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Information contained in this report relies heavily on sources that may or may not include various government publications, opinions of industry experts, and unofficial Embassy estimates. Statistical data originate from a variety of sources including Government Census surveys, trade reports, industry associations and trade publications. All figures referenced throughout the report are provided in U.S. dollars.
MARKET OVERVIEW:
For the first time in four years, the French women's wear industry is flourishing. This can be credited to a slight increase in domestic consumption and exportation growth.
In 1997, the industry was composed of 772 companies employing a total of 39,624 people. Most companies are located in the Paris area (50 percent). The rest are concentrated in the North of France (mainly in Roubaix and Tourcoing) and in the Southwest (mainly in Lyon for silk and synthetic material).
Domestic production of women's clothing was valued at USD 5.4 billion in 1997 and is expected to grow by 3 percent during the next few years. Mediterranean and Asian countries continue to maintain a strong presence in the French market due to their extremely low production costs.
In 1997, women's wear imports amounted to USD 2.6 billion, while exports for the same period equaled USD 2 billion. The American share of French women's wear imports in 1997 was 0.8 percent, amounting to USD 20.8 million.
French consumers are gradually becoming more receptive to American fashion and, according to analysts, American companies are expected to increase their share in this promising subsector to 3 percent by 1999.
A. MARKET HIGHLIGHTS & BEST PROSPECTS
In 1997, France's population of women aged 13 and up was broken down as follows:
13/18 years: 2.3 million
19/24 years: 2.2 million
25/29 years: 2.1 million
30/34 years: 2.1 million
35/39 years: 2.1 million
40/44 years: 2.1 million
45/49 years: 2.1 million
50/54 years: 1.7 million
55/59 years: 1.3 million
60/69 years: 2.9 million
70 years and more : 3.9 million
TOTAL 24.8 million
Market shares (in percentage of purchased quantities):
Polos/T-shirts: 23.4 percent
Sweaters/Pullovers: 15.5 percent
Pants/jeans: 15.3 percent
Blouses: 10.8 percent
Skirts: 10.0 percent
Dresses: 7.0 percent
Suits: 4.4 percent
Coats/raincoats: 3.2 percent
Swimsuits: 3.0 percent
Jackets: 2.7 percent
Blazers: 2.5 percent
Shorts: 2.2 percent
* Statistical Data
in USD Millions
1997 1998* 1999* Projected Avg. Annual Growth Rate For following 2 Years
Import Market 2,600.0 2,730.0 2,866.0 5%
Local Production 5,436.0 5,599.0 5,767.0 3%
Exports 2,054.0 2,177.0 2,307.0 6%
Total Market 5,982.0 6,152.0 6,326.0 3%
Imports from U.S. 20.8 21.4 22.0 3%
Exchange Rates 5.5 5.5 5.5
Estimated Future Inflation Rate: 3 %
* estimated
Note: Official statistical data for women's wear include clothes for girls aged 13 to 18 years old.
1997 Import Market Shares: United States: 0.8%; Morocco: 12.4%; China: 9.9%; Tunisia: 9.0%; Italy: 8.4%; India: 5.5%.
Sources:
French Customs Office 23, rue de l'Universit
75007 Paris Tel: (33-1) 40.24.65.10
Fax: (33-1) 47.56.30.16
Women's Wear Trade Association 5, rue de Caumartin
75009 Paris Tel: (33-1) 44.94.70.00
Fax: (33-1) 44.94.70.04
Receptivity code (1-5): 3 Range: 5 (extremely receptive) to 1 (not receptive)
French women have been influenced by American trends, and therefore, U.S. imports are expected to grow in the next few years.
* Best Sales Prospects
B. COMPETITIVE ANALYSIS
Advertising: One of the key factors in establishing a brand in France is to provide an adequate advertising budget. American companies should be able to effectively promote their image and reinforce their position. New products should be aggressively marketed to appeal to French women's tastes and to influence their fashion preferences.
Credit/delivery terms: Another important factor is the ability to offer credit terms and reorder services similar to those of French competitors. A European warehouse is an additional advantage in meeting short-term delivery requirements.
Price: Price is also a key factor. If prices are competitive, American manufacturers will be able to penetrate the French market much more successfully.
Clothing characteristics: Women are sensitive to the quality of the product. Therefore the quality/price ratio is extremely important.
* Domestic Production
In 1997, the French women's wear industry was composed of 772 companies employing a total of 39,624 workers. The majority of these French companies were located in the Paris region, in the North of France, and in the Rhone-Alpes region.
In 1997, production of women's wear was valued at USD 5.4 billion representing a 3.3 percent increase in comparison with 1996. During the same period, the number of French companies declined by 1.3 percent. Many French companies have installed their manufacturing facilities in countries with lower labor costs (Portugal, Morocco, Tunisia, Turkey, and recently in Eastern Europe).
French production enjoys a strong image for both creativity and quality. In 1997, total French exports of women's clothing amounted to USD 2 billion representing a 6.3 percent increase in comparison with 1996 figures. According to specialists, French exports should continue to increase by approximately 6 percent over the next few years.
In 1997, French exports were to:
Europe: 49.3 percent
Asia: 21.6 percent
Americas: 9.1 percent
Middle East: 8.1 percent
Africa: 1.9 percent
Other countries: 10.0 percent
Most exports were to: (in USD millions) (Variation in % 97/96)
Japan 259.2 + 4.9
Germany 231.0 + 14.0
Belgium/Luxembourg 215.9 4.9
United States 148.9 + 15.9
United Kingdom 145.0 + 34.3
Switzerland 135.6 + 8.0
Spain 109.8
5.1
Italy 107.0 + 11.2
Hong Kong 101.2 + 8.4
Portugal 67.0 + 19.8
Saudi Arabia 49.5 + 22.3 Exports to the United Kingdom, Saudi Arabia, and Portugal registered respectively increases of 34.3 percent, 19.8 percent, and 11.2 percent. Exports to Spain and Belgium/Luxembourg showed respectively decreases of 5.1 percent and 4.9 percent.
Most exported articles were:
Pants: 22.4 percent
Blouses: 18.1 percent
Skirts: 15.0 percent
Dresses: 13.5 percent
Vests: 8.3 percent
Suits: 6.4 percent
Anoraks: 3.8 percent
Shorts: 3.3 percent
Coats, raincoats: 3.1 percent
Swimsuits: 1.5 percent
Others: 4.6 percent
* 3rd-Country Imports
In 1997, total women's wear imports to France totaled USD 2.6 billion representing a 14.4 percent increase. According to market observers, imports are expected to increase by approximately 5 percent over the next few years. Most imports came from countries with low production costs, such as Morocco, Tunisia, and China.
In 1997, French imports came from:
Europe: 42.8 percent
Asia: 31.8 percent
Africa: 22.8 percent
United States: 0.8 percent
Other countries 1.8 percent
Morocco held an important share of the French market in 1997 (12.4 percent of total imports), followed by China (9.9 percent), Tunisia (9.0 percent), Italy (8.4 percent), and India (5.5 percent).
Imports from Pakistan, Germany, and Thailand have experienced a decline in comparison with 1996 figures -- respectively -17.4 percent, -6.6 percent, and -1.7 percent. Many French companies have set up highly competitive manufacturing facilities in Eastern Europe. Therefore, imports from Romania registered an increase of 28.6 percent, and imports from Poland showed an increase of 12.4 percent. The following countries also registered a significant increase in comparison with their 1996 figures:
Vietnam + 67.7% representing 1.4% of total 1997 imports
Ukraine + 45.3% representing 1.4% of total 1997 imports
Indonesia + 34.8% representing 2.6% of total 1997 imports
Hong Kong + 29.5% representing 3.1% of total 1997 imports
Most imported items were:
Pants: 23.3 percent
Blouses: 17.8 percent
Skirts: 12.5 percent
Dresses: 11.5 percent
Shorts 9.7 percent
Vest: 6.2 percent
Anoraks: 5 1 percent
Coats/raincoats: 4.4 percent
Suits: 2.6 percent
Swimming suits: 0.8 percent
Suits: 1.0 percent
Others: 4.8 percent
Vests and pants registered a significant increase of 34.5 percent and 18.1 percent, respectively. Imports of dresses also registered a strong increase (plus 12 percent), as did imports of coats/raincoats (plus 10.1 percent). Imports of anoraks registered a decrease of 5.5 percent.
* U.S. Market Position
In 1997, imports of women's wear from the United States represented 0.8 percent of total imports. Given the fact that French women are becoming more receptive to American fashion, American imports are expected to grow in the upcoming years. Well-known American designer brands, such as "Donna Karan" and "Calvin Klein" are sold in French department stores. One year ago, Calvin Klein opened a boutique in Paris in a famous fashion street (avenue Montaigne, 75008 Paris). In addition, the New-York designer Nicole Miller just opened a boutique in Paris across the street from the Chanel boutique (rue Cambon, 75001 Paris).
In light of the above, there appears to be numerous opportunities for American companies to successfully penetrate the French women's wear market.
ASIAN INVASION ON FRENCH APPAREL
A wave of low price, Asian, apparel imports is overwhelming Europe. European textile producers have requested that the World Trade Organization (WTO) award it a safeguard clause, which would be a protection for the European producers. However, differing viewpoints between the WTO and the European governments make it unlikely that a quick decision will be made to prop up the European textile industry.
Foreign trade of French textile is in decline, but imports of end products, coming from low wage countries, are increasing. Trade fell during the first 3 months of 1999, with a decline of 4 percent (USD 2,386 billion) for textile exports, and a decline of 2 percent (USD 2,978 billion) for textile imports.
In the apparel sector, exports are rising (+ 1 percent = USD 896 million) and imports are also increasing (+ 6 percent = USD 1,516 billion). These numbers represent a real turnaround, in comparison with 1998, when foreign trade was at its top level. But it seems to be the first effects of a bearish tendency on the French general activity, linked with the Asian crisis.
Increasing importance of end products in low price imports
Apparel coming from low price developing countries (LCDs) is rapidly rising but yarns and fabrics are collapsing.
FABRICS -19 PERCENT
YARNS 12 PERCENT
KNITTING + 7 PERCENT
APPAREL + 8 PERCENT
2. More and more concentrated, large-scale retailers seized the opportunity of Asian devaluation to supply themselves with end products manufactured in the Far East. Specialized channels of trade and supermarkets do not care about apparel. They prefer to buy Asian end products because of the devaluation that is occurring there. Consequently, their purchases of fabrics and yarns from Europe are less and less important. Otherwise, retailers, more and more, import raw materials from Asia, design the product in Europe, and then manufacture it on site. Only an increase in prices in the area and a powerful dollar could break the vicious circle. But this fortune does not benefit Asia as a whole. China is the one country in the area to take advantage of these movements: there are + 31 percent of Chinese apparel coming into France compare to 1998. Sales of Chinese in France increased by one third in the first 3 months of 1999 (USD 1,475 million).
France's 3 main suppliers
CHINA TEXTILE + 15 PERCENT APPAREL + 31 PERCENT
TUNISISA TEXTILE + 17 PERCENT APPAREL + 16 PERCENT
TURKEY TEXTILE + 7 PERCENT APPAREL + 9 PERCENT
Turkey occupies the 4th rank for textile products, Tunisia the 1st rank for apparel with more than USD 213 million sales for the first semester of 1999. Then, the 3 first suppliers for France in textiles, Italy (-6 percent), Germany (-10 percent), Belgium (-11 percent), are all decreasing.
3. Foreign trade for French textile at the first semester of 1999 (billion $)
TOTAL EXPORTS
TEXTILE
4 PERCENT ($ 2,386) APPAREL + 1 PERCENT ($ 0,896)
TOTAL IMPORTS
TEXTILE
2 PERCENT ($2,967) APPAREL + 6 PERCENT ($ 1,582)
Foreign trade of textile is decreasing and foreign trade of apparel is seeing a slow growth.
Imbalance between Europe and 5 Asian countries (China, India, Indonesia, Pakistan, Thailand) in trade of textile and apparel
EUROPEAN IMPORTS $ 14,37 BILLION EUROPEAN EXPORTS $ 0,455 BILLION
Average coverage rate: (export / import) 3,7 percent.
In 1998, exports of European textile / apparel to the 5 considered countries only represented + 3,7 percent of imports.
Source: Journal du Textile
dated June 21, 1999
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