PARIS — “I’m not going to mince words: This tax is pure robbery,” said Sophie Primas, president of the French Senate’s economic affairs committee, concluding a three-hour-long discussion about the future of the fashion industry and related crafts in the upper house of the French Parliament this week.
Primas plans to submit an amendment to a planned measure in the 2019 French budget that would slap a 7 percent tax on voluntary company contributions to a fund supporting the fashion and luxury goods sectors.
More than a dozen industry players have criticized the plan, which is being debated by France’s parliament ahead of a vote on Oct. 23, although the Fédération de la Haute Couture et de la Mode — French fashion’s governing body — has so far remained silent on the issue.
Speakers at the packed seminar included Guillaume de Seynes, executive vice president of the manufacturing division and equity investments at Hermès International; Pascal Morand, executive president of the Fédération de la Haute Couture et de la Mode, and Pierre-François Le Louët, president of the Fédération Française du Prêt à Porter Féminin.
Le Louët was among the industry officials who signed an open letter in the French daily L’Opinion, timed to coincide with Paris Fashion Week, urging the French government to rethink its budget plan on the grounds that it would “threaten the whole ecosystem of the industry.”
They are worried in particular about cuts to the budget of the Comité professionnel de développement et de promotion du textile et de l’habillement, or DEFI, which helps to support emerging designers and promote French fashion overseas, among other things.
Many expressed surprise at what they saw as an about-face in government policy after French President Emmanuel Macron expressed his support for the fashion industry by inviting leading designers and executives to a high-profile dinner at the Elysée presidential palace last March.
“We’ve come to the Senate to bring together all the federations, including those who haven’t yet spoken up about the issue,” Le Louët told WWD. “We’re here to tell the government it needs to support the fashion industry.”
Speakers stressed the weight of the French fashion industry, which accounts for 1.7 percent of the country’s gross domestic product. “The six Paris fashion weeks alone generate 1.2 billion euros in revenue per year,” de Seynes said. “France has an absolute leadership in the sector, but we need to do everything we can to maintain that leadership.”
Funded by voluntary contributions paid by luxury brands, the DEFI supports 550 businesses, including the smaller “métiers d’art” houses. The proposed budget would take a 631,000-euro chunk out of its total budget of 10 million euros.
“The DEFI has been a real help in the development of our brand,” said Gilles Elalouf, chief executive officer of Y/Project, which generated revenues of 6 million euros in 2017 and employs 20 people. “It would be a shame to lose this support and have to turn elsewhere. Our team is very international and flexible.”
The Centre Technique du Cuir, or CTC, which promotes the leather industry, would also be hit. Its president, Frank Boehly, said it stood to lose 800,000 euros in funding this year. “We’re able to collect relatively important sums for our industry with the total support of companies, which is quite extraordinary,” he said.
“They agree to this tax because they know it’s a long-term investment. The state has now arbitrarily decided to limit this tax collection and to divert a portion of it to the national budget, something which was in no way planned,” he argued.
Primas said she would raise these concerns once the budget plan reaches the Senate. “This voluntary contribution should be [applied] to your activity, your training, your export. In my opinion, redirecting it to the state instead should be declared unconstitutional,” she said.