Bloomberg News

Billionaire Taravella Bids to Add Online Retail to Mall Business

October 28, 2011

Oct. 28 (Bloomberg) -- No matter where French consumers shop, real estate billionaire Alain Taravella is seeking a piece of the action.

Taravella made a 100 million-euro ($141 million) offer for Internet retailer Rue du Commerce SA yesterday that would expand Altarea SCA, his Paris-based company, from owning malls into virtual shopping centers.

“The bet is to invest in a sector that’s doubling every five years and to gain a know-how of these new technologies,” Taravella, 63, said by telephone today. “The economic outlook is gloomy and we face the prospect of weak consumer spending, but we are sure that e-commerce will grow.”

French President Nicolas Sarkozy appeared on national television last night to announce 8 billion euros of additional budget cuts to support the country’s credit rating. He predicted the economy’s growth will slow to about 1 percent. Taravella’s bet is that while retail sales prospects are lackluster, Altarea can still make money from changes taking place in how and where people shop in France.

On average, French consumers spent 445 euros on online purchases last year, Forrester Research estimates. That’s 14 percent less than the average for the 17 European Union countries in the west of the continent. French online sales will probably rise to 20 billion euros in 2015 from 11 billion euros last year, the company predicted.

Sales Target

Rue du Commerce was France’s 13th most-visited retail website in the second quarter with 4.5 million visits a month, according to industry group Fevad. The company is expanding its product range from just electronics in a bid to double sales.

Altarea said today it will start its 9 euros-a-share offer for Rue du Commerce Dec. 16. The offer will run through Jan. 19. Altarea agreed to acquire about 29 percent of the company from its founders and buyout firm Apax Partners LLP.

Taravella said he would like Rue du Commerce to remain a publicly traded company.

“We want to keep the share listing,” Taravella said. The strategic move into online retail probably doesn’t mean it will start investing in warehousing and logistics centers, he said. “I would rather stay in online retailing itself because the margins are higher.”

Taravella owns 49 percent of Altarea, a holding valued at about 640 million euros. His stake and dividends received make his personal fortune more than $1 billion, according to data compiled by Bloomberg.

The move into online retailing will help Altarea diversify further from developing city-center shopping malls or big box retail warehouses. In 2007, Taravella acquired Cogedim to expand into residential and office development and the company has now raised a 600 million-euro fund to buy and refurbish offices.

“We are looking at a certain number of opportunities,” Taravella said. The fund will probably start investing the money next year or in 2013.

--Editors: Jeff St.Onge, Andrew Blackman.

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.


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