From Au Bon Marché to Galeria Inno : rise and fall of the department store in Belgium

Halfway through the nineteenth century, the first department stores caused a major revolution in the Belgian retail market. The pioneers initially experienced an unprecedented boom, but ultimately had no answer to the rise of hypermarkets and category killers in the 1960s. The biggest players sought refuge in a mega-merger. Today, one chain remains, with 16 stores: Galeria Inno, in German hands.

Unprecedented modernization

In Belgium, too, the rise of the department store is a fascinating story, with pioneers such as Maurice Cauwe (Grand Bazar of Antwerp), François Thiéry (Grands Magasins de la Bourse), Emile Bernheim (A l’Innovation), Auguste Tiriard (Galeries Anspach) and last but not least François Vaxelaire (Au Bon Marché). A number of these founders came over from France. At the time, the successful Parisian department stores were regarded as a shining example of an unprecedented modernization of the shop environment. Scaling up made it possible to offer an enormously varied range of products at unbeatable prices, which hit the traditional retail trade hard. But even the department stores were not immune to change in the long run…

We reconstruct this fascinating history with the help of three key witnesses: Raymond baron Vaxelaire, former general manager of Inno and great-grandson of Francois Vaxelaire, the founder of Le Bon Marché, the first department store in Belgium; Emile Leemans, former purchasing director of Inno and general manager of P&C; and Claude Richez, former sales director of Inno and for years top manager at GIB Group.

The forerunner: Le Bon Marché

The seeds of the retail revolution are to be found in the rue Neuve, in the growing capital of Brussels, where the French entrepreneur Jean-Nicolas Thiéry opens a ready-to-wear and fabric shop in 1845 with the name ‘Au Bon Marché’, a very common name for a shop at the time. The store is not yet a department store until the owner leaves the management to the ambitious Alsatian Francois Vaxelaire (1840-1921), who is twenty years old. He decides to marry Jeanne-Josèphe Claes, who was the first saleswoman and cashier in the business. This turns out to be a golden move in many ways.

“It was clever,” says Raymond Vaxelaire. “A true merchant is usually not a good financier, and vice versa. But if you put a good commercial and a good financier together…” The shop is renamed ‘Au Bon Marché Vaxelaire-Claes’. The couple comes up with a concept that did not exist until then: a shop with clearly displayed prices and goods, where there was no obligation to buy anything and where there was no need to negotiate the prices. At the ‘Bon Marché’ you are indeed guaranteed to get the best prices.

The formula is a success. Around the turn of the century, the couple had already developed the shop into a fully-fledged department store chain with branches in cities such as Lille, Charleroi, Nancy, Besançon, Epinal, Metz, Antwerp and Bruges. It becomes a real family business, developed by the sons Raymond and Georges and by daughter Raymonde, who will marry Count Yves du Monceau de Bergendael. Thus the Bon Marché becomes completely noble.

The French branches are sold, the Brussels branch near the Botanical Garden grows year after year into a real shopping palace of 23,000 square meters, with on top of that more than 10,000 square meters of ateliers and warehouses. Au Bon Marché scores with large-scale promotional campaigns, ‘crazy days’, sales, theme weeks and, of course, exuberantly decorated shop windows as eye-catchers and crowd-pullers. At its peak, the company even opens stores in Congo.

But the world does not stand still. During the interbellum we see the emergence of a new type of competitor: the shops with unit prices or ‘magasins à prix uniques’, following the American example of the ‘five-cent stores’. The best-known example is Sarma (Société Anonyme pour la Revente d’articles de Masse), founded in 1928 by Jean-Baptiste Van Ghijsel de Meise (1885-1956). Raymond Vaxelaire reacts quickly with the creation of the SA Belge des Magasins Prisunic-Uniprix (Single Prices), which opens several branches in Brussels, Liège and Leuven. The Rue Neuve becomes the battlefield of a real price war, when both Sarma and Prisunic open branches there. Moreover, a bit later a third dog comes to play the game of skittles…

The visionary: Grand Bazar of Antwerp

On the Groenplaats in Antwerp, where today the Hilton hotel is located, the Grand Bazar is launched in 1882, founded by the Parisian Adolphe Kileman, but brought into blossom by visionary Maurice Cauwe (1905 – 1985), a commercial engineer from Solvay, appointed in 1932. He lays the foundations for a revolution in the Belgian distribution world, which will eventually lead to the retail giant GIB Group.

Initially, he limits his expansion to Flanders, due to an agreement with Galeries Anspach in Brussels and Grand Bazar de la Place Saint Lambert in Liège. Subsidiaries open in Merksem, Sint Niklaas, Turnhout, Kortrijk… Maurice Cauwe moves to the United States for the first time in 1948. There he discovers supermarkets and superstores, gigantic self-service shops. A new revolution is taking place in retail. In 1959, Cauwe opens his first supermarket in Antwerp, the largest in Belgium with 1,450 square metres. It was the start of the GB chain. Delhaize had already opened its first (much smaller) self-service supermarket on Flagey Square in Brussels in 1957.

In 1961, Cauwe also opens the very first hypermarket on the European continent, in the municipality of Auderghem in Brussels. Super Bazar is the name. Today, a Carrefour Hyper is still located at the same location. The concept of the large, peripheral ‘all under one roof’ department stores with large car parks can begin the conquest of Europe. The strength of the concept is reinforced by the establishment of additional retail concepts on the same site: a petrol station, car garage, restaurants, a do-it-yourself shop, garden centre…

The commercial genius: A l’Innovation

A L’Innovation is the last of the three large department stores to open its doors in 1897, also on the rue Neuve in Brussels. The newcomer establishes himself right next to the beautiful Au Bon Marché, which has been developed by the Vaxelaire family for almost 50 years into a real fashion temple.

A L’Innovation is an initiative of the Meyer and Bernheim families, French Jews who, because of anti-Semitism (the Dreyfus affair), moved to Brussels, which was the European fashion city at the time, next to Paris. The new department store, initially still called “Bernheim & Frères”, distinguishes itself by its low-cost policy. It soon becomes a success and branches appear in Liège, Verviers, Brussels Chaussée d’Ixelles, Ghent, Charleroi and Antwerp.

The son Emile Bernheim starts working at Innovation in 1901 at the age of 16 and becomes famous in 1910 when, together with his cousin Sam Meyer, he manages to get major fashion brands on the shelves. Like Maurice Cauwe, Bernheim often travels to the USA in search of inspiration. He doesn’t shy away from any risk and, for example, does everything in his power to buy his rival Grands Magasins Léonhard Tietz.

Bernheim will stay with Inno for many years to come. In 1928 he founds the IADS, the “International Association of Department Stores” which still exists in Paris. Two years later, in 1933, he founds the department store Priba (the name refers to prix bas, low prices). A price fighter and direct competitor of Sarma and Prisunic, who settles in the rue Neuve…

The turning point: the fire

Fierce competition forces Bernheim and Vaxelaire to merge a year later. The joint subsidiary Uniprix-Priba is founded in 1932. A rapprochement that is only the forerunner of what is yet to come. For a terrible event accelerates the consolidation in the sector: especially the dramatic fire in Inno Rue Neuve in 1967, with 251 deaths! (see box)

It is a particularly moving human drama. In addition, the fire also has economic consequences. The loss of its most important subsidiary – and also a number of failed international projects – puts Innovation in financial trouble. In 1969 the company is merged with Au Bon Marché and the Inno-BM company is created. A few years later a new merger with Grand Bazar follows. In 1974, the three department store pioneers together form the company GB-Inno-BM, which is later renamed GIB Group. Department stores are no longer the most important part of this retail holding company. After all, the retail world has changed radically. Super- and hypermarkets are the dominant formats, later supplemented by DIY stores (Brico) and restaurants (Quick, Lunch Garden), among others. The beginning of a true retail empire that will grow into Belgium’s largest private employer.

The department stores have only a minor role to play in this new group. After all, shopping centres are the new department stores. GIB Group soon decides to close Bon Marché and a large number of Grand Bazars, and to continue the remaining department stores under one name: Innovation. The retailer establishes a strong reputation with the lowest prices and a ‘buy Belgian’ philosophy.

A successful change of course

The fact that Inno succeeds in reinventing itself in the difficult eighties and nineties is largely due to Raymond Vaxelaire, who takes over the chairmanship of the department stores in 1988. Before that, he had gained experience on the American market, at Sears, and later also at Vroom and Dreesman in the Netherlands. “I had understood that people no longer come to the city to buy products that you only buy twice in your life. Furniture, lighting and household electronics were still important departments in the department store at the time, but sales declined. We had to give more space to ranges that are constantly changing: perfumery, textiles, lingerie, toys, books. People want to see something new every time.”

One of the evolutions he had noticed was how lingerie evolved from a purely functional product into a real fashion item. “When I took over the department stores, I decided to move the lingerie department to the ground floor and expand it to 1000 square metres. They said I was crazy! But it worked! Inno was saved by the lingerie. And by the perfumery, where we introduced self-service. On 20% less surface area, we generated 17% more turnover. Everyone came to look at it.”

Emile Leemans and Claude Richez play a key role in this period, together with the late Roger Lommel, the amiable CEO of Inno at the time. A golden trio: Leemans the strategist, Richez the operational warlord, Lommel the connecting human manager. Three ‘hidden leaders’. Between 3 January 1996 and 21 June 2001, Inno’s (own) workforce is reduced by 800 people, while turnover and margin increase. Nevertheless, additional staff are added. Leemans installs consignment and concession models (with staff from suppliers) in a clever system of shop-in-the-shops, for a limited but important number of departments: home, perfumery, men, women, children… Large fashion brands such as Benetton, Inwear/Matinique, Esprit, Mexx and Mayerline in Belgium start their expansion there before they set up their own shop network. Richez and Leemans play a key role in the implementation of these models within the Inno company, which is heavily dependent on the trade unions. Turnover and profitability per square metre increase significantly. Inno is experiencing some good years again, which is arousing interest from abroad.

In foreign hands

But the realm of GIB Group won’t last. After a period of true glory in the 1970s and 1980s, the holding company is losing its feathers. Domestic and foreign competitors come to steal market share. The company is carrying heavy personnel costs and is not agile enough to respond to a changing retail environment. The shareholders decide to dismantle the company and sell the parts one by one. Raymond Vaxelaire sells Inno in 2001 to the German department store chain Kaufhof, which is then part of the Metro Group. He remains on board as Chief Integration Officer and fights for the identity and survival of the chain, in this new constellation. In 2004 Inno is renamed Galeria Inno and in 2006 Baron Vaxelaire retires.

Inno then changes hands a few times. Metro sells Kaufhof (including Inno) in 2015 to the Canadian Hudson’s Bay Company, which also enters the Dutch market after the bankruptcy of V&D. However, it is no a success: the group is forced to transfer its European activities to a joint venture with archrival Karstadt, which is owned by Signa Holding, the investment vehicle of the Austrian entrepreneur René Benko. The long-term consequences of this mega-merger are unclear today. Despite the succession of different owners, Inno manages to retain its individuality. To date, it has been a profitable part of the group, but the retailer, with its limited scale of 16 stores, is not the main priority for the investor. Despite a wonderful history that began in the 19th century, we no longer have an independent Belgian department store today and the future looks rather uncertain.

“No one is better than a woman to run a department store”

Raymond baron Vaxelaire managed the Inno department stores for 17 years and also gained extensive international experience in the sector. Does he believe that department stores still have a future? “I don’t think department stores are dead, but a lot is changing with the rise of e-commerce and the rejuvenation of the public. They need to be more accessible and more inviting. In every city today you can see quality fast food chains that are innovative, such as Le Pain Quotidien, Exki, Pistolet… These are places where people like to come and meet each other. Our department stores have not met the needs of the public in the city. There are hardly any places in the entire Rue Neuve where young people want to meet up. That’s a loss.”

He refers to the Samsung flagship store on the Champs Elysées. “You can experience new technology, such as virtual reality. That is where young people do come to. Or look at the Galeries Lafayette, which brings together brands on the ground floor that attract young people.”

He remembers very well what attracted him in the department store when he was young himself. “When I was twelve or thirteen years old, I liked going to the record department of Le Bon Marché. There was a long counter with record players where you could listen to the latest records. That department always attracted a lot of people. I wanted to become an architect and I had drawn a record store the way I thought it should look. I showed it to my father – a charismatic man – but of course my proposal fell on deaf ears. He had just hired the architect Pagani, decorator of the Riva boats, to redesign the shoe department. That made a big impression on me.”

His favourite department store. “Certainly De Bijenkorf, in the eighties. A department store on a human scale that invested in an exceptionally new image. It was the first time that I saw how they managed to put brands forward, in a refreshing way, each time with something of their own: a private label ‘De Bij’ that corresponded nicely to their image. They had understood things correctly.”

The takeover of Inno by Kaufhof brought with it a small culture shock. “The new owner wanted to remodel the fashion department the German way, with a large men’s department and a strong emphasis on private labels. I said: that’s not going to work, we have 90% female customers, and our customers are buying brands. But they stuck to their guns. So I suggested to them that the shop in Mechelen – which we had to rebuild in order to remove asbestos from it – should be designed entirely according to their concept. The customer would decide. That soon turned out to be the case. The German toys did not sell. After all, the police cars here are not green. The German shoes with their wide round tips did not work. Only the perfumery department was a success. After six months they had to admit that they didn’t understand the Belgians…”

Another thing: “The Germans didn’t have a single woman as store manager. We had eleven. No one is better than a woman to run shops. I was proud of that. In our family, too, women have always been of paramount importance. That had already started with Madame Claes.”

Today, Baron Vaxelaire focuses on the Emile Bernheim Foundation, which spends 2 million euros a year. He also works in the organic sector: an organic farm with about one hundred Limousin cattle, 150 hectares of farmland where old wheat and spelt varieties are cultivated, 5 stone mills in Buzin that produce 800 to 900 tons of organic flour per year. And a baker’s workshop that sells some 4,000 loaves of bread a day, at organic chain Färm and other smaller shops.

“There’s a lack of real innovation”

“If you look at Inno today, you see very little difference with the Inno we sold in 2001. There is a lack of real innovation. That’s deadly”, says Emile Leemans. The merger between Inno and BM, after the fire, was not without problems. Both companies had very different cultures.

“Le Bon Marché was still 19th-century, very promotional-driven. Inno, on the other hand, was top level.” Leemans and Richez remember Emile Bernheim as a special man, a commercial visionary. “He made Inno. He was the first retailer to recruit managers with a university degree, from the ULB. This was unseen at the time. Maurice Cauwe was also a visionary. He spent four to six weeks a year in the United States. He invented the hypermarket and translated inspiration from the US to Belgium. That was his great merit. Among other things, he went to NCR and got his ideas there.”

“I had a lot of respect for Francois Vaxelaire and Maurice Cauwe. And because I remodelled shops for little or no money, I also got respect back”, laughs Leemans. “Pierre Bolle was also a key figure: a protégé of Bernheim who gradually took over power at Inno, long before the fire. He wanted to ‘clean up’ the management team and gave opportunities to young people. He positioned the department store higher up in the market.”

Disastrous fire

We’re writing May 22, 1967. The Innovation building on the rue Neuve in Brussels is struck by the biggest and most terrible fire ever to hit Belgium: 251 dead (not all bodies were recovered) and 62 injured. The department store is a maze from which it is difficult for customers to escape. Subsequently, measures are taken throughout Europe to improve fire safety in department stores. The cause of the disaster has never been disclosed, although there is no shortage of theories.

Claude Richez was an eyewitness to the disastrous fire in 1967 and is still talking emotionally about this historic tragedy. He was responsible for the preparation of the funeral. That took three days and three nights. An impressive ecumenical service followed on 30 May in the basilica of Koekelberg, where the king was also present. In the cemetery of Evere there is still an annual commemoration.

by Erik Van Heuven and Stefan Van Rompaey

– photo: RetailDetail –