La Redoute to focus less on fashion, more on home decoration
French e-tailer La Redoute is introducing radical strategic changes, as online sales are experiencing a generalised decline, due also to weaker consumer purchasing power. A former mail-order specialist now turned e-tailer, La Redoute has always relied heavily on the fashion category, but has decided to streamline its assortment to focus on the home decoration segment. The 2024-2027 strategic plan of La Redoute, owned by the Galeries Lafayette group, centres on its ambition to “become a European leader” in this market. La Redoute is currently the third-largest e-tailer in France in terms of home decoration purchases, with 6.2 million unique visitors per month. Just over 60% of its revenue is generated by this segment, and the company’s goal is to grow this share to between 70 and 75% within four to five years.
“We have taken the strategic decision to focus on home decoration, capitalising on our two brands, La Redoute Interiors and AMPM [...]. In order to become one of Europe’s leaders in this segment, our international expansion will focus primarily on boosting our performance in two strategic markets with high potential for La Redoute, Switzerland and Italy, where we plan to open physical stores,” said Philippe Berlan, managing director of La Redoute, in a press release.
The company is keen to power up its own home decoration brands targeted at the general public, but also to appeal to a business clientèle, extending its presence in the hotel and restaurant sector, as well as supplying products for the offices of medium and large companies.
As a result, La Redoute is set to reduce its fashion range, which currently accounts for just under 40% of overall sales. The company’s fashion brand, La Redoute Collections, intends to “take the opposite road to fast fashion,” with collections “whose timelessness and quality make it possible to extend the products’ lifespan.” It will focus more on wardrobe essentials, and intends to gradually increase the presence of products that are made in Europe. In parallel, La Redoute said it will “streamline” its selection of guest labels, without providing further details about how many of them, and which ones, will remain. But this means that La Redoute will undoubtedly become much more selective, not exactly good news for fashion brands, for which an interesting online wholesale option is likely to vanish.
“Although its long-established ready-to-wear business has become less central to La Redoute's medium-term strategy, [the company] is committed to revamping its fashion assortment to retain its customers, whose main concerns are rising inflation and environmental protection,” said La Redoute. The company has recently relaunched La Reboucle, a website selling second-hand fashion and home decoration products.
Outside France, where La Redoute generates 35% of revenue, the strategy will focus on pursuing growth on two main markets, Italy and Switzerland. The effort will be driven by La Redoute’s home decoration collections, for which it plans to open six physical stores in these two countries from 2025.
Also on the agenda, La Redoute’s digital transformation, relying on a plan to develop an app-first model, to launch a social shopping channel in 2024, and to upgrade the company’s IT tools.
The goal of La Redoute’s owner, the Galeries Lafayette group, is “to ensure profitable, long-term and more sustainable growth in a complex, uncertain and ever more competitive business environment.” La Redoute claims to have 8.8 million active users worldwide, and to generate a business volume of approximately €1 billion. Like all pure players, it is experiencing a slightly troubled phase after thriving during the pandemic.
Ten years ago, La Redoute posted heavy losses and nearly had to file for receivership. It was eventually sold by Kering for €1 to Nathalie Balla and Eric Courteille, two of the company’s former top executives, who successfully relaunched the site. Balla and Courteille sold a minority stake in La Redoute to the Galeries Lafayette group in 2017, and in in spring 2022 the group took complete control of the company.
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