PARIS — France’s textile industry is feeling the pressure of the economic downturn, with a number of fabric mills and apparel subcontractors hit with shrinking orders, lowered margins and depleted balance sheets.

This story first appeared in the May 19, 2009 issue of WWD. Subscribe Today.

Experts predict the industry could stand to lose up to 15 percent of its skilled workforce this year due to layoffs, with many firms implementing partial short-time working.

Some luxury brands are said to have reduced production volumes by up to 40 percent, with certain houses editing out local suppliers or mulling delocalization, though since the Eighties a number of fashion brands here have already moved production abroad.

“For 14 years until October 2008, I was refusing work. Now I’m desperate for orders,” said Jean-Pierre Bernard, director of artisanal producer La Ferté Confection, which is based in Normandy and employs some 90 people.

Bernard said Louis Vuitton planned to trim La Ferté Confection from its supplier network and that represented around a quarter of its business. Orders are down by as much as 40 percent for the firm, where remaining clients include Chloé, Thierry Mugler and Andrew Gn.

Laurent Vandenbor, managing director of Ouest Mode Industrie, which represents a network of textile firms based in the west of France, a region specializing in luxury women’s wear, said a number of brands from big luxury groups are out to reduce the number of suppliers, as well as the size of their orders.

Its members represented around half of the exhibitors at the recent Made in France by Fatex Paris trade fair, dedicated to high-end French artisans and subcontractors spanning leather goods makers to clothing manufacturers. Each exhibitor owns at least one production site in France, employing a minimum of 10 employees, and has the right to use a “Made in France” label on their products.

During a recent visit to textile firms in the north of France, Luc Chatel, France’s secretary of state for industry and consumer affairs, stressed the importance for the government and for the national economy of maintaining and developing the country’s textiles sector, with certain government-backed initiatives said to be under way to support it.

However, the outlook for many French textile producers looks bleak. Roland Poulet, chief executive officer of Avelana, a specialist in wool blends that was established in 1947, said he knows of few mills in robust health.

“There’s an enormous break in confidence from the banks and insurers who no longer want to deal with textiles firms,” Poulet said. “We’ve never seen anything like this.”

Even those few French mills immune to the malaise are concerned for their security in view of the increasingly frail state of certain suppliers in the chain. Citing “exceptional” growth, with business up 15 percent, Guigou, one of the country’s few remaining luxury jersey mills, plans to establish an in-house finishing department, for example, in order to help guarantee its future. The firm services a number of players from the couture domain.

“[France’s] thread dyers are in an extremely fragile state and we’re trying to secure year-long contracts with our wool suppliers, many of which are based in Italy,” said a spokesman for Guigou.

With successive crises having already weakened a number of links in the chain here, such as spinners, the country’s finishers are in peril, observers said.

The lace industry here is also in a delicate state, with certain firms reporting order declines of up to 50 percent for fall, notably from U.S. clients.

Last October, Noyon, faced with competition from Asia, had already shifted a large part of its production to its factory in Sri Lanka and entered into financial administration for an initial period of six months.

“We’re getting ready to reduce our structure,” said Cécile Boury, commercial director at Sophie Hallette. “It’s a very critical situation, but for how long we don’t know.”

Founded at the end of the 19th century, the firm’s laces are produced, dyed and finished in France, except for certain designs requiring handiwork from Indian ateliers. Boury cited the bridal market as one of the lace industry’s few buoyant areas, with luxury also showing resilience.

“Our main target is to get bulk orders from customers,” she said. “We’re still working with the main names, it’s just that quantities are lower.”

Mills say the crisis has forced them to push creativity and quick response, with many intensifying brand exclusives. This season, Sophie Hallette developed an exclusive metallic lace for Zac Posen, with a number of similar projects in the pipeline for spring.

“The only companies who know how to make Leavers lace are in Calais,” said lingerie designer Chantal Thomass. “Other laces are frankly less beautiful. It would be tragic if lace were to disappear.”

Boasting years of experience, certain mills here are scrambling to readapt their services to today’s increasingly intense production cycles in an attempt to secure ties with their clients.

“Companies are adapting to new rhythms and trying to be more reactive,” said Brigitte Le Gal, director of export and promotion for France’s textiles industry union. “They’re in a state of flux. [Trade shows] are being pushed forward, so it’s a race to get collections ready. Clients [drag their feet] on orders, then expect them to be delivered quickly, but at a certain point one cannot compress time any more.”

Christophe Hebben, who in 2007 acquired the struggling 80-year-old Lyonnaise silk mill TBM Soieries, that counts the likes of Yves Saint Laurent, Chanel and Paul & Joe among its clients, said, “The only point is to bring the customer flexibility and reactivity. We need to be younger and younger, nothing should be static, everything has to be done in shorter pulsations with a view to evolving.”

And even as the industry faces significant challenges, it continues to attract young entrepreneurs determined to find their place.

Yann Biville, a former export director at the Hermès-owned Bucol, for example, recently acquired Belinac, a 127-year-old silk linings supplier to the likes of Lanvin, Nina Ricci, Dior and Givenchy, with a view to expanding distribution.

“I’m young but I don’t have the pretension to claim that I can do better,” Biville said. “The new thing I can add is export. My predecessor didn’t understand that.”

He predicted things will be “revolutionized” over the next couple of years.

“Distribution will be questioned, it’s a question of survival,” he said.

Companies are testing a variety of strategies for getting through the downturn. Ouest Mode Industrie’s Vandenbor said his region’s firms are brainstorming ways to work with brands more at the conception stage of designs in order to further tighten production cycles.

Others are implementing intensive training programs for their staffs, or are forming partnerships. The last three to four years have seen a number of mills from the Lyon region strike up partnerships with subcontractors from Italy’s Como district, for example, according to Karin Güllering, market director of Espace Textile, which consults and promotes textile firms based in France’s Rhône-Alpes district.

Depleted of funds, several firms have gone bust or are being taken over, she said.

“We are at the bottom of the wave,” Güllering said. “They say the future of Europe is innovation, but these firms have no funds. Margins are necessary to invest in machinery and research and development. Developing new fabrics costs a ton of money.”

Certain mills are branching out to new sectors such as architecture or the automobile industry, for example, with several firms tapping into the uniforms sector.

Examples include TBM Soieries, which recently developed a fabric lining for the glass roof of a new museum, and Sofileta, a nanotechnology specialist that has branched out into techno skiwear. Porsche is even said to be considering using lace for its cars.