Arnault gives a billion dollars to repair a department store in Paris

Paris - The richest European, owner of the luxury goods manufacturer LVMH Bernard Arnault is investing more than one billion dollars (23.1 billion CZK) in the department store La Samaritaine, which is set to reopen next April after 15 years of renovations. Arnault is launching the new department store at a time when many brick-and-mortar stores are closing, as consumers increasingly prefer online shopping, such as Amazon.com. The entrepreneur expects that his project will mainly appeal to wealthy Chinese customers, as reported by agency Bloomberg.

LVMH acquired La Samaritaine in 2001. Similar "temples of consumption" were once key drivers of retail, but the situation has changed in recent years. Consumers are increasingly shifting online, and retail chains, such as American Macy's and British House of Fraser and Debenhams, have closed dozens of stores. Barneys New York filed for bankruptcy protection in August, and many shopping malls in the US are half-empty.

LVMH hopes that the store will be primarily supported by tourists from China. Despite the trade war with the USA and anti-China protests, it is precisely the Chinese who are driving the growth in luxury goods sales and are loyal visitors to many LVMH stores in the French capital. La Samaritaine is set to focus primarily on wealthy international clients.

La Samaritaine was once the largest and most accessible of the major Parisian department stores. Its retail space will now be halved, with the other half occupied by the five-star Cheval Blanc hotel, restaurants, offices, and a spa by Christian Dior. The retail spaces will be filled by DFS, a luxury goods retailer of the LVMH group, which primarily operates duty-free stores.

DFS expects that the compact shopping center featuring over 600 brands will attract several million visitors annually. LVMH hopes that exclusive fashion lines, specialized cosmetic brands, and restaurants ranging from fine dining to buffets will also draw in local customers.

LVMH bought the department store with the aim of renovating it and keeping it open. However, the plan had to be changed after four years due to safety risks. Among other issues, the original glass tile floor, partially covered by carpets and equipped with additional electrical wiring, could withstand a fire for only 90 seconds. It then took years to complete the redesign of the reconstruction.

LVMH reportedly paid about 225 million euros (5.7 billion CZK) for the control of La Samaritaine in 2001. Later, it acquired the remaining stake for an unknown amount. They will spend 750 million euros on renovations and fittings.