The following research report contains market research, analysis, statistics and business intelligence relating to research on Retail Industry In France.

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ABSTRACT
The economic recession of the last 3 years in France has been particularly difficult for the entire textile industry, and especially for apparel. The franchise market, however, is attempting to resist this trend by offering a large choice of products in order to target as many customers as possible. In 1998, the French apparel franchise market was composed of 2,915 franchises representing USD 1,929 million. In 1999, 317 new franchises are expected to open in France (women's wear: 123; children's wear: 72; men's wear: 58; lingerie: 40; jeanswear: 13; sportswear: 11). Although the number of foreign franchises is low, they are growing at a steady rate (about 5 percent per year), and Italy is the leading country with the most important number of franchises in France followed by the United States, Spain, and Germany. French consumers are fashion conscious and like "American" styles and products. Therefore, there are good opportunities for U.S. apparel franchises to successfully penetrate the French market, especially in the sportswear sector. Please note that figures mentioned in this report refer only to official franchises and not to other type of partnerships, such as concessions, subsidiaries or licensees. A. MARKET HIGHLIGHTS & BEST PROSPECTS * Market Profile In 1998,the French apparel market was composed of 2,915 franchises, representing a 3 percent decrease compared to 1997. The apparel franchise network is divided into the following sectors: 1. Children's wear: ----------------------------------------------------------------- Names # of # of # of # of franchisees franchisees boutiques boutiques in France abroad opened in expected 1998 for 1999 ----------------------------------------------------------------- La Boutique de Florianne 8 5 2 - Camaieu 35 1 - - Catimini 60 59 30 15 La Compagnie 80 30 13 12 des Petits Dipaki 23 2 12 6 Jacadi 150 160 24 9 Marese 42 16 1 - Petit Bateau 16 6 11 10 Petit Boy 32 7 12 11 Tartine et 120 111 6 8 Chocolat 20 11 14 1
2. Men's wear: ----------------------------------------------------------------- Name # of # of # of # of franchisees franchisees boutiques boutiques in France abroad opened in 1998 expected for 1999 ----------------------------------------------------------------- Bruce Field 26 - 2 4 Cafe Coton 21 4 5 4 Camaieu Homme 27 - 6 16 Cerruti 8 45 3 - Dockers & Co 15 12 3 9 Eden Park 13 - 3 - Fer 7 22 2 1 3 Francesco Smalto 9 8 - 2 Mangas 46 41 5 4 McGregor 15 - 7 2 Olly Gan 23 - 3 3 Rodier Homme 19 4 2 2 Serge Blanco 36 1 3 4 Status 68 3 6 5 3. Sportswear: Chattawak 5 2 - 2 La Mode des Montagnes 28 4 4 4 New Man 45 11 5 5 4. Jeanswear: Blue Box 8 - 5 10 Levi's store 39 320 4 3 5. Women's wear: ----------------------------------------------------------------- Name # of # of # of # of franchisees franchisees boutiques boutiques in France abroad opened in 1998 expected for 1999 ----------------------------------------------------------------- Alain Manoukian 81 104 15 25 Cache Cache 18 - 9 15 Camaieu Femme 105 - 6 10 Caroline Rohmer 8 - 2 2 Carroll 5 37 31 15 Chacok 7 5 1 2 Devernois 83 43 11 10 Electre 11 - 1 4 Escada 7 - 4 - Georges Rech 38 11 10 4 Gerard Pasquier 11 1 3 6 Laurel 2 - 1 2 Marina Rinaldi 12 186 22 4 Max Mara 20 316 45 2 Motivi 52 52 1 1 Rodier Femme 54 105 23 8 Scottage 18 - 3 5 Sym 26 - 2 4 Weil 6 1 2 4 Weinberg 38 1 - - 6. Lingerie/Swimwear: Ci-Dessous 1 - 2 6 Janine Robin 13 - 2 4 Phildar 1,240 86 26 30 * Statistical Data In USD Millions 1998* 1999* 2000* Projected Avg. Annual Growth Rate For following 2 years _____________________________________________________________ Total sales 1,929.6 2,096.0 2,402.8 6 Sales by global French firms 1,800.0 1,960.0 2,260.0 5 Sales by foreign firms 129.6 136.0 142.8 5 Sales by U.S. Owned firms 3.8 4.0 4.1 4 Exchange Rates 6.0 6.0 6.0 *Estimated figures Inflation Rate Assumed: 2% 1998 Import Market Shares: Italy: 5 percent U.S.A.: 3 percent Spain: 2 percent Germany: 2 percent Sources: French Textile Newspaper (Le Journal du Textile) French Franchise Federation (F d ration de la Franchise) Receptivity code (1-5): 4 Range: 5 (extremely receptive) to 1 (not receptive) Over the past few years, French consumers have become very influenced by American trends. Therefore, there are numerous opportunities for U.S. apparel franchises to successfully penetrate the French market. * Best Sales Prospects The franchise sector as a whole continues to expand, while the apparel franchise market remains relatively stable. However, according to market specialists, sportswear franchises are expected to grow in the near future for the following reasons: Sportswear has diversified its original purpose and has become a large part of contemporary style. Today, in most cases, sportswear is being used as casual wear, such as windbreakers, sweat-shirts, T-shirts, shorts, or polo-shirts. In addition, capturing the spirit of today's urban lifestyle, sportswear is highly popular among teenagers living in large, urban areas. As a result, sportswear, with American logos, is extremely popular among teenagers, who are influenced by their favorite American television series. B. COMPETITIVE ANALYSIS - Advertising: One of the key factors in establishing a brand in France is to provide an adequate advertising budget. American companies should be able to effectively promote their image and reinforce their positions. New products should be aggressively marketed to appeal to French consumers and to influence their fashion preferences. For example, the media has a tremendous impact on French children. Music and television are influential at an early age. - Price: Price is always an important factor for consumers. Thus, companies should offer several lines of products at different prices to attract all type of customers. - Credit/delivery terms: Another important factor is the ability to offer credit terms and other ordering services similar to those of French competitors. Having a European warehouse facility is an additional advantage in meeting short-term delivery requirements. * Domestic Production The French apparel franchise network is composed of 57 franchisors. The women's wear franchise sector holds the most important share of the apparel sector, followed by the men's wear and children's wear franchise sectors. Over the past three years, the children's wear sector has experienced considerable growth with a high level of new openings: 72 boutiques are expected to open in 1999. In general, French companies have installed their manufacturing facilities in countries with lower labor costs (Portugal, Morocco, Tunisia, Turkey, and recently in Eastern Europe). * 3rd-Country Imports Italy is the leading country with the most important number of franchises in France (Max Mara, Marina Rinaldi, Cerruti, Francesco Smalto), followed by Spain (Mango) and Germany (Escada). * U.S. Market Position So far, the only U.S. apparel franchises in France are Levi's stores totaling 39 franchises in France, followed by Athlete's Foot with a total number of 20 franchises. Levi's store: The first boutique was opened in 1988. The consolidated sales volume for France was estimated at USD 64 million. The stores in France generally cover a surface of 1,110 square feet with 4 salespeople. Each store generates a sales volume of approximately USD 1.7 million. The start-up fee required is generally USD 200,000. In the case of Levi's store, the franchisee should also pay a participation in the advertisement representing 2 percent on purchasing prices (tax not included). Athlete's Foot: The first boutique was opened in 1996, and management reported a sales volume of USD 550,000 for 1998, while the consolidated sales volume for France was estimated at USD 12 million. The stores in France cover approximately 900 square feet and employ generally 3 persons. The start-up fee required is about USD 200,000. The success of these U.S. franchises can be attributed to the fact that French consumers are very receptive to U.S. fashion. Therefore, in light of the above, there appears to be numerous opportunities for U.S. apparel. C. END-USER ANALYSIS According to industry specialists, franchisors prefer candidates in their 30's because they seem to have the best work experience/ financial capacity ratio. In addition, young candidates generally are more motivated and more dynamic than older ones. Most boutiques cover a surface between 700 and 1,400 square feet and employ between 2 and 4 sales men/women. D. MARKET ACCESS * Import Climate There are no barriers for foreign-owned franchised companies in France. They are no quotas on imports of apparel manufactured in the United States. French importers pay VAT (Valued added Tax) at the rate of 20.6 percent on the CIF (Cost, Insurance, Freight) value on imported goods. They also pay customs duties of 14 percent when clearing goods through customs. * Distribution/Business Practices (please note that the following information is taken from the ISA on franchising dated November'98) Franchising agreements are subject to the laws governing commercial contracts and those governing sales or trademark licensing agreements in particular. Business practices are regulated by a Code of Deontology. This code was drawn up by the French Franchise Trade Association as the code of conduct for franchisors. It defines franchising, a franchisor, franchisee, network, and duties and obligations towards the consumer. The Doublin law of December 31, 1989 and its application decree of April 4, 1991 protect the interests of commercial networks in general, as well as the interests of the franchisor, his/her network, and potential franchisees. Decree no. 89-1003 requires that franchisors disclose operational information to prospective partners 20 days before signing a business contract in order to provide them with "full disclosure" before committing to contract. This information must include: - Duration and renewal conditions of the proposed contact, - Banking references, - CEO's resume, - Analysis of potential competition, - Company's performance over the last five years, - All network members, franchised and non-franchised, - A detailed financial plan for creating the franchised outlets, (expenses and investments) - A description of each product, - Estimates of anticipated financial return, - Number of companies that quit the network during the last year year, and why they did so. A franchise contract is drafted for an average duration of 3 to 5 years; 50 percent of all the contracts are renewed automatically, with the balance renegotiated prior to renewal. Usually, the franchisee pays royalties fixed by the franchisors. U.S. companies, however, should take into account the differences between the U.S. and French markets, especially when establishing the master franchisee fee. U.S. franchisors should understand that the price should not necessarily be based on the U.S. market. They should allow a margin of flexibility in their price, which would allow them to better adapt to specific French market conditions, i.e.: difference in real estate prices, and start-up costs in the retail business). * Financing In general, 50 percent of an outlet's initial investment is provided on a mid-to-long term loan basis; 30 percent is provided by personal contribution, supplemented by a short-term loan for the remaining 20 percent. When taking over a retail location, companies are often subject to a substantial start-up fee, or "fond de commerce", which is negotiable with the former occupant. This fee varies with the size and location of the establishment. The new leaseholder pays for the right to access the previous occupant's clients. French banking and financial activities have undergone changes during the past decade. Former restrictions, such as credit ceilings or foreign exchange controls, have been abolished. These changes have resulted in increasing foreign investors'interest in the French market, as well as that of financial institutions, which seek an operational presence. France is in a good position to provide full banking services to both local and international customers. French banks will generally lend 70 percent of the acquisition fee. If the franchise is well known, the loan may reach 100 percent. However, the franchisee needs to present guarantees. Banks provide a full range of basic services, documentary credits, standby letters of credit, letters of guarantee, bills of collection, acceptance financing, export/import pre-financing, as well as recourse and non-recourse financing. * Key Contacts Major Franchises: Athlete's Foot 46, place de la Seine 94573 Rungis Tel: (33-1) 49.78.75.00 Fax: (33-1) 49.78.05.39 Commercial Manager: Mr. Fran ois Maestripieri Cafe Cotton 120, rue de Turenne 75003 Paris Tel: (33.1) 48.04.00.63 Fax: (33.1) 48.04.32.37 General Manager: Mr. Charles Augustin Jeuffrain Camaieu Enfant 162, Bd de Foumies 59100 Roubaix Tel: (33-3) 28.33.99.33 Fax: (33-3) 28.33.99.66 General Manager: Mr. Jean Duforest Camaieu Femme 211, Avenue Jules Brame 59100 Roubaix Tel: (33-3) 20.99.58.58 Fax: (33-3) 20.81.71.70 General Manager: Mr. Jean Francois Duprez Camaieu Homme 152, avenue Alfred Motte 59100 Roubaix Tel: (33-3) 20.99.36.36 Fax: (33-3) 20.99.36.37 General Manager: Mr. Joel Toulemonde Catimini 94, rue Choletaise 49450 St Macaire en Mauges Tel: (33-2) 41.71.41.41 Fax: (33-2) 41.71.41.32 President: Mr. Salmon Dipaki 26/28, rue Diderot 92000 Nanterre Tel: (33-1) 41.91.91.91 Fax: (33-1) 41.91.92.07 General Manager: Mr. Laurent Maucort Levi's Store 6, avenue du Pacifique 91944 Les Ulisses Tel: (33-1) 69.86.89.98 Fax: (33-1) 64.46.54.78 Commercial Manager: Ms. Nathalie Goindouin McGregor 7, rue du Canal 93420 Villepinte Tel: (33-1) 49.38.00.23 Fax: (33-1) 48.63.78.89 General Manager: Mr. Laurent Albouy Rodier 44, avenue Georges Pompidou 92300 Levallois Perret Tel: (33-1) 41.05.15.15 Fax: (33-1) 41.05.16.76 General Manager: Ms. Illona Dagnaud Weinberg 31, rue des Jeuneurs 75002 Paris Tel: (33-1) 45.08.13.35 Fax: (33-1) 45.08.00.38 President: Mr. Salomon Weinberg Major Trade Associations: F d ration Fran aise de la Franchise (F.F.F.) (French Franchise Federation) 60, rue la Bo tie 75008 Paris Tel: (33-1) 53.75.22.25 Fax: (33-1) 53.75.22.20 Contact: Ms. Chantal Zimmer, Managing Director Major Trade Publications: FRANCHISE MAGAZINE 64, rue du 8 Mai 1945 92000 Nanterre Tel: (33-1) 46.69.11.33 Fax: (33-1) 46.69.11.98 Contact: Mr. Michel Delmas, Editor I.C.F. 64, rue du 8 mai 1945 92025 Nanterre Cedex Tel: (33-1) 46.69.10.10 Fax: (33-1) 46.69.11.98 Contact: Mr. Vincent Besse L'OFFICIEL DE LA FRANCHISE PRESCOM B.P. 6129 75812 Paris Cedex 17 Tel: (33-1) 40.11.44.44 Fax: (33-1) 40.11.55.50 PIC INTERNATIONAL 93-95, avenue des Champs Elys es 75008 Paris Tel: (33-1) 47.23.00.07 Fax: (33-1) 47.20.60.65 Contact: Ms. Martine Tetard LA LETTRE DE LA F.F.F. (Newsletter) 60, rue la Bootie 75008 Paris Tel: (33-1)53.75.22.25 Fax: (33-1)53.75.22.20 Contact: Ms. Chantal Zimmer, Managing Director LA FRANCHISE EN CHIFFRE 18, rue de Calais 75009 Paris Tel: (33-1)40.69.37.00 Fax: (33-1)42.80.43.84 Contact: Mr. Dominique Bonnet

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$3500 USD
For the 2008 Edition

Published: 2006 August
Market: Womens
Region: France
Industry: Apparel
Pages: 45
Delivery: 7-12 Business Days
SKU: infre0000204