What: Fashion brands in France struggle to return to pre-pandemic levels of activity for the first half of 2022.

Why it is important: New behaviours of customers that were induced by the health crisis still persist today and are leading to lower traffic and conversion rates as well as consumer trade-offs that are being made against clothing.

Retail Int. for the Trade Alliance reports that sales are down 5% compared to the same period in 2019 for fashion brands in France. Store turnover is at a decrease of 9% compared to 2019. While the rise of e-commerce is up 68% compared to 2019, the trend’s plateau in 2021 only offsets the decline in physical stores by half for this year.

January of this year saw poor performance due to new variants of Covid-19 and a hopeful recovery in February was stamped out by the start of the Russian-Ukrainian war. May saw a spring upturn helped by favourable weather. However, the month of June showed a drop-in activity of 13% (vs. 2019).

The beginning of the discount period (from June 22 to July 2) saw a drop in sales of around -19% (vs. 2019), accompanied by a drop of 28% in traffic. While an increase in the average basket is observed (+12%), there is no visible increase in the conversion rate. The Alliance du Commerce reported that men’s fashion performed well, the children’s segment performed decently, and complicated trends for the women's and lingerie departments. Footwear is having a difficult period.

Consumer behaviour remains affected by the pandemic with consumers going in-store less frequently and favouring shopping outside cities. Outlets have seen an increase in sales of 8% over the period. Retail parks are also holding up well. And as tourism begins to increase, popular city districts are seeing an improvement in foot traffic and sales.

On average, fashion players have increased their selling prices by 4.1% as consumers are in search of good deals. Yet with brands still reeling from increased costs within the supply chain, the challenge to meet the consumer in the middle becomes a difficult balance.

The new minister of trade, SMEs, crafts, and tourism is looking to tackle investment support for brands, changes in taxation (additional depreciation, reduction in CVAE and Tascom, tax credit), capping of commercial rents, and financing assistance (reinforcement of loans offered by the BPI in particular).

Fashion sales remain low for the first half of 2022