In terms of Figure 9.6, what type of change did La Redoute undertake with its digital transformation?Founded in 1837, La Redoute has undergone at least two major transformations in its history. Originally it had been a simple wool manufacturer, but in 1928 it launched its first mail-order catalogue, focused on knitting. By the 1960s, La Redoute had become France’s leading mail-order catalogue, offering clothing, home-furnishing and related products.

Manufacturing became a relatively small part of the business.

At the beginning of the 1990s, La Redoute was acquired by the entrepreneur Francois Pinault, forming a major part of what became the fashion conglomerate Kering.

However, 1994 saw the birth of the first digital retail giant Amazon, which opened its French site in 2000. By comparison, La Redoute’s twice-yearly catalogues, each 1,300 pages long, were cumbersome and unable to adapt to rapid changes in fashion. The company lost €300m (£260m;

$340m) in the five years leading up to 2014.

In 2014, Kering sold 51 per cent of La Redoute to two senior managers, Nathalie Balla and Eric Courteille for one Euro.

The rest of the company was sold to 50 senior managers and employees (by 2017, two-thirds of employees were shareholders).

Kering also paid the €500m cost of a major redundancy programme involving 1,200 out of the 3,400 employees at the time.

Balla and Courteille embarked on a digital transformation programme that touched nearly every part of the organisation. One of their senior managers recalls: ‘It was above all a cultural shock. . . La Redoute was very old. It had undergone both the industrial revolution and the internet revolution. We were used to being under the protection of a large group. . . I like to say that we are not a start-up but a restart-up. . . ’. This meant a radical change in mentality.

La Redoute had actually launched its first internet site in 1994, but failed to follow through. The manager explained:

‘We were slow to go all in on the transformation. We had to understand that our old mail-order business was finished.’

La Redoute reduced its product range, focusing on women’s and children’s fashion, household linens and furniture. 80 per cent of the products would be own-brand, using the company’s own designs. The sport, toys, beauty and domestic appliance products that had been part of their own range now came from other suppliers through the marketplace part of their platform.

Instead of two fat catalogues per year, La Redoute switched to 10 or 11 shorter catalogues annually, refreshed each time. By 2018, 30 per cent of sales were via mobile phone rather than personal computer. Sourcing moved from India and China to Turkey and Morocco to improve responsiveness to changing demand. The warehouse was radically automated, with staff reduced from 2,500 to just 550. The time from receipt of order to despatch from the warehouse fell from 36 hours to two hours.

By 2018, La Redoute was on track to profitability. The retail conglomerate Galeries Lafayette purchased Balla and Courteille’s shares for an undisclosed but substantial sum. And Balla won the prestigious Veuve Cliquot prize of Frances’ Businesswoman of the Year.