Fauchon says regional demand rising fast; aims to add 40 stores to global network by 2017
French luxury food group Fauchon plans to grow faster overseas to meet Middle Eastern and Asian appetite for delicacies such as its raspberry champagne eclair, with the aim of adding 40 stores to its global network of 60 by 2017.
Fauchon, saved from bankruptcy in 2004, already makes 80 percent of its sales abroad and has been expanding in Asia and the Middle-East via subsidiaries in Dubai, Hong-Kong and Tokyo, opening gift stores and restaurants to cater to well-heeled shoppers with a taste for gourmet food.
"We are on track to double in size," Chief Executive Eric Vincent, who joined Fauchon in February 2013, told a news conference.
Founded in 1886 on the Place de la Madeleine in central Paris by a pushcart fruit and vegetable grocer named Auguste Fauchon, the company has become famous for products like its eclairs, macaroons, foie gras and Brie cheese with truffles.
Fauchon held an "eclair week" at its Paris store in early September, according to its website, where it showed off eclairs designed in the Middle East and Asia by local pasty cooks.
The unlisted company competes in the luxury food emporium world with rivals such as France's Hediard to Britain's Fortnum & Mason.
Michel Ducros, the entrepreneur who rescued Fauchon in 2004, holds 90 percent of the capital, with the rest in the hands of management and some private investors.
Fauchon reached operational break-even in fiscal year 2008/09 and is now debt-free, generating a free cash flow of around 3 million euros, Vincent said.
While most of its expansion since 2005 has been through franchises, the group directly owns the Paris flagship store on the Place de la Madeleine, one store in Monaco and two in Hong Kong.
Fauchon, which employs 300 people worldwide, had sales including revenue from franchises of 247 million euros in the year to March 31, a 45 percent jump from 170 million in the previous year.
Longer-term, Fauchon, which will open one store in Mexico before year-end, wants to tackle expansion in Latin America, notably in Brazil, where it has no stores.
It also wants to use Morocco as a platform for future expansion in North and West Africa, Vincent said, with Russia and China seen as other potential markets.