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Galeries Lafayette and IBM Forge Strategic Alliance

Building Market-Leading Solutions for the Retail Industry; Largest outsourcing contract signed in France

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PARIS, France - 07 Jul 1999: ... Galeries Lafayette and IBM have announced a strategic alliance encompassing leading-edge e-business information technology solutions for the retail industry. The alliance reflects Galeries Lafayette's commitment to leveraging the power of information technology to drive its business represented by LaSer, its services and technology division. It is built on a the complementary strengths of the two companies : the vision of the future of retailing from Galeries Lafayette and LaSer, and the technology expertise and knowledge of IBM.

"The retail industry is in the middle of a period of profound change as new technologies impact consumer habits and the entire supply chain," said Philippe Lemoine, co-CEO of Galeries Lafayette. "As a market leader, it is important Galeries Lafayette stay at the forefront of innovation in the industry."

The underlying 15 year agreement has two parts : the development of retail services offerings in six areas as well as a Strategic Outsourcing contract worth 1.1 billion euros (US $1.2 billion). This is the largest outsourcing contract ever signed in France.

Innovative Offering for Retail Sector
Mag Info, the services subsidiary of LaSer, is at the core of the strategic alliance. IBM Global Services will work with Mag Info to develop and market services offerings for the retail sector using IBM methodologies and tools.

Mag-Info-LaSer Informatique, a newly created company, will focus on six strategic areas:

-- A range of seamless sales floor solutions, down to point-of-sale system outsourcing

-- International promotion of dedicated retail software suites, including the Mag 50 point-of-sale software package

-- Enterprise Resource Planning (ERP) consulting and integration services for retail companies.

-- Information technology outsourcing in the retail sector

-- Customer Relationship Management analysis and integrated sales and product mix management to help retailers better target their customers' needs and optimize their inventory flows by implementing market intelligence techniques and data mining tools.

-- Lastly, top-tier technology consulting services to optimize and secure the operation of systems based on IBM Sysplex or Geoplex multiprocessing architectures.

Strategic Outsourcing
The Galeries Lafayette Group, through Mag-Info-LaSer Informatique, has signed an outsourcing contract with IBM covering the entire information system deployed by Galeries Lafayette department stores and by its subsidiary Cofinoga, one of the leading suppliers of consumer credit and credit card solutions.

This contract illustrates the Galeries Lafayette Group's aim to strengthen the role of its information system in creating value, benefiting from top-quality service and optimum cost control. The decisive factor in the choice made by Galeries Lafayette and Cofinoga was IBM Global Services' proven ability to deliver and apply tried and tested methodologies to the entire information system.

The Galeries Lafayette Group has revenues of 35 billion francs and employs 34,000 people. The Group comprises three retail store divisions (Galeries Lafayette/Nouvelles Galeries ­ BHV ­ Monoprix/Prisunic) and a diversified services division, LaSer (Lafayette Services), dedicated to developing next-generation technological solutions for the retail trade.

LaSer offers scaleable strategies and service solutions to meet the needs of French and European companies in the fast-changing retail industry. Its aim is to become the leading provider of services in France and Europe in activities that are key to the industry's future success. The company is composed of Cofinoga, a leading supplier in the private credit card market, Mag-Info, a benchmark company in IT solutions for the retail trade, and e-LaSer, which brings together the Group's full spectrum of customer relationship management and electronic commerce expertise. LaSer's strategy, supported by sizeable R&D investment, is anchored in fostering synergies between these diverse skills in order to derive maximum benefits from commercial applications of new technologies and thereby create value for the retail and distribution industry. For more information, please visit: http://www.laser.fr , http://www.cofinoga.com or http://www.maginfo.fr.

IBM Global Services is the world's largest information technology services provider, with 1998 revenues of approximately $29 billion. Services is the fastest growing part of IBM, with more than 130,000 professionals serving customers in 160 countries. IBM Global Services integrates IBM's broad range of capabilities -- services, hardware, software and research -- to help companies of all sizes realize the full value of information technology. For more information visit http://www.ibm.com/services.

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