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French Firms Turn From Supermarkets to Specialty Stores

French women, accustomed to purchasing their lingerie in the supermarket aisle, France's top sales channel for innerwear, are turning to more intimate retail environments.

PARIS — French women, accustomed to purchasing their lingerie in the supermarket aisle, France’s top sales channel for innerwear, are turning to more intimate retail environments.

Specialty lingerie chains recorded 20.2 percent of total lingerie sales in France in 2006, according to the latest statistics compiled by the French Fashion Institute, or IFM. That’s a big step up from when chains first hit the retail scene here in the early Nineties, then representing around 6 percent of sales.

“Chains have made a spectacular advance,” said Nathalie Gennérat, head of research for the lingerie market at IFM. “Their presence is a real menace to both independent boutiques and supermarkets.”

Gennérat listed Etam, Darjeeling, Orcanta, Body One and Princesse Tam Tam among the country’s leading specialty chains, with Etam “a long way out in front.” According to IFM, French women over age 15 spent 2.5 billion euros, or about $4 billion, on lingerie in France in 2006.

Specialty chains have been aggressively expanding in Europe to grab a bigger slice of the innerwear pie. Etam, which operates 279 stores and shop areas in France, with 123 franchises abroad, opened 90 stores last year, of which 20 were in France and the remainder mainly in Eastern Europe and the Middle East.

“We’ve been focusing on emerging countries, as the Anglo-Saxon markets are too saturated,” said Judith Sebban, head of Etam’s investor relations.

Aside from supermarkets in France, fashion chains such as Hennes & Mauritz are considered the sector’s main competitor, churning out bargain bras and panties. As a result, Etam introduced its own low-budget label last fall called Undiz that specializes in young mix-and-match fashion sets. The brand, which now has five stores in shopping malls around Paris, will initially be developed across France, Sebban said.

“It’s important to have all of the price points covered,” she added, explaining how store renovation, merchandising, evolving product offerings and innovative concepts, such as mother-and-daughter lingerie sets, are among the firm’s strategies for maintaining business growth.

“We create very theatrical window displays and have also increased our advertising budget to ensure visibility on billboards and in fashion magazines,” she said.

This story first appeared in the April 14, 2008 issue of WWD.  Subscribe Today.

Other specialty chains raising their profile in the French market include Cannelle, Soleil Sucré and Secrets Dessous.

“Despite France’s small [market] size compared to the U.S., there are a lot of retail chains that are being developed,” said Jos Berry, president and chief executive officer at Concepts Paris, a trend forecasting firm.

Women’Secret, part of the Spanish textile giant Cortefiel’s portfolio, entered France at the end of 2006 as part of its plan to bolster its international franchise network that has more than doubled since 2005, totaling 179 stores. Counting 456 points of sale worldwide, the brand owns four stores in France, one franchise and several shop environments. Emulating its compatriot fashion chains such as Zara and Mango, the brand’s formula involves turning around a new collection every two weeks, overseen by in-house design teams.

According to IFM’s Gennérat, figures gathered so far from 2007 suggest the advance of specialty chains might have hit a plateau, because of intensifying competition and ownership changes. Acquisitions have included Princesse Tam Tam by Japan’s Fast Retailing Co. in 2005, the French lingerie chain Orcanta by French leader Chantelle Group in 2006, as well as the acquisition of Lejaby by the Austrian innerwear manufacturer Palmers Textil AG in 2007.

Upon signing the deal, Palmers Textil AG executives outlined plans to unfurl a network of multibrand stores across Europe that will unite the Palmers, Lejaby and Rasurel swimwear brands.

“In terms of competition [among chains], we’re now talking about those firms that have buying power on an international scale,” said Berry, noting that Women’Secret has plans to break into northern Europe, starting with Belgium and Holland.

With department store private labels in the U.K. continuing to take a bigger share of the total market, specialty chains have yet to break through in that market. In 2007, 51 percent of British women shopped at Marks & Spencer for lingerie and hosiery, according to a report by Mintel. Jumping to the second spot from fourth place was the low-budget fashion chain Primark, which generated 25 percent of overall lingerie sales. The country’s specialty chains, including La Senza, Knickerbox, Ann Summers and Agent Provocateur, fared less well, falling below 12th place in Mintel’s ranking.

“I presume women here view specialty stores as too expensive. Geographically, they’re generally less accessible than supermarkets or department stores,” said Katrin Magnussen, a Mintel analyst.

Meanwhile, mass market behemoths and multiplying specialty chains in France are squeezing out the traditional lingerie boutiques.

“Women [here] know that they can find pretty French lingerie in supermarkets, which is not the case elsewhere,” Berry said.

However, a new generation of multibrand boutiques, featuring fresh merchandising concepts and savvy brand choices, is helping revive the sector’s independent channels, according to IFM’s Gennérat.

“They have a very modern approach to their displays and choice of brands. A lot of them have popped up in the big cities, especially around Lyon,” Gennérat said.

Over the past two years, online purchases of lingerie have also steadily progressed, representing about 3 percent of the market, on par with online clothing purchases. The evolution from independent retailers to a new landscape of chain stores has also prompted a number of lingerie brands to establish their own distribution channels.

For example, Chantelle is embarking on an aggressive retail plan and has opened four freestanding stores in France since last September. There are plans for a network of stores across France and beyond in the coming years, according to company officials. The new boutiques showcase Chantelle’s signature lingerie and loungewear lines, as well as a cosmetics bar stocked with the brand’s new range of body creams, candles and bath oils.

“It’s important to create a universe geared to service,” said Emmanuelle Voisin, Chantelle’s brand director, adding that customers can book one-on-one appointments with fitting specialists. “To build a strong brand image, you need your own boutiques. It’s a good complement to the distribution network.”

Laure Arnold, brand director for Princesse Tam Tam, said “For us, it’s very important that we were one of the first [brands] to create our own boutiques. It has reinforced our universe.”

The brand has 90 boutiques in France, with an added 23 franchise stores, as well as 10 stores abroad. It is looking to open three stores in France during the next three months, along with three units in Belgium and a second German store, in Berlin.

“We’re looking to position ourselves as a lifestyle brand, incorporating [fashion-forward] mix-and-match loungewear pieces,” Arnold said.

Other major brands such as Eveden, Triumph, Intimas, Aubade and Simon Perele are said to be mulling their own retail networks.

“It’s a global trend that brands who have a strong financial footing are looking at how to take control of their distribution,” Gennérat said. “Brands are looking for durable distribution solutions, but an important financial capacity is required to go head-to-head with the chains.”

Berry said, “Brands have two solutions: open their own stores or grow exports.”

However, she cautioned that retail ventures for brands that target a specific core segment is risky.

“With lingerie, it’s important to appeal to both the grandmother and the granddaughter [in one space],” she said. “Otherwise, the traffic will not be enough. Even Victoria’s Secret knows that with lingerie, you can’t be too precise.”

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