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Back in October 1912, haberdasher Théophile Bader oversaw the grand opening of his shopping bazaar, Galeries Lafayette. It was a spectacle: the staircase was inspired by the Palais Garnier and a 40-metre-high, 30-metre-wide cupola, decorated by master glassmaker Jacques Gruber in a floral neo-byzantine style, bathed the shop in golden light. There was a tearoom (decorated by the artist Leonetto Cappiello), a reading room and smoking room, 96 departments and a rooftop terrace overlooking Paris, where aviator Jules Védrines would land his plane in 1919.

Not long after, Bader acquired a second site on the nearby Champs-Élysées but was thwarted in his efforts to develop it. “He couldn’t do it because of the financial crisis of the late 1920s,” says his great-great-grandson Nicolas Houzé . “[The plot was sold in 1929] and it became a bank and then the Virgin Megastore flagship.” He is sitting in an armchair in one corner of an executive apartment on the top floor of Galeries Lafayette’s flagship on Boulevard Haussmann. Wearing a dark suit, the 44-year-old scion resembles a modern-day Octave Mouret, the protagonist of Émile Zola’s department-store thriller Au Bonheur des Dames.

History would have it that Houzé and his family would have a chance to reverse their ancestor’s misfortune. Nearly a century after Bader lost the site, the former bank at 52 Champs-Élysées became available and Group Galeries Lafayette – which is still chaired by Houzé’s father Philippe and supervised by his aunt, Patricia Moulin Lemoine – jumped at the chance to acquire it. “We have a story with this building,” says Houzé. “We felt the Galeries Lafayette and the Champs-Élysées brands meant something together. It’s the art de vivre à la Française.” The family’s new enterprise – set to open this March – has all the verve and architectural ambition of Théophile Bader. The project was awarded to Denmark’s Bjarke Ingels, known for an out-of-the-box largesse found in works such as the Danish Maritime Museum. Though he has little retail experience, the group was drawn to his hybrid methodology mixing art, architecture and urbanism. The new shop will feature a sweeping glass staircase and a series of suspended glass boxes on the second floor. There will be a purpose-built events space and restaurants overlooking the avenue.

“With the architecture we thought we had to break the rules,” says Houzé. “We chose Bjarke Ingels as he came with the most disruptive approach. We wanted someone without any prejudgements about retail. With Bjarke, that was the case: he’d never worked for a retail company before.”

The Champs-Élysées branch is a departure from the group’s traditional department store format. While Galeries Lafayette’s other stores are arranged around conventional retail categories and subdivided into brands, the new project will scrap these commercial silos and curate the space in more inventive ways. “We wanted this store to be led by concepts rather than departments,” says Houzé. “It will be a kind of pilot for the future of the Galeries Lafayette stores.”

Rather than having concessions for brands, each manned by different staff, the Champs-Élysées shopfloor will be patrolled by a dedicated team. The 300 recruits underwent unique training in an in-house retail academy, which included a course at l’Institut Français de la Mode. “This store has to be very experiential,” says Houzé, citing Paris’s recently closed Colette and London’s Dover Street Market as influences. “It will be totally separate from the rest of the Galeries Lafayette. [The team] will think differently [from the rest of the Lafayette stores] and think on their own.”

For Houzé, the shop is an answer to the challenges that his sector is facing. “It is true that the department store model is challenged by e-commerce, by the ‘retailisation’ of the brands [ie. more mono-brand shops],” he says. “Opening a store like this one is a way to address how the department store can be different. It’s not looking at [separate] departments: man, woman, accessories, and beauty. We wanted this store without barriers. We want a fluidity.”

The venture hasn’t been plain sailing. As the branch prepares to open, France’s gilets jaunes movement has seized the city’s boulevards; in December the violent street protests occupied the Arc de Triomphe on the Champs-Élysées. Luxury shops across Paris have boarded up their windows; at the end of last year, retailers across France had lost some €2bn due to the protests (according to fcd, the French retail federation). “At the moment it’s a bit challenging,” says Houzé, adding that the project has been negatively affected by the gilets jaunes protests. “We hope that by the opening of the store, this movement will be over. It’s not a good image of France. But we have great hope in the French government and Emmanuel Macron.”

The recent ransacking of the Champs-Élysées isn’t the avenue’s only image problem. Even though it’s revered for its impressive scale and architecture, the Champs-Élysées has struggled to retain its romantic charm and luxury prowess. In its heyday it was a place for live music, independent cinema and unique high-end retail; in 1914 the House of Guerlain opened at 68 Champs-Élysées with a stunning interior by Charles Mewès, architect of the Ritz Paris. Yet after the 1960s the avenue entered a period of decline: car dealerships moved in and it became populated by fast food outlets, big chains and the Disney Store. Even though city hall tried to resist the “banalisation” of the avenue, they failed to keep out h&m despite the then mayor of the 8th arrondissement declaring that “the image of France was at stake” with such a move.

Houzé insists that the tide is turning. He wants to contribute towards the avenue’s rejuvenation. “It’s [already] moving the right way. Bulgari has opened a store. Dior will open in the next few months. There are no more car dealers – except for one, Renault. It’s upscaling.”

He hopes to lure Parisians back to the avenue. “When you are French and Parisian you love to say that this is the most beautiful avenue in the world – and it’s true, it is one of the world’s greatest shopping streets,” he says, noting that of the 300,000 people who visit the Champs-Élysées each day, half are French. “It has always been a great trading area. I think the Parisians will come back to the Champs-Élysées. Our store will be a destination. On the ground floor there is a great place for events. [Each one] will be programmed around the arts, fashion and music.”

Indeed, while many department stores are stuck in the past, Group Galeries Lafayette has remained forward-looking. Last year it opened the Rem Koolhaas-designed Fondation Galeries Lafayette, an institution dedicated to creativity, in the Marais. And it is in the process of overhauling its Boulevard Haussmann flagship, under the direction of UK architect Amanda Levete. The project is slated to last five years.

The family tradition of taking risks and creating a spectacle of retail is being continued and reimagined by Nicolas and his brother Guillaume, the group’s image and communication director. As is the sense of ambition that defined the firm’s early years: the group plans to turn its €4.5bn annual revenue into €5.5bn by 2020.

“As a family business we are not looking at what we are doing the day after tomorrow but building for the next generation,” says Houzé. The focus on legacy is clear. “It has been five generations that we have been in the business. We are retailers and we are always curious about what is happening around us. We have been through many evolutions of the industry over the past 125 years. But we are still here and in pretty good shape, with the ambition to be here in the next 125 years.”

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