In a landmark move, DFS officially announced in 2014 that it would be opening an ‘unconventional’, multifunctional, department store on Venice’s Grand Canal, operating in the second largest historical building in the city; the Fondaco dei Tedeschi. After two years in the making DFS tells TRBusiness it expects to open the new store on 1 October, with promotional activities taking place in September.

 

DFS Group CEO, Philippe Schaus has been close to the project from the start and is excited to see all the components come together when the store opens later this year. “It’s so important that we have a sense of location or destination in Venice,” he told TRBusiness in May.

 

“We wanted to have a greater representation of Italian brands because we know [from our research] that Asian tourists are four times more likely to buy an Italian brand in Italy and a French brand in France, etc, than where they live.

 

 

“I find it surprising, in a way, that it’s that strong, but factoring this in, we wanted to make sure we had the best possible selection of Italian brands in that building, as we will hopefully when we do a project in Paris to have the best mix of French products. It’s the same idea.”

 

Schaus confirmed that DFS is now looking at a second European location opening in France – during his presentation at the TFWA Asia Pacific conference – which he said is ‘under construction’, although he didn’t want to be drawn into this subject any further.

 

NEGOTIATIONS WITH BRANDS

Schaus previously told TRBusiness that the retailer’s conversations with major international and Italian brands in Venice were not so straight forward at the beginning of the project – as many have flagship stores elsewhere in Venice and presumably wanted to ensure that there was no danger of sales cannibalisation.

 

However, in the end Schaus told TRBusiness that the retailer was able to recruit all of the brands that it wanted.

 

“We got all the brands we wanted. I think yes, on the fashion side almost all the brands, have some form of flagship store in Venice, but not in that part of the city [close to the Fondaco dei Tedeschi] but closer to the Piazza San Marco. Of course brands did recognise, or were convinced by the fact that it’s just a different approach.”

 

 

According to Schaus, Venice receives 20 million visitors a year: “Of these 20m a small fraction visit these fashion boutiques today, so if that fraction can become bigger thanks to what we’re doing, then that becomes really interesting.

 

EXCLUSIVE PRODUCTS

“The other thing also, which is very interesting, is that a growing number of brands are now ready to develop special products for us, for the opening so that’s very, very nice.”

 

As is clear from the list of brands he mentions (Tiffany, Bottega Veneta, Gucci etc), the Venice store will fall in line with the company’s luxury retailing strategy; something that was called into question during Schaus’ presentation in Singapore in May.

 

When he was asked at the TFWA AP conference (in a Q&A with moderator John Rimmer) whether the focus on high-end brands and products was wise in the current economic climate, Schaus said that the retailer does actually stock products across a range of prices. However, he also said that if you can sell luxury you should, as ‘all parties can profit from sales of this nature’.

 

“At another conference, I don’t know if you were there, I made this provocative example of this one bottle of Dalmore whisky, which was sold at a price equivalent to ten thousand bottles of an entry price whisky, so you just see the magnitude of it,” Schaus said to TRBusiness in May.

 

 

“If you don’t have that [luxury] customer, don’t bother, do something else and like I said, we are at airports like Abu Dhabi where we have a dedicated shop for migrant travellers where we offer all the super accessible products. And on the other side, when I go to Hong Kong International Airport [where I am regularly] there’s always people around these super expensive bottles just looking at them.”

 

RETAIL THEATRE

Schaus admitted that many will not actually purchase these very expensive items, but the value isn’t just in the sale. He argued that these very rare products add to the retail theatre that DFS feels obliged to deliver.

 

“Most of them will never buy a bottle like that, but they just want to look, because where else can you see these kinds of products? I mean you don’t see them in the supermarket do you?”

 

Schaus said that there is no better place to see such products than at the company’s high profile Masters events. “We have 3- 5,000 people coming to these events so there is an appetite there, in spite of anti-corruption.”

 

What has changed, however, is the customer is no longer buying gifts for somebody else, says Schaus and this is why the product mix has had to change at many DFS stores. “We are really focusing on whiskies, single malts and all that, which are connoisseur products and not necessarily gifting products.”

 

Read the July issue to see a longer interview with Philippe Schaus, including details of the new Siem Reap store in Cambodia.