La Redoute, the renowned French e-tailer, is implementing significant strategic changes in response to a decline in online sales due to weakened consumer purchasing power. Traditionally a mail-order specialist, La Redoute is now shifting its focus to become a dominant player in the home decoration segment. In its ambitious 2024-2027 strategic plan, the company, owned by the Galeries Lafayette group, aims to establish itself as a leading force in the European home decoration market. With 6.2 million unique visitors per month, La Redoute currently holds the position of the third-largest e-tailer in France for home decoration purchases. Remarkably, over 60% of its revenue comes from this segment, and the company intends to increase that figure to between 70 and 75% within the next four to five years.

Philippe Berlan, the managing director of La Redoute, explained the reasoning behind this decision, stating, “We have strategically chosen to focus on home decoration, leveraging our two brands, La Redoute Interiors and AMPM. Our international expansion will primarily target Switzerland and Italy, where the plan is to establish physical stores.” In addition to catering to the general public, La Redoute is also keen on serving business clients by venturing into the hotel, restaurant, and office supply sectors.

To execute this shift in focus effectively, La Redoute plans to decrease its fashion range, which currently contributes nearly 40% of overall sales. The fashion brand, La Redoute Collections, will prioritize timeless and high-quality products that have a longer lifespan. Moreover, the company aims to enhance the presence of products manufactured in Europe. While La Redoute will simplify its selection of guest labels, specific details regarding which labels will remain have not yet been disclosed. This change might not be well-received by fashion brands, as they could lose an important online wholesale avenue.

La Redoute is fully committed to revamping its fashion assortment to retain its customers, who are increasingly concerned about escalating inflation rates and environmental preservation. The company recently relaunched La Reboucle, a website dedicated to selling second-hand fashion and home decoration products. Beyond France, La Redoute plans to concentrate on expanding its foothold in Italy and Switzerland. By 2025, the company aims to open six physical stores in these countries to showcase its home decoration collections.

Simultaneously, alongside its strategic changes, La Redoute is also undergoing a digital transformation. The company intends to adopt an app-first model, introduce a social shopping channel in 2024, and enhance its IT tools. The Galeries Lafayette group, the parent company of La Redoute, is striving to ensure profitable, long-term, and sustainable growth amidst an increasingly intricate and competitive business environment. Currently, La Redoute caters to 8.8 million active users worldwide and generates approximately €1 billion in business volume.

Similar to many other pure players, La Redoute experienced significant growth during the pandemic. However, it is currently grappling with challenges as online sales start to dwindle. Nevertheless, the company has a remarkable history of overcoming obstacles. A decade ago, it faced substantial losses and almost filed for bankruptcy. Eventually, former top executives Nathalie Balla and Eric Courteille purchased it for a symbolic €1 and successfully relaunched the site. In 2017, Balla and Courteille sold a minority stake to the Galeries Lafayette group, which subsequently gained full control of La Redoute in spring 2022.

Useful links:
1. La Redoute
2. Galeries Lafayette