PARIS GRINDS TO A HALT AS A SURGE OF STRIKES PUTS BUSINESS IN CRISIS
PARIS — Call it Parisian paralysis.
Fashion houses, retailers and beauty manufacturers have been hit hard by a wave of strikes that enter their third week Thursday and have brought the city to a near standstill.
Business has plummeted by 50 percent for many designer boutiques and department stores as the strikers, at odds with the French government’s planned austerity program, have succeeded in stopping all subway, train and bus traffic in the country.
Weekday mornings have seen record-breaking traffic jams, with cars backed up hundreds of miles on the roadways in and around the country’s capital. The latest record, set on Tuesday, was 385 miles of bumper-to-bumper traffic.
Mail has slowed to a trickle, air traffic has been disturbed, power outages have been reported, taxis are threatening sympathy strikes and service has slowed to a minimum at Paris hospitals.
In addition to the disaster at retail, many design studios — faced with couture shows a mere month away — are seeing significant slowdowns in production due to low worker turnout.
“The strikes have affected fashion like the rest of French industry,” said Jacques Mouclier, president of the Chambre Syndicale. “All of France is paralyzed. It’s going to be impossible to continue like this.”
Pierre Berge, president of Yves Saint Laurent, echoed the opinion of many when he suggested the strikes are a direct result of a government that poorly communicated its budget agenda to the French.
“I’m not too concerned about the impact on our business for the moment,” Berge noted. “But if it continues — that’s something else.”
While some in fashion here are trying to downplay the drama, most are alarmed about how long the strikes will last.
Almost everyone has been forced to find resourceful ways to keep working or keep stores going. Paris fashion firms are being flexible about employee hours, helping workers organize car pools, putting them up in hotels and even encouraging company slumber parties.
This week, to help solve the transport problem, Paris hired 1,700 private buses to link the city and the suburbs and 16 bateaux mouches were requisitioned to ferry commuters up and down the Seine.
Emanuel Ungaro, who canceled a trip to Monday’s Metropolitan Museum of Art gala in New York because of the lack of workers in his couture atelier, noted, “It is one month before the haute couture collections and we have about 50 percent absenteeism in the atelier. They’re doing their best, but it’s very difficult. Even when they get to work they are tired and nervous due to all the difficulties.
“I hope the situation will resolve itself soon, because I don’t know how long we can go on like this,” Ungaro added.
A spokesman for Christian Dior said, “Last week, Mr. [Gianfranco] Ferre could not do all the patterns he wanted to do because there were just not enough workers.”
A Dior spokeswoman later suggested, “It’s gotten worse since Friday. Last week, one-third of the atelier was absent. Now, its more than half.” The spokeswoman also noted that many employees are getting up at 4 a.m. and leaving before 2 p.m. Dior has organized car pools and is supplying taxis for employees.
“Half the staff of the haute couture atelier are spending several hours to get to work, so productivity has been affected,” said a Chanel spokeswoman.
“Traffic in the boutique has dropped,” she added, while declining to estimate how badly. She added that the Cruise catalog was sent out at the end of last month, and stranded Chanel clients, referring to the pictures, have used the catalog to reserve by telephone. “They say they will come in to try them on whenever this is over.”
Didier Grumbach, president of Thierry Mugler, noted, “The crisis is not too dramatic yet because we are between seasons. If it lasts 15 days longer it will be catastrophic.”
Grumbach explained that employees arrive and leave whenever they can, and that the house is planning to reimburse hotel costs.
“People are not coming to shop, and employees are not coming to work,” lamented Sonia Rykiel.
“Everything is backed up, deliveries are late, and suppliers are not coming to see us.” Rykiel suggested that her visible Left Bank location has made her situation more dramatic. “In St. Germain, we are surrounded by demonstrations every day,” she said.
“Designers are influenced by the times they live in, and these are pretty sad times,” Rykiel added.
At Lanvin, president Gerald Asaria said the company is putting up 50 atelier employees in nearby hotels. “Even if it costs the company money, we don’t have the choice.”
Asaria also noted that many employees are leaving home at 5 a.m. and congratulated his staff for trying to keep up morale during trying times. “Every day is a surprise,” he said, “and up to this point not pleasant ones.”
Smaller companies have been particularly vulnerable, including designers like Jean Colonna, who has shut down all production since last week, but some of the hardest hit have been department stores. Galeries Lafayette, where the main floor is usually swarming with shoppers in the weeks leading up to Christmas, was practically empty Friday. The lack of traffic continued through the weekend and sales were 35 percent to 40 percent less than the same weekend last year, according to a store spokesman.
Weekday sales have plunged 30 to 50 percent against 1994. Employees have organized car pools and the store has set up a bus service that makes round-trips between its warehouse in St. Denis, a northern Paris suburb, and the flagship store on Boulevard Haussmann. At the Au Bon Marche department store on the Left Bank, weekday sales have been down an average of 40 to 45 percent, according to a store spokeswoman. Last weekend’s sales, however, fared better and were down only 25 percent, thanks mainly to the store’s neighborhood customer base. “But a 25 percent decrease is significant,” the spokeswoman said. The store is taking many steps to help employees get to work. Starting today, the store has rented private buses to transport employees from key locations in and outside of Paris to the store. A stock space was set aside to store workers’ bicycles, and employees who normally come to work by public transportation are being reimbursed for all costs of other forms of transportation, including taxi fares, gas charges and parking fees.
For employees who have no means to get to work, Au Bon Marche is putting them up in Paris hotels.
At Hermes’s Faubourg St. Honore flagship, traffic is down among French and international clients, but not significantly, said Patrick Thomas, managing director of Hermes International. “It’s only been in the last few days that we have seen the decreases,” Thomas noted. “We have no concrete [comparative] figures yet.”
Hermes stores outside of Paris are not suffering at all from the strikes. And, thus far, the company’s production sites for everything from silk scarves to porcelain are on schedule for their manufacturing and delivery dates.
“It’s really not too difficult for us right now. After all, France represents less than 30 percent of total sales, and the Faubourg store is only one-seventh of international sales,” Thomas said. Agnes B. reports that sales in the company’s Paris stores and its shop-in-store locations at Galeries Lafayette’s Paris sites are down roughly 35 percent against the same 10-day period last year.
The company has bought 17 bicycles to help saleswomen get to their Paris stores and is prepared to buy more if needed, said Etienne Bourgois, the company’s managing director and son of founder Agnes B.
In France, and other European countries, Agnes B. delivers weekly to its stores and other sales points, while in Paris, deliveries are several times a week. The company has replaced normal freight service with private trucking companies. So far, there have been no delays, according to Bourgois. At Kenzo, sales are down in its eight Paris stores, with decreases similar to those of other Paris boutiques, noted Jean-Pierre Debu, the managing director of Paciflor, Kenzo’s ready-to-wear division. The company is trying to accommodate atelier workers who are having trouble getting to and from the offices. Debu spent most of Tuesday morning reserving hotel rooms for 10 atelier hands in the hopes of keeping production on schedule.
“We are not late, but we are certainly not early,” Debu said.
At Celine, Nan Legeai, chairman and chief executive officer, said, “I feel really lucky that everyone is showing up for work. They are so devoted. Some in the atelier have to walk two hours each way to get to and from the office.” Celine gave employees a day off last week as compensation for their trouble, Legeai said.
“If the strike is short term, then it’s no big deal if our sales in Paris are off,” she explained. “But if it continues — and no one knows when it will end — we might have to revise our 1996 budget figures. Thankfully 80 percent of our sales come from export.”
Junior sportswear retailer Naf Naf, which owns some 160 stores across France, reports that overall sales have not been severely affected by the strikes. “While sales in our Paris stores are down, they are being compensated by increased sales in suburban shopping centers just outside of Paris and in other cities across France,” said Francois Mathieu, Naf Naf’s financial director. Mathieu said last week’s overall sales were up slightly.
So far, store deliveries have also been unaffected by the strikes. The company could face difficulties, however, if it is forced to call upon trucking companies, which have threatened to join the strike, for deliveries to non-Parisian stores. With mailbags piling up around the country, catalog companies would seem to be obvious victims.
La Redoute, however, France’s largest mail-order house, said sales had not suffered as a result of the strikes. In fact, La Redoute launched a highly publicized overnight delivery service on Nov. 25 with a money-back guarantee if goods do not arrive on time. A spokesman said that the program was running smoothly because orders were taken by phone, not mail, and because the deliveries were handled by Redoute’s independent shipping division. “We’ve had a few cases where the trucks pulled up with less than 10 minutes to spare because of traffic, but so far we’re meeting the deadline,” he said. However, at the mail order beauty company Yves Rocher, which depends on the French postal system for distributing its monthly mailings as well as products ordered, the news is disastrous: Orders have plummeted 90 percent since the start of the strike.
Christian Delaigue, director of communications at the company, attributed the sharp decline to the fact that Rocher’s four million French customers have not yet received their Christmas mailing. He said the company is considering alternative promotional tools, including a radio campaign, that could be put in place as early as this week. Meanwhile, at Rocher’s stores, traffic and sales are about the same as last year, with the exception of those stores near metro stops or train stations, he said.
Elsewhere in the beauty industry, manufacturers report few problems with absenteeism, thanks to hotel rooms for those who live farthest away, employee slumber parties and car pool arrangements. L’Oreal last week set up an office at its Clichy headquarters to coordinate car pooling, and so far 250 employees have volunteered to drive others to work. The company has also provided buses between some locations. However, many manufacturers are running into problems with invoicing and deliveries.
“We’re having a hard time getting shipments to stores — it’s slowing down business,” said Nancy Flavin, director of sales for fine fragrances at Procter & Gamble in France. She estimated that P&G’s fine fragrance sales were 30 percent under target since the strike began. Everyone agrees that the hardest hit are the perfumeries, especially those in Paris.
“It’s catastrophic,” said Christian Leroux, president of the Empreinte chain, with nine stores in and around Paris. “Overall, we’re down 70 percent [since the beginning of the strike] with respect to the same period last year.” Others also reported declines at their Paris stores. For the most part, retailers were worried, but not panicked — yet. “Everyone knows that people shop right before Christmas. We’ll make up most of the lost business, but not all of it,” said Eric Bourriot, associate director in charge of communications at the Parfumerie Kleber chain with 25 stores, 14 of which are in Paris. Bourriot said that he even drove a truck to Brittany last weekend to deliver two weeks’ stock to stores in Vannes and Lorient. Outside of Paris, retailers said business was off slightly because demonstrations by students and rail workers had kept people out of city centers. They said that stores in shopping centers were less affected than those in the centers of town. Meanwhile, things are starting to look grim for duty-free operators at airports. According to Pierre Fayard, director of marketing for Aeroboutique France, a chain of duty-free airport concessions in France, sales of fragrances and cosmetics at the Orly Sud International Terminal in Paris were up an estimated 8 percent for the first 20 days of November. But since then, they have been flat.
However, calls for strikes on Thursday, Friday and Saturday by unions representing flight attendants and air traffic controllers at Air France and the domestic carrier, Air Inter, will worsen the situation at the airports. If the strikes are not resolved soon, all of France could be headed for a nosedive.