly Fendi.

N.H.: The watch and jewelry [category] is quite a good business, and the beauty business is doing very good. Overall, perfume, makeup and skin care are growing quite well. Well-being was not part of the business three years ago. We’ve decided to implement new brands and new categories around well-being at the Haussmann store and throughout the network.

We’ve increased the size of the beauty [offering] because we think that it’s a good category for us. [In fragrance], we welcome brands like Creed, and the high perfume from Dior and Chanel, that are not carried in Sephora. It’s a way for us to differentiate from the specialist stores.

With Korean beauty, we have done some tests, but it has not been a success for us. We tried a long time ago, but perhaps we were too early. It’s a question that we have at the moment, because it seems to be popular with the next generation of young people. We will continue to explore.

N.H.: We are strong believers that physical retail will continue to be a successful business, if it’s not boring. We think that boring retail is dead.

N.H.: Since the beginning of the year, we’ve been growing double digits. Over the next three years, our plan is to double the business.

N.H.: When it’s about convenience, you can buy everything online. But when you want to fit the product, when you want to test the product, when you want to spend hundreds of euros or thousands of euros, you will come to a store.

We have to be in the entertainment industry — not playing a role like Netflix — but we have to entertain to make sure that people, each time they want to buy something, they want to come to a department store. We have to make sure that they will find excitement, find the right products. At the end, boring retail is dead. The department store is more alive than ever.

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Unattractive

As EU industry ministers head to Brussels, a new survey shows that European CEOs are increasingly considering shifting investment from Europe to other countries, writes Barbara Moens.

Context: Boosting competitiveness is a key priority for European Commission president Ursula von der Leyen, who is pushing to implement Mario Draghi’s recommendations to prevent the bloc from falling further behind its global rivals. But the EU has struggled to put them into action.

EU industry ministers are meeting today in Brussels to discuss progress made on simplifying EU legislation, one of von der Leyen’s key strategies to boost economic growth, in addition to tearing down barriers inside the single market.

Ahead of that discussion, the European Round Table for Industry (ERT) has released a new report warning that Europe is “wasting a good crisis” as the bloc has so far not been able to reform.

The ERT’s survey of the chairs and chief executives of around 60 major multinational European companies shows that over a third of CEOs will invest less than planned in Europe or have put their investment decisions on hold. Only eight per cent of CEOs in the survey said they would invest more in Europe than planned.

Meanwhile, 45 per cent said they would invest more in the US than planned.

That outlook is in stark contrast with the optimism of chief executives after the recommendations of both Draghi and Enrico Letta, who in a separate report made recommendations on how to fully integrate the single market.

The ERT survey shows that CEOs are alarmed at the lack of urgency in delivering on Draghi and Letta’s reforms, with 76 per cent saying they have so far seen “little or no positive impact” from EU initiatives.

“Current geopolitics and geoeconomics mean Europe has no time to waste to restore its competitiveness and prosperity. The stakes are too high now to hide behind the cliché of ‘blaming Brussels’,” said Anthony Gooch Gálvez of ERT.

EU countries remain reluctant to recognise qualifications from elsewhere in the bloc, causing one of many barriers to growth

After sending more than 20 letters to German and French authorities over an 18-month period, Ludovic Gerboin just gave up. His attempts to get his French master baker certificate recognised in Germany had hit a wall. 

Back in 2004, the boulanger from Laval had met the love of his life in Bavaria and wanted to open a bakery there. He eventually bit the bullet and took Germany’s Bäckermeister exam. The rules seemed arbitrary, the 47-year-old told the Financial Times: “It was so frustrating.”

Since Gerboin’s experience, the EU has issued a directive aiming to simplify the recognition of professional qualifications. But entrepreneurs and companies operating in services across EU borders still struggle with a web of seemingly arbitrary restrictions.

More than half of the barriers to the single market in services that the bloc identified in 2002 still exist today — in part due to Germany’s reluctance to open up its highly regulated professions to intra-EU competition.

In the whole history of the single market, only one French baker has ever had their certificate from their home country recognised in Germany, according to an EU database. 

Research has repeatedly shown that removing those barriers would hugely benefit the bloc’s lagging economy, as services account for about 70 per cent of its GDP. The IMF estimated in 2024 that Europe’s internal barriers in services were equivalent to a tariff of 110 per cent. 

“Services are an engine of growth,” said Lisandra Flach, economics professor at the University of Munich. Her research showed that services accounted for 82 per cent of European economic growth between 2000 and 2023. Making it easier for companies to offer services across borders within Europe would offer a source of growth, she said — especially at a time when the region’s economy faces pressure from US President Donald Trump’s trade wars.

In reality, however, European companies still face a patchwork of regulation and non-tariff barriers to trade in services within the bloc. Rules governing sectors such as financial markets, transport and energy vary widely by country, while access to many professions is limited by byzantine national rules.

Overall, a quarter of European applicants seeking recognition of foreign qualifications were rejected in 2024, according to an FT data analysis. A further 10 per cent were asked to sit exams or “undergo an adaptation period” before they could be approved.

In total, 711,000 foreign qualifications have been recognised in another member state since 1997, including 356 bakers.

Nurses, doctors and secondary schoolteachers account for 60 per cent of the total, but there is a long tail of smaller professions — including acupuncturists, drone pilots, saddle makers and wine tasters — among the 6,679 regulated activities listed.

Economists warn that such barriers curb not just labour mobility but also investment, innovation and competitiveness.

“Intra-EU trade in services is stuck at a measly 8 per cent of GDP, as compared to 24 per cent for goods, laying bare how limited our not-so-single market really is,” said Anthony Gooch Gálvez, of the European Round Table for Industry. The services sector, he said, was the “sleeping giant” of European integration. “It’s time to wake up.”

Why has the bloc never ensured that French bakers could simply set up shop in Germany? In theory, the principle of free movement of services is anchored in European law. The 2006 Services Directive was intended as a key pillar enabling the freedom to establish a business or to provide or receive services in another European country.

In practice, many aspects of the directive were not implemented or enforced at national level, leaving existing barriers untouched. National rules continue to restrict access to about 5,700 services activities that account for about 22 per cent of the European workforce.

Regulations are especially thorny in Germany, the bloc’s largest member, where guilds of skilled crafts date back to the Middle Ages. In 53 professions, entrepreneurs need a master certificate to run or open a business.

Preparing for the theoretical and practical exams for such certificates generally takes at least one year for full-time students or up to three-and-a-half years part-time. Costs can easily add up to €10,000 along with the wages people forgo while they are studying — and the exams must be done in German.

The government in Berlin even tightened the rules in 2019 when it added 12 more professions to the list, including tilers and makers of wooden toys and barrels. Supporters of such regulations argue they act as a guarantee of quality, but economists see them as barriers to entry that reduce competition and keep prices high.

Even covering a vehicle with a vinyl film — known as car wrapping — is protected by Germany’s centuries-old guild rules, Bremen district court ruled this year. The court found that car wrapping counted as the production of “signs and illuminated advertising”, one of the professions in Germany that require a master certificate. 

The EU’s single market for goods has been extensively tested in court. But there has been far less legal action to enforce a single market in services. And attempts from Brussels to improve it have often been faced with a political backlash.

The French nationalist politician Philippe de Villiers became the poster child for the opposition to the Services Directive when he warned about the threat of the “Polish plumber”, who became a symbolic figure representing eastern European workers allegedly undercutting local labour markets and regulations.

His populist rhetoric fuelled public anxiety in France and across Europe that opening national markets to cross-border service providers would cut wages and undermine social protections. As a result, the directive was ultimately watered down.

Enrico Letta of the IE University in Madrid, author of the 2024 report on improving the single market, said that progress in harmonising rules for professional services had stalled because of “national protections” and the powerful trade associations linked to those professions, especially in Germany and France.

“This is a more complicated obstacle to overcome,” Letta told the FT.

Beyond regulated professions, say experts, many services are genuinely highly complex to integrate across borders.

“Services are incredibly differentiated,” said Jacques Pelkmans of the Brussels-based think-tank CEPS, pointing to different levels of integration in services such as transport, energy and financial markets. 

Services can be less mobile and more local than goods, he says, and language differences also play a greater role.

Amid Trump’s tariff threats and the bloc’s push to become more competitive, Brussels is again eyeing the possibility of overcoming national interests to reap the fruits of more economic integration. European Commission president Ursula von der Leyen last month set out plans to implement a new single market strategy by 2028, including efforts to harmonise authorisation and certification schemes across the bloc.

The commission wants to make it easier to provide services in a different country on a temporary basis, for example to facilitate cross-border car rentals and installation, maintenance and repair services. 

But translating political momentum into concrete measures will not be easy.

“European leaders are happy to agree on the need for more competitiveness,” said one EU diplomat. “But when it comes to actually giving their own national sensitivities, they all want the others around the table to move first.” 

For Gerboin, the French baker in Bavaria, the cross-border hurdles in his own profession reflect the “pride of bakers” — but are overdone.

“No matter if you have a master certificate or not, the best baker stays in business,” he said. “If your bread is not good, you will not be successful in the long run.” 

Total merger value hit $543 billion, the highest total since 2021 and more than the last two years combined.

U.S. tech mergers rebounded to their highest levels since 2021 this year, driven by big bets on AI and more tie-ups under a deal-friendly presidential administration.

Total tech merger value reached $543 billion, more than the combined value of the past two years, according to data provider LSEG. Goldman Sachs and Qatalyst topped the charts for the year, both earning more than $400 million in fees.

“We’re at one of these junctures where everybody wants to be the winner, but we don’t know things will play out,” said Amr Razzak, a partner at law firm Skadden, Arps, Slate, Meagher & Flom. “Companies are investing very large sums of money, trying to hire people, buy companies. They’re moving fast, spending a lot and testing things, so inevitably there’s going to be some trial and error.”

CEOs are also taking advantage of the Trump administration’s more favorable view of mergers to pursue deals they might not have considered in the past, according to bankers and lawyers who work on these deals.

Several major acquisitions were easily cleared, such as Google’s $32 billion deal for cybersecurity startup Wiz. Palo Alto Networks’ $25 billion proposed acquisition of CyberArk in July received early antitrust clearance in September.

The environment has paved the way for rivals to merge. These included a $22 billion tie-up between Apple chip suppliers Skyworks and Qorvo announced in October.

Even if regulators look to block a merger, deals can be cleared if companies settle by selling parts of the business to a competitor. For example, the Department of Justice sued to block HPE’s $14 billion acquisition of Juniper Networks in January. HPE later agreed to sell off a small piece of its business to settle the suit and the deal closed this July.

The comeback in tech M&A has been good news for investment banks. Goldman Sachs is emerging as one of the big winners from the rebound. The bank has advised on roughly 58% of the deals by value, up from 32% in 2024.

Its work advising videogame maker Electronic Arts on its $55 billion take-private scored the most lucrative M&A transaction in the bank’s history, for a fee of $110 million, according to securities filings. (It will only receive the full fee when the deal successfully closes.) It also advised cybersecurity startup Wiz on its $32 billion sale to Google, and Informatica’s $8 billion sale to Salesforce this year.

With less than three weeks of the year remaining, that performance puts Goldman Sachs well ahead of rival Wall Street banks JPMorgan Chase and Morgan Stanley, based on the share of deals it advised on. Goldman has claimed the top spot every year since 2021.

However, one boutique shop with less than 80 bankers is almost tied with Goldman Sachs when it comes to another measure, the share of fees. Tech-focused Qatalyst Partners notched its best year in a decade on that metric, taking in 8.6% of total M&A fee revenue. Goldman took in 8.9%. The investment banks’ market share of revenue may not include total fees for deals that haven’t closed.

Qatalyst mostly focused on selling tech companies for at least $1 billion. It advised on some of the largest deals this year, such as CyberArk on its pending $25 billion sale to Palo Alto Networks and Skyworks’ merger with rival Qorvo.

A surprising name emerged among the top five banks based on the fees it received. After falling out of the ranks of the top 10 banks for the past three years, Citi is staging a comeback of sorts in the tech M&A business. It most recently advised Marvell Technology on its acquisition of Celestial AI for up to $5.5 billion.

Bankers, as always, are confident that M&A will be robust in 2026.

Nadir Shaikh, a partner at Qatalyst, said a healthy equity market could set the stage for more tech M&A deals ahead as it creates a viable option for attractive private company targets, which could opt to go public instead of selling. (Qatalyst doesn’t underwrite IPOs.) Companies that eventually go public could also grow to formidable market capitalizations and become “acquirers in their own right.”

More than 50 tech companies went public this year, raising about $16.8 billion. That was an improvement compared to the average of 29 companies a year over the past three years, but it’s still well below the 2021 peak where 127 companies raised $74.4 billion on the public market, according to Dealogic.

Shaikh is hopeful about the possibility of a $100 billion tech M&A deal.

“Now just as there are more trillion-dollar market cap companies than five years ago, I think M&A deal sizes will also expand consistent with market caps and there’s going to be a $100 billion deal that gets done somewhere.”

A new report from WPP Media says global ad revenue will reach $1.14 trillion this year

Advertising spending will grow more than predicted in 2025 because tariffs didn’t take as big a bite as expected and AI provided a boost, according to a new forecast from media investment group WPP Media.

Global ad revenue excluding U.S. political advertising will grow 8.8% in 2025 to $1.14 trillion, WPP Media said, raising its forecast from the 6% it predicted in June. Next year will see worldwide advertising grow 7.1%, it said, revising its June forecast of 6.1%.

Marketers softened the impact from tariffs by moving up imports to beat their implementation, carefully managing their inventories and absorbing some of their costs.

“In June, we were reacting to more recent tariff announcements,” said Kate Scott-Dawkins, president of business intelligence at WPP Media and lead author of the report. “The summer gave us a chance to see how those played out, to see how resilient consumer spending was off the back of those announcements in markets around the world, to see what sort of negotiations and arrangements were made that lessened the impact of some of those tariffs.”

Some of the sting from tariffs was only delayed, however, and will finally be felt in 2026, the report said.

The surge of AI investment also created more ad spending than originally expected, WPP Media said. Some businesses are using the technology to make processes, including marketing and product development, more efficient and directing the savings into new ad buys, Scott-Dawkins said. New companies are also forming in the AI sector itself and in turn becoming advertisers of their own.

The forecast also said that global retail media, in which businesses such as grocery and big-box chains offer advertisers ways to reach consumers using customer data, will surpass television advertising revenue in 2025 for the first time with an increase of 11.3% to $174.2 billion.

TV ad spending across both traditional and streaming viewing will rise 0.6%, WPP Media said.