With European consumer confidence dampened by the region’s ongoing debt woes, organizers of Paris’ leading trade shows are pulling out the stops to make their offerings more focused and creative.
This story first appeared in the July 26, 2011 issue of WWD. Subscribe Today.
Consolidation is the name of the game, following the acquisition of Sodes — the company in charge of Prêt à Porter Paris, Atmosphère’s, The Box, LivingRoom and now-defunct The Train — by Paris-based WSN Développement, which runs the Who’s Next and Premiere Classe shows.
In addition, Paris Capitale de la Création, or Paris Capital of Creativity, the collective that groups the French capital’s leading trade shows and events, this season welcomes three new members — Mess Around, Sixty Days and Paris Design Week — bringing its total up to 22.
Etienne Cochet, president of Paris Capitale de la Création and managing director of trade show organizer Safi, said all these new developments were aimed at making Paris a more competitive venue for trade shows.
“I don’t see any growth in the size of the overall pie for consumer goods, but the effectiveness of French trade shows in the fashion and home consumer goods sector is clearly on a growth path when compared with the general environment,” he said. “Now that all the French are on the same page, that can only be a very good thing.”
Cochet, who also runs the Maison & Objet trade show, said the first edition of Paris Design Week, scheduled to take place from Sept. 12 to 18, was a good example of how to energize buyers in a difficult economic climate.
Timed to also coincide with France’s Journées du Patrimoine, or Heritage Days, on Sept. 17 and 18, the week-long event represents an investment of 500,000 euros, or $700,000 at current exchange.
“Bearing in mind that stores make 40 percent of their annual revenues between October and December, if we organize very high-impact promotional events like Paris Design Week in our sector at the beginning of the season, it can only help boost sales,” he said.
In the clothing and apparel segments, the focus is more on streamlining the offer. Prêt à Porter Paris, for instance, will group ready-to-wear on one floor and accessories on another, and is whittling down the total number of sections.
“These streamlining efforts can only improve buyers’ perception,” Cochet said. “We are not going to change the sales figures of their stores, that’s for sure, but at least rationalizing the offer when they arrive at our trade shows to buy their products is a step in the right direction.”
The fall editions of the trade shows will take place in a context of slowing growth across the Eurozone.
The 17-member single currency area saw gross domestic product (GDP) rise 0.8 percent in the first quarter, thanks largely to a 1.5 percent rise in Germany, but the pace of growth has slowed in the second quarter, said Chris Williamson, chief economist at financial information services company Markit.
He expects Eurozone GDP to grow by 0.5 to 0.6 percent in the second quarter, but with very sharp differences between core nations like Germany and France, and so-called peripheral nations like Portugal, Spain, Italy and Ireland, which could see their economies contract due to the impact of government austerity measures.
“In the second half of the year, it’s going to be a case of watching very closely to see whether the uncertainty caused by the problems in the periphery cause consumer and business confidence to weaken further in the core and cause a further slowdown,” Williamson said.
He noted that in Spain, for instance, one in five working- age adults is unemployed. “People are going to be very cautious with what money they do have, tending to buy essentials rather than luxuries, and trading down wherever possible to save money,” he said.
France is already showing signs of fatigue.
Retail sales fell for the first time in four months during June as customers stayed out of stores, even as retailers faced growing pressure on their margins from rising input costs, according to the monthly Retail PMI survey for France produced by Markit and based on a panel of 300 retailers.
The summer sales, which kicked off on June 22, went off with a whimper rather than a bang. Sales of clothing and textiles fell 6 percent during the first two weeks of the sales, with footfall down 3 to 5 percent during the period, said the French Institute of Fashion (IFM).
In June as a whole, clothing sales rose 12 percent, with department stores recording a 34 percent jump in sales. But independent multibrand stores continued to lag, and their owners fear a sharp drop-off in sales once July figures are tallied, owing to poor weather and the start of summer holidays, the IFM said.
Mindful that these independents are facing increasing competition from fast-fashion chains, Prêt à Porter Paris is putting the focus on what it has dubbed the “heart of the market” — casual chic brands in the contemporary and midrange segment.
“Buyers need to be reassured about the brands they are purchasing,” said Muriel Piaser, exhibitions director for Prêt à Porter Paris.
“Today, buyers are looking for products that are both creative and high quality, at a reasonable price. They are scared of fast fashion,” she said. “If you look at a buyer for a multibrand, or a catalogue retailer or a buying office, they need to find added value in the product they are buying, and that is the role of the trade show today.”
Piaser said the onus was on the show’s organizers to present a “realistic” vision of the types of products on offer, so while trend watcher Alexandra Senes will be highlighting spring-summer trends and art directing the fair’s fashion shows, two-thirds of the products on offer will be what Piaser dubs “slow wear” — pieces that are on trend yet have a timeless element.
Eclat de Mode-Bijorhca, meanwhile, is betting on specialization. Rather than spreading out into related categories like accessories, it is putting increased focus on precious jewelry with an expanded Gold by Eclat de Mode gold jewelry section.
“We are fending off the economic gloom because when in doubt, people always have a tendency to consult a specialist,” said Richard Martin, deputy director and artistic director of the jewelry salon.
The trade show is expecting around 500 visitors this season, roughly equal to the 490 at the same time last year, he said. “It’s been a long time since we had so many exhibitors in September, whereas all the trade shows last January were pretty slow, at Porte de Versailles at least,” he said.
Despite economic uncertainty, women continue to buy jewelry at all price points, he said. “It’s the same as with clothes: These days, women wear their Prada handbag with a pair of jeans from H&M,” Martin noted.
Popular items range from slim precious jewelry by the likes of Vanessa Tugendhaft or Perle de Lune to the costume jewelry creations of Philippe Ferrandis, who will celebrate the 25th anniversary of his brand with five limited edition necklaces inspired by the world’s continents.
Nonetheless, Martin noted that the strength of the euro against the U.S. dollar was dissuading American buyers from attending the Paris trade shows. And economists say even those from within the Eurozone are faced with dwindling spending power.
“Euroland retailers face a difficult year. Households face a number of headwinds that will curb their enthusiasm to hit the high street,” said Melanie Bowler, economist at Moody’s Analytics.
Those challenges include persistently high unemployment, fiscal tightening and the rising cost of essentials like home heating, gasoline and food, at a time when wage growth is restricted, she noted. “The combination of rising taxes and reduced welfare spending suggest discretionary spending will be particularly weak in the most fiscally troubled countries in the Eurozone.”