Marked by extremes, driven by global clout: Womenswear in the French market

On Monday September 25, Paris Fashion Week, the most anticipated event in the women's fashion industry, kicks off, presenting an opportunity to evaluate how the sector is performing.

In France, the financial performance of the womenswear category is marked by extremes. On one hand, several renowned womenswear brands have gone into liquidation or receivership. These include Naf Naf, Gap France, Kookaï, Pimkie and Jennyfer. Even large companies like Fast Retailing are impacted: the company is exploring the possibility of shutting down approximately 40 percent of its Princesse Tam Tam and Comptoir des Cotonniers stores.

Players in the mid-range segment are being hit by the consequences of an extraordinary rise in clothing and textile prices due to inflation, up 6 percent in 2022 compared to a 9 percent increase in the previous 30 years.

Consequently, French women are reducing their spending on these products even more so than men, indicates the Economic Observatory of the French Fashion Institute (IFM). According to its director, the reason behind this is to be found in the difference in pay between men and women (around 15 percent), which explains why women consumers are more careful about the price variation of their clothes.

The inflation-resident power of French luxury Maisons

Conversely, there seems to be a surge in the French luxury giants, backed by their global clout. The luxury goods market is projected to grow by between 5 percent and 12 percent this year, reaching between 386 billion dollars and 408 billion dollars, according to global consultancy Bain & Company. As far as the total worth of the biggest 50 French brands are concerned, they have risen by 30 percent in the last two years, exceeding 424 billion dollars, according to data company Kantar, with Louis Vuitton being the top performer.

Top French brands have a unique and extensive global reach, with a significant proportion of their valuations attributed to business outside of their home market. In 2023, a Kantar BrandZ report revealed that 85 percent of France’s top 50 brands’ value was derived from overseas activities and reputation, in comparison to 51 percent of the top German brands, 41 percent for Japan, and 10 percent for China. This global perspective has been a substantial asset over the past two years. More precisely, this globalized expertise has enabled French brands to identify profitable areas for expansion, even in a world economy beset by a range of overlapping challenges.

Mastering brand equity and proximity

With an innovative growth and expansion model, Louis Vuitton has positioned itself as a "mega-house" rather than a fashion label. Over the last decade, alongside Chanel, it surpassed the 10 billion dollars annual revenue mark and kept growing from there, achieving the 20 billion dollars threshold this year. This triumph is the outcome of constant attention to brand equity, acknowledging it as an asset deserving of unceasing investment and care. In practice, this approach involves hosting fashion events, partnering with prominent ambassadors and cultural icons (such as Virgil Abloh, Deepika Padukone, or Ana de Armas), and emphasizing its flagship products. A blend of efforts which reinforced the brand’s proximity with their customers.

It is this ability to create strong relationships with their customers that has notably allowed such brands to justify significant price increases. And the latter has proven successful in outpacing inflation and growing raw material expenses, leading to significant profits. While the mid-range ready-to-wear segment suffers from a price increase, some brands in the luxury segment have even more than doubled prices for their top-selling items in just five years without any adverse effects on sales.

How to be relevant in the French market

The brands that have succeeded in being perceived as offering “justified premium” prices and getting closer to French customers are those that have grasped the need to engage beyond the fashion industry; the ones that know they have to demonstrate their contribution to society. As Kantar BrandZ France study illustrates, a company's responsibility towards the environment, society, its employees, and suppliers is now three times more decisive for its reputation than it was ten years ago. France's largest brands have thus embraced this perspective, placing particular emphasis on a "regenerative" economy.

Hermès, which, like Louis Vuitton, can already claim the title of mega-brand, now places sustainability at the core of its craftsmanship. In 2021, it established the École Hermès des Savoir-Faire to train a new generation of craftspeople across several regions throughout France. Additionally, it crafts objects and accessories using excess materials collected from Hermes' many ateliers, through its Petit H concept. As a result, Hermes has attained the second position in Kantar BrandZ’s ranking with a brand value of 57.5 billion dollars, securing a 48 percent increase since 2021. This surpasses Chanel, whose brand value has grown by 30 percent, now reaching 57.1 billion dollars. Kering, for its part, has even added a “sustainable development” section to its website. Among the many initiatives showcased there is the “Fashion Our Future” podcast, in which celebrities such as actress Kerry Washington, activist designer Aurora James, and environmental campaigner Saad Amer explore how fashion and the environment can be reconciled. While this may seem to some like a greenwashing initiative, it has the potential to educate a sizable audience and eventually establish connections between specialists and decision-makers and doers.

French brands are leading the way in shaping the future of the "circular economy" of fashion, and this sector presents promising opportunities. The second-hand luxury goods market was valued at approximately 35 billion dollars in 2021 by Boston Consulting Group, which is a 65 percent increase from 2017. This market may generate up to 20 percent of a luxury company's revenues by 2030, according to Bain & Company forecasts. This luxury segment has the potential to appeal to the French affluent consumers who can more easily allocate resources towards safeguarding the planet. Tapping into that potential, French resale platforms such as Vestiaire Collective and Reset have already collaborated with brands such as Courrèges, Alaia, and McQueen on innovative luxury commerce models.

What about ‘made in France’?

The few Haute Couture brands participating in Fashion Week can take pride in being "made in France". However, this only applies to their haute couture line, which has to follow strict rules, including being produced in their French ateliers. Their ready-to-wear collections, on the other hand, are subject to a separate production process, and locating the supply chains for raw materials, fabrics, and production sites can present challenges. The "made in France" label often runs the risk of misleading consumers as it can be applied to products that only undergo the final processing stage in France.

For the record, only sixteen Maisons benefit from the Haute Couture label, (some of which are no longer on show): Adeline André, Alexandre Vauthier, Alexis Mabille, Bouchra Jarrar, Chanel, Christian Dior, Franck Sorbier, Giambattista Valli, Givenchy, Jean Paul Gaultier, Julien Fournié, Maison Margiela, Maurizio Galante, Rabih Kayrouz, Schiaparelli, Stéphane Rolland.