PARIS STORES: PARTIAL RECOUP POSSIBLE FROM STRIKE LOSSES

Byline: Katherine Weisman

PARIS — With public transportation almost fully restored throughout France, retailers are looking anxiously to this last weekend of Christmas shopping.
But they won’t fully recover the losses incurred during the strikes. This is especially true since a handful of retailers, including Galeries Lafayette and Printemps, are being prevented from opening this Sunday by the Prefecture of Paris.
While Paris Mayor Jean Tiberi encouraged Sunday openings to recoup lost sales, the Police Department is only authorizing stores that have not used up their annual quota of five Sunday business days per year.
Since last Sunday, Paris retailers saw business pick up, and the trend has continued. Throughout the strikes, Paris stores saw daily sales losses of up to 50 percent compared to the same days in 1994.
Retailers outside Paris fared better since customers circulated more easily in their cars.
“The strike affected us very severely. When we do 40 percent less in December, the profit for the year is significantly hurt,” said Philippe de Beauvoir, chairman of the Left Bank department store Le Bon Marche and the Franck et Fils specialty store in the posh 16th arrondissement. Both stores are controlled by luxury tycoon Bernard Arnault.
“What surprised me the most is that we didn’t have a rush into the store” once the transportation was restored, de Beauvoir observed, adding that putting the effect of the strikes aside, French consumers are just not buying.
“I now think that the first semester of next year will be very bad, and that sales will be down compared to the same period last year.”
Both stores extended their shopping hours for this week with everyday night shopping hours, and both will be opened this Sunday. “For Le Bon MarchA, it’s our fifth Sunday,” de Beauvoir noted, adding that Franck et Fils experienced the same kinds of sales difficulties as its larger sister store. Le Bon MarchA also took some markdowns mainly on winter fashions, “but even promotions don’t incite the clients to buy.”
Sales for the month of December will be down 25 percent compared to December 1994, and sales for the full year are expected to be flat with last year’s total of $258.8 million (1,294 billion francs) according to de Beauvoir, who did not disclose profit estimates.
Galeries Lafayette executives saw some improvement. “Already on Sunday, we started to see a positive evolution,” said Jean-Michel Hallez, director of Galeries’ flagship store on Boulevard Haussmann. “Starting Wednesday, we and the other department stores reached the same level of volume as we did for the comparable period last year. But that’s expected since the transportation has been relatively restored. We are in the center of Paris sitting on top of the station servicing four metro lines, a couple of RER (suburban train lines), and we’re a quick walk from the Gare St. Lazare train station. Without this transportation, of course, our sales suffered.”
Hallez warned, however, that the current uptick won’t recover the sales lost since Nov. 24, when the strikes began. To entice buyers, Galeries launched a radio ad campaign and extended a 30-percent-off promotion offered to Galeries Lafayette cardholders. These steps did help, Hallez said. While the flagship’s retail sales were up about 2 percent in the first half, Hallez expects them to be down 2 to 4 percent for the year, compared to about $700 million (3.5 billion francs) last year. Hallez noted that November and December sales generally account for about 25 percent of annual sales.

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