By  on June 19, 2008

Fashion has been the fiber of this city since the Sun King's court in nearby Versailles mixed power, elegance and style.

But as much as "la mode" is anchored in the Parisian psyche, thanks to designers from Coco Chanel to Yves Saint Laurent, much has changed since French culture dominated the globe and fashions each season dictated the rules of style.

In today's flatter world, Paris even battles emerging powers to retain its crown as fashion's reigning regent.

Thanks to the Chambre Syndicale, France's governing body of fashion, the city has weathered ups and downs — at least in high fashion — and remains the world's foremost showcase for creativity and experimentation.

Designers across the globe — even Chinese and Indian designers now show collections in Paris — view presenting collections in the City of Light as the ultimate recognition.

Next up for women are the couture shows for fall-winter, which will be held June 30 to July 3. That tradition stretches to the 19th century, when Charles Frederick Worth, an Englishman, became the darling of the chic and father of French haute couture, outfitting Empress Eugenie and her court. (Worth's son, Gaston, founded the Chambre Syndicale de la Haute Couture.)

Fashion and lifestyle today are among the city's most important industries, in revenue and image.

Two of the world's most important luxury groups — LVMH Moët Hennessy Louis Vuitton and PPR, which owns Gucci Group — have Parisian headquarters, and countless others, from Chanel to Hermès, call the city home.

But even as luxury asserts leadership in Paris, the French fashion industry has suffered. A number of businesses, outdueled by competition abroad, have had to close or downsize.

More than a quarter of France's apparel-making jobs are based in the greater Paris region, with many of them mom-and-pop-size businesses. More than 80 percent of apparel makers in and around Paris had fewer than five employees in 2003, while 96 percent of fashion manufacturers in the area employ fewer than 20, according to the Regional Center of Observation of Commerce, Industry and Services, or CROCIS.

CROCIS stressed that the sector was destabilized by growing global competition, with "the quasi disappearance of production [fabrics and garments] beyond luxury, haute couture and activities with great added value.""It is a necessity for French companies to position themselves on the highest market segments or the most technical activities," CROCIS added in a recent study.

The movement upscale also is spilling to retail activities here, with main department stores — Le Bon Marché, Printemps and Galeries Lafayette — over the last decade having moved to the market's top tier. Even streets that were once popular shopping destinations are migrating to the top. Rents on the Champs-Elysées more than doubled in the last five years as tenants from Cartier, Louis Vuitton, Montblanc and Hugo Boss encroach on the street's cinemas and bookstores.

Rents became so steep, even McDonald's is being priced out of the Champs-Elysées, which attracts 100 million visitors a year to admire what the French boast is the "most beautiful avenue in the world." (McDonald's is suing its landlord to freeze its rent.)

A study by Cushman & Wakefield noted that rents on the Champs-Elysées rose 8.7 percent last year. The street is the third most expensive retail location in the world after Manhattan's Fifth Avenue and Causeway Bay in Hong Kong, with average rents at more than $900 a square foot, the highest in Europe.

Like many subjects in France, the street is a study in contradictions. While the likes of McDonald's are battling to stay there, others are struggling to open no matter the cost.

An attempt to open on the Champs-Elysées by Hennes & Mauritz, the Swedish fast-fashion giant, was spurned by the Paris mayor's office. The move by Mayor Bertrand Delanoe to block the store came after a French commission informed H&M that opening the store was a no-go because it would "banalize" the street to the detriment of more cultural destinations, such as bookshops and movie theaters fleeing escalating rents.

The commission's initial red flag was lifted late last year — a decision then rescinded — only to have Delanoe get involved because he felt he needed to protect the street's "magic" and "diversity."

An H&M spokesman said the company still hopes to earn the right to open on the street and is trying to navigate the sensitive issue. H&M tried to sweeten its project by getting high-profile French architect Jean Nouvel, who won the Pritzker Architecture Prize this year, to design the store.The H&M example underscores how complicated doing business in France can be.

Companies have to deal with the 35-hour work week — legislation meant to create jobs and eliminate unemployment — as well as highly restrictive opening laws and regulated sale dates.

Shops in France aren't allowed to open on Sunday, except during peak periods around holidays and the first weekends of sales periods, set by the prefecture.

Recently Louis Vuitton faced trouble gaining authorization to open its Champs-Elysées flagship on Sunday, but the luxury house circumnavigated the problem by adding a museum atop the store.

Cultural destinations are allowed to open Sunday, but union representatives tried to block Vuitton from doing so, setting off a battle Vuitton finally won.

Since election of the right-leaning government of President Nicolas Sarkozy, many hope for change and more liberal laws.

Legislation now is being examined by the parliament to relax some of the strictest laws regulating retailers, including opening hours and the right to put merchandize on sale. The legislation also would allow retailers to open big stores without having to go through red tape.

Though the results are sure to be clouded with compromise, most retailers see a glimmer of hope ahead.

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