The global fashion industry is grappling with high inflation and a crisis stemming from Russia’s invasion of Ukraine. France’s pret-a-porter sector is no exception. While French luxury labels such as Chanel and Louis Vuitton continue to turn a profit, many midrange brands have been forced to enter bankruptcy proceedings. Except for those with innovative approaches.
Bankrupt brands include shoemaker Andre and women’s fashion labels Camaiyu and Kukai.
“Our company was incredibly successful and we had about 300 retailers in ten countries,” Kukai’s marketing director Jennifer Cohen Solal told DW.
“But after the French group Vivarte bought the company in 1996, things started to go downhill – our customers slowly withdrew their love,” she said.
Vivarte reduced the company’s business to three countries – France, Spain and Switzerland – and stopped investing in the remaining 120 stores.
A restructuring plan was already in place when Australia’s Maggi bought the brand in 2017. The second was to follow in 2021.
“Banks rejected two of our requests for government-backed emergency loans after the start of the COVID-19 pandemic because of our poor financial health,” recalled Cohen Solal. Kuokai entered bankruptcy proceedings in February this year.
hit many crises
But Philippe Moti says today’s high inflation and sinking purchasing power are the last straw for many midrange prêt-à-porter chains. He is a professor of economics at the Paris Cite University and the founder of the Paris-based market research company Obsoko.
“Midrange fashion labels in France are suffering from a lot of crisis,” he told DW.
“Months of yellow vest protests for more social justice since November 2018 have meant many customers are reluctant to go shopping and, more recently, week-long lockdowns due to the COVID-19 pandemic have exacerbated the chains’ cash flow problems,” he said.
“What’s more, there are many shops in France – the market is saturated – and since 2017, sales are allowed all year round, which has increased competition,” noted Moti.
He added that websites selling secondhand clothes, such as the Lithuanian platform Vinted, put the sector under further pressure.
Stiff competition from fast fashion
And yet, there was a golden age for France’s midrange prêt-à-porter sector, recalled Gildas Minviel, director of the Economic Observatory at the Paris-based fashion school Institut française de la mode.
“These stores overtook small boutiques in the 1980s and had a very successful period up until 2010, 2015,” he told DW.
But now, the sector also has to deal with so-called fast fashion brands – extremely cheap and constantly updated clothes.
“The Chinese company Shen is a particularly tough competition – with only one online presence it sells all sizes of pure players, including very small and very large,” explained Minvielle.
As with luxury brands, more affordable clothing is popular. That especially worries Minvielle.
“Every purchase has an impact and young people should be aware of how polluting fast fashion is,” he said.
The fast fashion sector is raising environmental and ethical concerns for using large amounts of resources and producing under questionable labor conditions.
‘The market is shrinking’
Since the start of the pandemic, which has forced the business world to work from home, people are less concerned about what they wear, believes fashion industry veteran Michel Rességuirre.
“In 2019, people weren’t sporting a tie in the office but still wearing a formal shirt – now, they’re working from home in a T-shirt,” he told DW.
Experts say the trend for more casual clothing at work began around 2000 when Apple’s Steve Jobs, who died of cancer in 2011, began addressing press conferences in sneakers and turtlenecks.
“Brands in this segment need to acknowledge that the overall market is shrinking,” underlined Resseguier.
But he also sees a silver lining – something he’s trying to achieve with Paprika, the women’s fashion brand he currently works with.
“Brands can survive if they return to their raison d’etre,” he said. “We are giving more power and responsibility to employees on the shop floor and local managers because they understand the needs of the customer and know how to rebuild the bond with them.”
Innovative concepts to brave the storm
As Yann Rivolan, head of the Paris-based Federation of Female Prêt-à-Porter, said, some brands are doing well despite many crises – through innovative concepts.
“Companies like Loom or Bon Guell are successful with sustainably produced textiles,” he told DW. “Chains that are being creative and building a good image online are also doing well.”
A large network of stores can also be a positive factor.
“Brands can, for example, use hybrid models where customers reserve online to pick up goods at a specific store. Or they can organize promotional events in their stores,” Rivolán explained.
That’s what Cohen Solal of Kukai has in mind.
“We want to boost our e-commerce – but only to reach 15% of our turnover,” she said.
“A high e-commerce share will not be fair, as online advertising has become incredibly expensive since the GDPR data protection regulations came into effect in 2018, which means we can no longer rely on cookies but must buy ads,” she said. , referring to European Union legislation on data protection and privacy.
“And we will strengthen our social media presence to focus on our core customers – women between the ages of 25 and 35,” Cohen Solal added.
Editing: Ashutosh Pandey