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AOL France Signs E-Tail Deal with Auchan

[London, ENGLAND] AOL France has signed a deal, estimated to be worth over US$200 million, with French retail giant Auchan to develop an online shopping service.

As part of the deal, AOL France will become the exclusive service offered on computers sold in Auchan's hypermarkets -- and AOL will have a golden opportunity to publicize its new unmetered Internet access service.

The new service will be branded "AOL avec Auchan" (AOL with Auchan) and marketed throughout Auchan's retails stores. Last year, Auchan sold around 130,000 PCs in France and says it has increased sales by 70 percent during the first six-month period of 2000.

Stéphane Treppoz, director general of AOL France, said the deal brought together two powerful groups to promote Internet access in France.

"The partnership is modeled on exclusive distribution agreements between AOL and large retailers in the United States like Wal-Mart, Target, Sears, and Circuit City," said Treppoz.

With Auchan, Treppoz said he expected to add another 250,000 subscribers to AOL France.

Auchan's online store will be accessible at Auchandirect.fr and is expected to sell around 4,000 products initially. Deliveries of groceries, fresh food, etc., will start in the Paris area, where over a quarter of the French population lives, and will be extended to other parts of the country over the next two years.

In starting its online service, Auchan is lagging behind such U.K. ventures as TescoNet, which has successfully picked up thousands of customers both for its ISP and its online shopping service. Unlike Auchan, Tesco developed the service without a major online partner.

However, Claude Palmieri, general manager of Auchan Interactive, said customers would benefit from AOL's know-how as well as from Auchan's experience in retailing.

Auchan is hoping to achieve online sales of over US $1 billion within two years of operation.