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Shopping Centers Today -> April 2003
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SELLING BOOKS AND MUCH MORE, FNAC GROWS
BY SUSAN THORNE
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| Besides its home base in France, FNAC has stores in Belgium, Brazil, Italy, Portugal, Spain and Switzerland, as well as Taiwan (above). |
Many people think of the large-format bookstore as a North American invention, because it has so transformed the sector on that continent. But before Barnes & Noble or Borders superstores, and long before Canada’s Chapters or Indigo, there was FNAC.
France’s leading purveyor of books and music, FNAC (Fédération National d’Achat des Cadres) is an unusual phenomenon — not least because it sells a lot more than books and music. FNAC stores also offer videos, computers, photographic equipment and film processing, sound systems and TVs, all under one roof. At some locations it also sells theater and concert tickets, and operates travel agencies. With 64 stores in France and 37 in other countries, this retailer is a much-desired tenant for malls and downtown sites alike.
FNAC was formed as a book-buying cooperative in 1954 by Parisian students who joined together to save money on their textbooks. Little did they anticipate that their efforts would mushroom into a publicly listed, international company with a wide range of products and services. FNAC was acquired in 1994 by the Pinault-Printemps-Redoute group, owner of the Printemps department store chain and other retail operations. The company also has significant interests in Gucci and Yves St. Laurent.
The company’s steady accumulation of product categories over a long period of time has given it a solid relationship with customers, said Eric Angiboust, FNAC’s director of development.
“There is magic around this concept,” he said. “It is very strong because the products go together well, and the combination makes FNAC a destination store.”
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Many customers visit a FNAC store initially for the books and music, but then go on to buy a higher-priced item like a TV or computer, he said. Given the continuing growth of the leisure market in Europe, Angiboust said he foresees rising demand for the kind of merchandise that his stores offer. FNAC’s sales have more than tripled in the past 10 years, to 3.35 billion euros ($3.6 billion) in 2001 (the latest available figures at press time). The retailer now claims to hold 26 percent of French music sales, 15 percent of book sales and 11.5 percent of the computer and software market. Stores range from 2,500 square meters (26,910 square feet) to 10,000 square meters and stock about 200,000 record titles and 300,000 book titles. Besides the wide selection, FNAC stresses low pricing, offering to refund the difference between a price paid at its stores and a lower price found elsewhere for the same item.
The merchandise selection and low pricing are important, but Angiboust says he regards the cultural environment at FNAC stores as the company’s real secret of success.
“We have lots of people in the company who are passionate about culture, and they give this added value to the customers,” he said. More than 10,000 book signings, classes, themed screenings and other events related to FNAC’s merchandise categories are scheduled yearly at gathering areas called “forums” inside most stores. The program of these events is also available online.
“What they do at FNAC that is absolutely brilliant is to help customers engage in a cultural experience,” said Christopher Wicker, chairman of the Paris-based Retail Consulting Group. “If you buy a book, there’s a good chance you could see the author speaking at one of the FNAC stores. They know that many people buying a camera want to take art-quality photos, so they have a space for photo exhibits. They’ve been doing this for 40 years, so they have real cultural credibility.”
In addition, said Wicker, FNAC was one of the first French retailers to recognize the importance of customer service, which it has emphasized since the early days. The company’s only significant competitor at present is Virgin, which has 14 stores in France, though a much narrower product offering.
FNAC’s combination of varied merchandise and services enables its stores to fill an anchor role at both downtown and regional shopping centers.
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| Besides books and music, FNAC sells videos, computers, photographic equipment, sound systems and televisions. It’s also a place to buy theater and concert tickets. |
“They are really a key tenant to sign up for a city center shopping center,” said Gontran Thuring, corporate leasing director at Paris-based development-management firm Ségécé, which has FNAC stores in 16 of its centers. Ségécé might anchor larger regional centers with FNAC, a large supermarket and a large-format fashion retailer like Zara or H&M, he said.
“FNAC is a great traffic generator and a very trendy brand, and they really target everybody, from kids to the elderly,” Thuring said, though he added that the retailer’s dominance leaves few alternative tenant choices for those merchandise sectors in which FNAC is active.
The company is currently expanding its smaller shop concepts in France, including FNAC Service photo processing outlets (152 of these), FNAC Junior (21 stores with games, CDs, educational toys and books for children 12 and younger) and three Surcouf computer stores. Outside France, FNAC has units in Belgium (six), Brazil (four), Italy (six), Portugal (seven), Spain (eight), Switzerland (four) and Taiwan (two).
Wicker observes that FNAC is Latin in character and seems to make the cross-border transition more successfully in southern Europe than northern; a Berlin store that opened in 1991 closed in 1995, for instance.
FNAC’s president, Jean-Paul Girard, has been quoted in company literature as being interested in such overseas markets as the United Kingdom, Japan and the United States. Angiboust, however, said that FNAC has no plans for North America. “We would have to be very cautious about that,” he said. “Our concept is very Latin and very European.”
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