Born in Calvados in 1856, Auguste Fauchon moved to Paris in 1880, where he began to work as a street vendor, moving on to become a wine and spirits merchant. In 1886, at the age of 30, he opened a fine foods outlet on Place de la Madeleine in central Paris’s 8th arrondissement. This first shop still exists, and was totally renovated over a century of expansion and transformation.
The quality of the products made by Fauchon and its numerous approved suppliers quickly made it well-known internationally,and it came to symbolise French luxury gourmet lifestyle. In 1968, French radicals chose to raid Fauchon and distribute foie gras to the poor. During the Second World War, restrictions and rationing made business difficult for the company. Auguste Fauchon died in 1945 and his children sold the company in 1952.
In 1952, Joseph Pilosoff, the former owner of “Chocolat Poulain”, “Ciseaux d’argent” in Saint-Cloud and “Aux 100000 chemises” in Paris, took over Fauchon and built up a partnership with Air France. He also expanded the name abroad, opening new Fauchon outlets including in Japan at Takashimaya department stores in 1972. When Joseph Pilosoff died in 1981, his daughter took over at the head of the company. However, she too died soon thereafter, in December 1985, in a fire on the company premises.
In 1986, Joseph Pilosoff’s granddaughter, Martine, and her husband, Philippe Prémat, became the owners of Fauchon. Martine Prémat’s management proved difficult. Turnover had been flat since the beginning of the decade at around 250 million French francs (some €38 million), with losses of FF5 million in 1991, FF4.7 million in 1993 and FF11.9 million in 1996, and debt standing at FF73 million (€11 million) and a negative net equity of FF4.9 million.
Despite attempts to expand the group in the 1990s by opening shops in Geneva and Saudi Arabia – only to close them a few years later – or by sponsoring the Paris Dakar rally, Martine Prémat finally sold the company to Laurent Adamowicz for FF240 million (€36.6 million) in March 1998, including the freehold of the buildings on Place de la Madeleine, sold the following year.
Laurent Adamowicz, a former investment banker and business school graduate with experience in the field of luxury products, positioned the brand on the gourmet foods market. He launched new products and ad campaigns, renovated points of sale, withdrew the brand from mass-market outlets and renovated the historical Tea Salon on Place de la Madeleine. He started a new partnership with Air France, and promoted young pastry chefs, like Pierre Hermé, Sébastien Godard, Christophe Adam, Dominique Ansel.
In 2000, Fauchon became a growing and profitable company again, with 90 million Euros ($135 million) in sales and 5 million ($7.5 million) in EBIT for 2002.Fauchon opened new franchised stores in Japan, in South Korea, Taiwan, the Middle East, Europe, and finally in the United State where it never had a store before, investing FF60 million (€9.2 million) in five years in the US market, with a diversified investor group that included Michel Deroy and Jean-Francois Toulouse, former owners and managers of Dock de France supermarkets, the investment fund Matignon Investissements et Gestion, the publicly listed UK fund Intermediate Capital Group, and Barclays Capital Development France. Barclays Private Equity France, a subsidiary of the Barclays plc Group, backed Laurent Adamowicz in his takeover of Fauchon to participate in its development in France and abroad
In France, the acquisition of Flo Prestige delicatessens for €39 million increased the number of outlets in Paris by 12 stores. In 2003, the Fauchon network included 650 franchises, with 16 of its own shops, three in New York and 13 in Paris.
The acquisition of the Flo outlets in Paris in 2002 and the opening of three shops in New York led to a sharp rise in income between 1998 and 2004, but a decline in Fauchon’s net profits. In the spring and summer of 2003, Fauchon, heavily in debt, was affected by the collapse of the tourism market with the combination of several events: the Iraq War and the fall of the Saddam Hussein regime in April 2003, followed in May 2003 with the severe acute respiratory syndrome (SARS) virus epidemic, and then the unprecedented heat wave in Europe that hit France particularly hard with over 15,000 dead in August 2003.
In January 2004, Laurent Adamowicz sold his interest in the company and left his CEO’s office to Michel Ducros, one of the sons of Gilbert Ducros (1928–2007), the founder of the Ducros spice business.
From 2004 onwards, Michel Ducros bought out most of the other shareholders, private and institutional, and will acquire between 2005 and 2009 all of the shares held by the Barclays Group, the 36% stake owned by La Compagnie du Bois sauvage, the stake held by Matignon Investissement & Gestion, and lastly the minority shareholdings. “I am an entrepreneur, I invest in the long term,” he explained.
In 2004, the new shareholders adopted a strategy that aimed to boost profits by selling off those assets they deemed to be non-strategic, closing stores in Russia and the United States, selling their ready-prepared meal tray business to the Fleury Michon group, and finally selling the Fauchon Paris stores to the company’s rival Lenôtre. The following 6 years, Fauchon cut back its workforce by 700 employees, from 900 to 200 people.
Michel Ducros revised Fauchon strategy with all its suppliers and set up a strict sourcing, to promote the French savoir-faire and develop exclusive receipts. Fauchon continues to produce most of its own breads, cakes, pastries and delicatessen products on its premises (in the Paris suburb of Courbevoie for cakes and pastries).
In 2013, after the departure of the CEO Isabelle Capron, Michel Ducros appointed Eric Vincent as CEO, which announced ambitious plans for the company, aiming to have 100 outlets by 2017 (from 63 in 2013), mostly in franchises.
Despite the lack of success in the United States and China in 2009 and major headwinds from rival Ladurée, Fauchon still aimed at international development on several big markets (Japan, Middle East, Asia and South America). Fauchon had some 60 stores and restaurants around the world in 2013. Fauchon reinforced its presence through Asia in Hong Kong in 2014 and Thailand and invested in North America, and the Middle East, where new openings are concentrated.
On the verge of bankruptcy in 2004 (with losses of €30 million), Fauchon made its way back to a smaller loss in 2009, and in 2013 posted an operating profit of €900,000 on sales of €50 million. Fauchon employs 270 people in 2016, operates 76 retail outlets and posts sales revenue of €180 million (including sales by franchises), 80% of which on international markets.
Important luxury gourmet / patisserie companies such as Pierre Herme gradually became a major competitor, with stand-alone stores in Paris but also abroad. Pierre Herme’s headwinds also came through the partnerships with major luxury fashion maisons such as Dior, Pierre Herme operating the first Dior Cafe in Seoul. Armani Hotels (Dubai, Milan) and Bvlgari Hotels & Resorts expanded their chocolaterie and patisserie offerings, with dedicated corners / spaces within the respective hotels.
Major international luxury fashion companies such as Prada acquired Pasticceria Marchesi (a storied patisserie founded in Milan) while luxury giant LVMH acquired, developed and expanded globally the heritage Italian pastry shop of COVA. Belgian chocolate Godiva has been diversifying beyond chocolate into sweets, patisserie, even foods with two Godiva Cafes recently opened in New York City.
In September 2015, Fauchon adopted a new strategy and began developing a luxury hospitality branch. In March 2018, the company launched Fauchon Hospitality to develop a network of luxury boutique hotels around the world, with a focus on Japan, Europe and the Middle East. Fauchon Hospitality is headed by Jacques-Olivier Chauvin, previously CEO of Relais & Châteaux and SVP of Van Cleef & Arpels. Samy Vischel, president of Fauchon, is vice president of Fauchon Hospitality. Bernard Lambert is the international business advisor of the project; he was the president of the SBM and the Méridien company.
Fauchon partnered with the upscale hotel group Esprit de France, a subsidiary of Compagnie Lebon, to create and co-manage the first Fauchon L’Hôtel on the Place de la Madeleine in Paris in a building acquired by Qatar National Bank. It opened 1 September 2018. The five-star hotel is affiliated with Leading Hotels of the World and is positioned by Fauchon as a luxury gourmet hotel.
Richard Martinet (Affine Design) is the interior designer, assisted by the Atelier Paluel Marmont. The hotel is managed by Jérôme Montantème. It presents a hotel concept created by Emmanuelle Mordacq, president of the agency NeoPlaces agency: the GLAM hotel: a Gourmet hotel (creative Parisian pastry associated with French culinary tradition), Located in the center of Paris (Place de la Madeleine, where Fauchon was created 130 years ago), offering personalized arty attentions and experiences, always in line with women “Mesdames” (sophisticated lighting, appropriately sized bathrobes, Carita toiletries and spa, etc.).
French references are predominant in the entire concept, from French CARITA bathroom amenities as well as the main brand of the Spa, bed linen, towels to furniture piece references such as a tall custom made mini-bar in a striking purple colour scheme. The mini-bar which was created by French luxury furniture brand Roche Bobois. The mini-bar is not only a visual entertainment but it also provides a glimpse into the universe of Fauchon –
Luxury hospitality innovative touches include the fact that guests check-in within the premises of a cozy Library Lounge for added luxury and privacy, but also the fact that there is a natural light glass enclosed lounge used upon request for events or afternoon tea. Part of the Sunday brunch (probably the best at any luxury hotel in Paris) is on display in this lounge as well as in the Cafe, the beating heart of the hotel. What is most impressive is the great mix of guests, almost equally local patrons but also hotel guests.
The hotel was impeccably conceived in keeping with the luxury gourmet lifestyle it is seeking to achieve, with an coherent interior design aesthetic, without any overt references at ‘sweets’. Beyond the immense heritage of the Fauchon Group, the Fauchon has been imagined as a luxury boutique hotel of the highest international standards.
However, despite the more or less challenging recent times for Fauchon, the newly developed hotel has fast built a confident and effortless approach to positioning, without the need to ‘prove itself’ or ‘live up to expectations’, maybe even vice-versa. Validation from local patrons and foreign travellers (US, UK and Japan) came almost instantly.
The key to the success of the positioning of the hotel in any other foreign market will heavily depend on the integration of ‘Made in France / French’ – from foods to aesthetics (interior design), the measurement of success being the level of desirability and high service standards. The collaboration with Roche Bobois should be extended beyond just one or two pieces of furniture – for Roche Bobois, FAUCHON L HOTEL would be an exceptional awareness and exposure p
The hotel was build by PLENDI, the luxury construction division of giant Vinci, which specialises in luxury hotels – Shangri-La Paris. Bulgari Hotel Paris or Mandarin Oriental Paris, was also entrusted the construction works of Fauchon l’Hotel, with the finest details, materials and finishes.
I would even argue that with a sensible strategic approach to Human Resources thus ensuring the highest possible service standards, the entire Fauchon Group could greatly benefit from successful diversification / expansion into the luxury hotels. Concepts such the Tea Salon / Boutique which recently opened on the ground-floor of the hotel, with an immense selection of fresh teas and infusios, most of them organic. Customers can make personalised selection and mixes, with personalisation – from name to ingredients.
The international business expansion of FAUCHON L’HOTEL will also depend on ensuring the ‘know how’ of the Fauchon Ateliers in Paris, with an army of ‘patissiers’ (Pastry Chefs) most of them very young yet already holding the title of Meilleur Ouvrier de France the highest recognition of professional skills. The exceptional training and educational expertise of Fauchon is a unique competitive advantages, especially that certain ‘metiers’ are on the verge of extinction.
For the mid-term, the best business model is not necessarily creating a stand-alone hotel location but a hotel-within-hotel, for example an entire floor within a larger luxury hotel could be re-created as a Fauchon Hotel.
Oliver Petcu in Paris
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