If you are interested in an expert's view on the future of the luxury department store, Maurizio Borletti - successful retail entrepreneur and former shareholder of icons La Rinascente and Printemps - will gladly provide one at the congress The Future of Department Stores.
Food replaced toys
Maurizio Borletti was born in retail, so to speak: he is the grandson of Senatore Borletti, who in 1917 launched the La Rinascente brand, the luxury department store chain that now has nine branches in Italy. Borletti was CEO of well-known tableware company Christofle, was a shareholder in La Rinascente between 2005 and 2011, invested in French department store company Printemps between 2006 and 2013 and is today one of the shareholders of Highstreet, the company that owns most of Karstadt's real estate.
Luxury department stores have thus been the thread running through his career, and it has remained a passion: "As a child, a department store meant toys to me, above all else. Later, perhaps, I became more interested in the fashion department. Now when young people come to department stores, I think they are mainly attracted by the food department. Food has somehow replaced toys," he said in an interview with RetailDetail.
Service and innovation
"Luxury is the key to success for department stores", is his belief. "Why? Because department stores are expensive to run, with high staff and property costs, so they need products that are pricey and generate reasonable margins. With basic products you just do not have those margins, you have to focus on efficiency. Department stores are not so much suitable for products that people buy out of a basic need, but rather for products that people desire as a source of pleasure for themselves or to give to someone, as a gift."
He put this vision into practice himself at La Rinascente from 2005: "The growth of the luxury sector was significant, but companies like La Rinascente had not evolved: they were selling cheap products with poor service. We therefore invested a lot in the company: we beautified the shops, brought back the service, innovated, added new categories, with a whole floor dedicated to food. That brought a new impetus."
The power of beautiful locations
The biggest threat to department stores is not online, but mismanagement, Borletti says. There are plenty of opportunities: "Attracting customers and managing the customer relationship remain very expensive. In this logic, department stores have two advantages: firstly, they already have the relationships, and secondly, they have these beautiful locations with enormous traffic. You have great opportunities to build a relationship at low cost if you have a lot of traffic. And when you build a relationship, you do not build it for one brand, you build it for many brands."
On 21 October, Maurizio Borletti will speak at RetailDetail's international conference The Future of Department Stores, which takes place in Shopping Stadsfeestzaal in Antwerp. A unique opportunity to meet an international retail top executive and learn from his rich experience. Through this link you can find more information about the programme and you can order tickets.