On Monday September 25th, Paris Fashion Week begins, the most anticipated event in women’s fashion, offering the opportunity to assess the evolution of the sector.
In France, the financial development in the women’s clothing category is characterized by extremes: on the one hand, several well-known women’s fashion brands such as Naf Naf, Gap France, Kookaï, Pimkie and Jennyfer have gone into liquidation or bankruptcy. Even large companies like Fast Retailing are affected: the company is examining the possibility of closing around 40 percent of its Princesse Tam Tam and Comptoir des Cotonniers stores.
Mid-range players are affected by the consequences of an extraordinary increase in clothing and textile prices due to inflation, which will rise by six percent in 2022, compared to an increase of nine percent in the previous 30 years.
As a result, French women are limiting their spending on these products even more than men, according to the Economic Observatory of the French Fashion Institute (IFM). According to its management, the reason for this is the wage gap between men and women (about 15 percent), which explains why women consumers are more cautious about the price differences of their clothes.
The inflation-resistant power of French luxury maisons
On the other hand, the French luxury groups appear to be experiencing an upswing thanks to their global influence. The luxury goods market is expected to grow by five to 12 percent this year, reaching between $386 billion and $408 billion (between €361 billion and €382 billion), according to global consultancy Bain & Company. As for the combined value of France’s 50 biggest brands, it has risen 30 percent in the last two years to more than $424 billion (397 billion euros), with Louis Vuitton leading the way, according to data firm Kantar.
Top French brands have a unique and extensive global reach, with a significant portion of their value coming from business outside their home market. In 2023, a report by Kantar BrandZ found that 85 percent of the value of the top 50 French brands comes from activities and reputation abroad, compared to 51 percent of German top brands, 41 percent of Japanese top brands and ten percent of Chinese top brands. This global perspective has proven to be a great advantage over the last two years. More specifically, this globalized expertise has enabled French brands to identify profitable areas of expansion, even in a global economy characterized by a number of overlapping challenges.
Master brand value and brand proximity
With an innovative growth and expansion model, Louis Vuitton has positioned itself as more of a “megahouse” than a fashion label. Over the past decade, the company, along with Chanel, has surpassed the $10 billion sales mark and has continued to grow from there, reaching the $20 billion threshold this year. This triumph is the result of constant attention to brand equity, recognized as an asset that requires constant investment and care. In practice, this approach includes hosting fashion events, collaborating with prominent ambassadors and cultural icons (such as Virgil Abloh, Deepika Padukone or Ana de Armas) and highlighting flagship products. A mix of efforts that reinforces the brand’s proximity to its customers.
It is this ability to build close relationships with their customers that has allowed these brands to justify significant price increases. And the latter have proven successful as they have been able to beat inflation and rising raw material costs, resulting in significant profits. While the mid-range ready-to-wear segment is suffering from price increases, some brands in the luxury segment have even more than doubled the prices of their best-selling items in just five years without any negative impact on sales.
How to assert yourself in the French market
The brands that have managed to be perceived as offering “justified premium” prices and reach out to French consumers are those that have recognized the need to reach out beyond the fashion industry; those who know that they must demonstrate their contribution to society. As the study by Kantar BrandZ France shows, a company’s responsibility towards the environment, society, its employees and suppliers is now three times more crucial to its reputation than it was ten years ago. The largest French brands have adopted this perspective and place particular emphasis on a “regenerative” economy.
Hermès, which like Louis Vuitton can already claim the title of “megabrand,” is now putting sustainability at the heart of its craftsmanship. In 2021, the company founded the École Hermès des Savoir-Faire to train a new generation of artisans in different regions of France. In addition, as part of the Petit H concept, objects and accessories are made from surplus materials collected in the numerous Hermes ateliers. As a result, Hermes has reached second place in Kantar BrandZ’s rankings with a brand value of $57.5 billion, an increase of 48 percent since 2021. This means Hermès surpasses Chanel, whose brand value has increased by 30 percent and now reaches $57.1 billion. Kering has even created a “Sustainable Development” section on its website. Among the many initiatives featured there is the Fashion Our Future podcast, in which celebrities such as actress Kerry Washington, activist designer Aurora James and environmental activist Saad Amer explore how to balance fashion and the environment . While this may seem like a greenwashing initiative to some, it has the potential to educate a large audience and ultimately create connections between professionals and decision-makers.
French brands are leading the way in shaping the “circular economy” future of fashion, and this sector offers promising opportunities. The second-hand luxury goods market was estimated by the Boston Consulting Group to be around $35 billion in 2021, up 65 percent from 2017. Bain & Company forecasts that this market could generate up to 20 percent of a luxury company’s revenue by 2030. This luxury segment has the potential to appeal to affluent French consumers who can more easily allocate resources to protecting the planet. To harness this potential, French resale platforms such as Vestiaire Collective and Reset have already collaborated with brands such as Courrèges, Alaia and McQueen on innovative retail models for luxury goods.
What about “Made in France”?
The few haute couture brands that take part in Fashion Week can be proud of being “made in France”. However, this only applies to their haute couture line, which must follow strict rules, including being manufactured in their French ateliers. The ready-to-wear collections, on the other hand, have a separate production process and finding the supply chains for raw materials, fabrics and production facilities can be challenging. The “Made in France” label often carries the risk of misleading consumers, as it can also be applied to products that only undergo their final processing stage in France.
However, it should be noted that only 16 fashion houses carry the haute couture label (not all of which are present at fashion week): 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.
This article originally appeared on FashionUnited.uk. Translated and edited by Simone Preuss.