With the advent of the pandemic, the business planners had to be reconsidered by billionaires Oldřich Šlemr, Pavel Baudiš and Eduard Kučera, who in 2019 bought the InterContinental hotel at the northern end of Pařížská through their R2G fund.
“Although the speed of reconstruction of the hotel does not change, we will catch the announced beginning of 2023, but we definitely expect a slower return of tourists. We originally expected the volume of tourism to return to pre-Eid figures in 2024, but given the current situation, this may happen two years later or even longer, ”says Jakub Dyba, R2G’s new investment director.
The fund calculates returns over decades: “The return on the pandemic could extend by an estimated 15 percent.” The hotel was taken over by Fairmont Hotels & Resorts, part of Accor’s strong Canadian network. According to Dyba, it will therefore be important in what numbers tourists from North America will begin to return to Paris.
–
–
Not only the money of the Americans, but also the creditworthy Chinese and Russians lack boutiques with luxury fashion or even jewelry stores. In addition, traders are at risk of tightening government anti-pandemic measures.
“Probably no one wants that and it would definitely not benefit the business. Our product, ie luxury jewelry, is also directly connected to the lifestyle taking place in the company, ie in the exact opposite of lockdown closures, “explains the sales and marketing manager of jewelry store Roberto Coin Štěpán Pokluda.
Attracting customers back will be all the more challenging because many jewelry has become more expensive. “We adjust the prices of our products accordingly to the economic situation. Let us recall the recent rise in gold prices, “adds Pokluda, adding that due to exchange rate differences, jewelry was at a disadvantage.
In the summer months, on the other hand, the underground business disadvantaged Bugsy’s Bar, which is adjacent to, for example, the Tiffany goldsmith or the clothing giant Gucci. The main season at the bar is expected in the coming months.
–
–
“I have been working in Paris for over twenty years, the loss of people on the streets is extreme. Businesses dependent on tourists have a big problem surviving. I know the employees of luxury stores, they also have a Czech clientele, but the absence of mainly Russians and Chinese creates gigantic losses, “describes the bar manager Jan Braniš.
The turnover of his company also fell by half with the onset of the pandemic. Due to the increase in the price of energy or raw materials, Braniš does not rule out that it will also become more expensive in the bar: “Water and electricity are the most hot in gastronomy, they have risen by tens of percent. For drinks, we expect an increase in inflation at the turn of the year. “
But the loss of business people in Paris does not stem only from the pandemic. In the past, there were restaurants, “normal” shops such as regular drugstores and other services in the street. “Now there are only luxury shops and a few offices. Life here ends with their closing time. The street itself is not alive, you don’t even have a place to go for coffee, “describes Braniš.
Nespresso Boutique Pařížská is also more expensive. “We raise prices for selected coffee machines. As a result of the pandemic, the manufacturing industry has seen an increase in costs for a number of components and commodities used in the production of coffee machines, ”advocates the increase in prices by Nespressa marketing manager Andrea Petrová. “Given the rise in coffee prices, which is at a seven-year high, we are also forced to think about the pricing policy of our coffees and reflect market developments,” he adds.
The losses of traders are illustrated, for example, by the recently published financial results of the Czech branch of Louis Vuitton. While in previous years the annual turnover of the domestic branch was close to one billion crowns and even slightly exceeded this limit the year before, last year it fell to 533 million. Net profit fell by two-thirds to less than 80 million.
–
–
Financial losses exacerbated by the pandemic this year also forced Zdeněk Bakala to flee from Pařížská. The businessman acquired boutiques in 2012 from “political entrepreneur” Ivo Rittig. Originally, it operated 25 of them in the center of the metropolis through the company Luxury Brand Management, last year it reduced their number to below ten. LBM had suffered before the pandemic, the accumulated loss according to the latest annual report was 462 million, Message list.
On the contrary, the company Carollinum, which sells watches of the most luxurious brands, also reports strong demand in the pandemic. Customers perceive them as an investment even in difficult times. That is why some watches on the whole market are long awaited.
“We are increasingly feeling the extension of deliveries for highly exposed pieces. Demand extremely exceeds supply, people are investing in things with more lasting value, watchmaking factories have also struggled with limited production, ”explains owner Carollina Tamara Kotvalová.
At best, the surviving traders in Paris will respond by raising prices. In the worst case, when the government would tighten anti-pandemic measures and tourism would suffer even more, it would be worthwhile for many traders to close branches, warns Port analyst Vratislav Zámiš.
“Rising prices of energy, materials, but also labor are already reflected in product prices, and this trend will continue in the coming months. Sellers of luxury goods have a certain advantage, because their customers react to rising prices with less force and usually do not change their minds, “says Zámiš.
Demand for luxury goods is growing mainly in Asian markets, especially in China. “Companies like Moët Hennessy and Louis Vuitton are increasingly moving in this direction. The growing standard of living in these countries also increases sales, “adds Zámiš, adding that it will also be very important for boutiques in Pařížská to strengthen their position by adapting the transition of customers to the online environment.
The new e-shop was recently launched by the aforementioned company Carollinum, but personal contact with customers remains a top priority.
The shops were empty even after the repeal of government measures last May:
– .
