Businesses

2008 ACTIVITIES

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Lagardère Services has long been recognized for leading positions in all its business segments, rigorous operating standards, tradition of excellence and international brands. Over the past year, the Group sought development in three main areas: retail outlets for travellers and neighbourhood convenience stores offering various products and services, plus press distribution to retail outlets.

Significant events in 2008

Retail sales

In 2008, Lagardère Services built on its retail presence in train stations and airports in 20 countries worldwide by opening a string of new retail outlets in Germany, Poland, the Czech Republic, Romania, the United States, Australia, China and elsewhere. It also took advantage of these store openings to test new marketing concepts and renew various concession contracts in transportation hubs.

Thanks to its Relay chain, Lagardère Services now operates the top international network of press outlets, which offer a growing number of travellers an extensive range of products – including newspapers, magazines, books, candy, souvenirs and food products – selected to make their travel experience more enjoyable. With a presence in over 100 international airports, Lagardère Services also sells such duty-free goods as wines and spirits, tobacco products, perfumes, gourmet foods and fashion items in France, Great Britain and Poland through Aelia, the leading French airport retailer. Beyond such franchise outlets as Virgin and Hermès, Aelia has a portfolio of its own retail trade names, including Pure & Rare, Beauty Unlimited, French Days, The Gourmet Shop and Cosmopole. Aelia also operates an in-flight sales service for airlines (Air France in particular).

In keeping with its strategy of transportation-hub development, Lagardère Services has kept a 19.8% stake in the Virgin group, with the balance sold at year-end 2007, and has retained its worldwide brand-licensing rights for transportation hubs as well. As a result, Lagardère Services also operates various Virgin-branded stores specializing in music, books, magazines and small electronics in train stations and airports in France, Australia, China, Germany and the United States.

In addition, the Découvrir chain in France, in America and Australia offers tourists products that focus on regional attractions and locales.

In many Western and Central European countries, Lagardère Services is developing the convenience-store concept under several trade names and aims to give consumers the widest possible range of products and services. The Inmedio chain, for example, which now operates in Hungary, Poland, the Czech Republic and Romania, offers a generous selection of magazines, books and “impulse-buy” products. This is also the case with Belgium’s Press Shop , as well as Switzerland’s Naville and well-known Payot Libraire bookshop chain.

In 2008, Lagardère Services launched a plan to diversify its retail sales activities by expanding into such segments as fast food, coffee shops and specialized concepts. Thanks to broad expertise acquired in many different markets, Lagardère Services has established partnerships with such major retailers as Paul, Moa, Costa, Bijoux Terner and L’Occitane.

With more than two-thirds of its total sales devoted to retailing, Lagardère Services is a major player in this business sector. In 2008, Lagardère Services also continued developing the magazine-download platform operated by HDS Digital, which racked up 1.8 million downloads during the financial year.

Press distribution, wholesaling and import-export activities

Supplying retail outlets with newspapers and magazines is an indispensable function of the retail press business.

In a market that varies widely from country to country, Lagardère Services’ subsidiaries concluded new press-distribution contracts in Europe and North America, thus reinforcing their unique expertise as specialized distributors of communication products.

Lagardère Services performs this function in 12 countries, where it operates at two levels:

• As a world leader in the distribution of national periodicals, Lagardère Services is the No. 1 distributor in the United States, French-speaking Switzerland, Spain and Hungary, with operations in Poland as well. In many countries, Lagardère Services supplies convenience-store chains: Hungary’s Lapker has 12,200 retail outlets (including 743 wholly-owned stores) while Spain’s SGEL has 16,000. The leading national magazine distributor in North America with 32% market share, Curtis Circulation Company operates a network of independent wholesalers and manages sales of the magazines it represents to North America’s largest retail chains. In Spain, SGELis the top national distributor of periodicals with 20% market share, and Lagardère Services has no signifi cant competition in Hungary, Belgium or Switzerland.
• Lagardère Services is also a leading distributor of imported international publications in 10 countries (Belgium, Bulgaria, Canada, Spain, the United States, Hungary, the Czech Republic, Romania, Serbia-Montenegro and Switzerland)