In France, several large ready-to-wear brands face difficulties raising fears of important social plans. For them, the Covid-19 crisis appears to be the last in a long series.
Thousands of jobs are hanging by a thread. After two months of closure due to the Covid-19 epidemic, ready-to-wear stores have reopened … but they may soon close for other reasons. After Naf Naf, the Camaïeu brand, which has some 3,900 employees in France, will be placed in receivership on Tuesday, May 26. One after the other, the French ready-to-wear chains are falling: in April, Promod already announced 133 job cuts at its northern headquarters. Tuesday, May 26, it was the turn of the shoe and clothing brand La Halle to announce the conversion of its safeguard procedure into receivership.
“Camaïeu, it’s not nothing, it’s a lot of jobs!” alert Gildas Minvielle, director of the Economic Observatory of the French Fashion Institute, contacted by franceinfo. The brand, which has more than 600 stores in France, was hit hard by the health crisis and did not obtain a loan guaranteed by the State (PGE). “I do not understand why”, blows the researcher. The Minister of the Economy is looking for a buyer for “that there are not 4,000 employees who find themselves on the floor “, he assured at the microphone of Classic Radio Wednesday May 27.
But the outlook is bleak: according to a study by the Fashion Institute, the current economic situation should lead to a drop in sales of clothing and textile items from 17 to 25% over the whole of 2020 An unprecedented and serious situation for the director of the economic observatory. “This is not just a glamorous glitter: fashion is essential for the French economy! “ he recalls. In its broadest sense (clothing but also cosmetics, leather goods …) the fashion and luxury sector indeed weighs 150 billion euros in direct turnover, “more than aeronautics and car manufacturing combined”, specifies the Directorate General of Companies. How did French brands get there and why are they so badly affected? Here are some explanations.
The sector has been in crisis for over ten years
The health crisis does not explain everything: “Lhe sector was already going through a difficult period, Explain Gildas Minvielle. On average, since 2007, the evolution of distributors’ turnover has declined. Over the whole period, it fell by just over 15%. ” For the fashion economist, this decline is linked to changes in purchasing power and changes in consumer behavior.
We were not at all in a context of overconsumption.at franceinfo
The French distribution groups, which are in competition with large international ready-to-wear brands such as Zara or H&M, have decided to respond to this drop in consumption by opening new sales spaces. “The store fleet tended to grow between 2007 and 2015, even though the market was in decline”, remembers the economist. “We had too much supply in a context where demand was oriented downwards”, he analyzes.
These reasons, coupled with an increase in professional rents, lead from 2015 to a crisis in the textile distribution sector. Some actors are doing better than others, specifies Gildas Minvielle, however: “What is difficult is the medium range”, sector corresponding to Naf Naf and Camaïeu in particular. Luxury is relatively spared, as are first-rate clothes, which correspond to “more rational consumption “, almost necessary: children’s clothing, etc.
He suffered the full force of the “yellow vests” movement and the strikes
“We suffered the ‘yellow vests'”, with an influx in stores down 20 to 25%, “then, during the sales period in January [2020], strikes linked to pension reform “, and now the Covid-19 pandemic, deplored Spartoo CEO Boris Saragaglia, owner of the André brand, when the company went into receivership.
Since the end of 2018, ready-to-wear stores have been shaken by the news: first affected by the social movement of “yellow vests” especially because of blockages of warehouses and the closing of stores during Saturdays of demonstrations, they suffered from the end of 2019 the repercussions of strikes linked to the pension reform.
The decision to close all non-essential businesses on March 14, 2020 was an additional shock. “He there is nothing that has been as large as what is happening now, warns Gildas Minvielle. “Yellow vests”, this could have had an impact of a few points in the evolution of consumption, but here we are talking about -20 to -25%, it is completely new. ”
The sector is linked to globalized production, which is also stopped.
Health crisis led to unprecedented collapse demand. Some consumers have turned to online commerce, which “currently represents nearly 15% of sales in clothing” specifies the researcher. However, the sales thus made could not fill the shock caused by the sudden cessation of physical trade.
The coronavirus crisis has also completely changed the offerings of these brands. The The fashion sector is indeed dependent on the highly globalized textile industry. “The companies that supply fabric are not only Asian. There are a lot of fabric manufacturers in Italy, in the Maghreb … ” detailed Gildas Minvielle. Areas that have been completely stopped as well. The result: in addition to the plummeting sales, all production was forced to stop.
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