The following research report contains market research, analysis, statistics and business intelligence relating to research on Women's Wear Industry In France.

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ABSTRACT
For the first time in four years, the French women's wear industry is flourishing. This can be credited to a slight increase in domestic consumption and exportation growth.

In 1997, the industry was composed of 772 companies employing a total of 39,624 people. Most companies are located in the Paris area (50 percent). The rest are concentrated in the North of France (mainly in Roubaix and Tourcoing) and in the Southwest (mainly in Lyon for silk and synthetic material).

Domestic production of women's clothing was valued at USD 5.4 billion in 1997 and is expected to grow by 3 percent during the next few years. Mediterranean and Asian countries continue to maintain a strong presence in the French market due to their extremely low production costs.

In 1997, women's wear imports amounted to USD 2.6 billion, while exports for the same period equaled USD 2 billion. The American share of French women's wear imports in 1997 was 0.8 percent, amounting to USD 20.8 million.

French consumers are gradually becoming more receptive to American fashion and, according to analysts, American companies are expected to increase their share in this promising subsector to 3 percent by 1999.

A. MARKET HIGHLIGHTS & BEST PROSPECTS
In 1997, France's population of women aged 13 and up was broken down as follows:

13/18 years: 2.3 million
19/24 years: 2.2 million
25/29 years: 2.1 million
30/34 years: 2.1 million
35/39 years: 2.1 million
40/44 years: 2.1 million
45/49 years: 2.1 million
50/54 years: 1.7 million
55/59 years: 1.3 million
60/69 years: 2.9 million
70 years and more : 3.9 million

TOTAL 24.8 million

Market shares (in percentage of purchased quantities):

Polos/T-shirts: 23.4 percent Sweaters/Pullovers: 15.5 percent Pants/jeans: 15.3 percent Blouses: 10.8 percent Skirts: 10.0 percent Dresses: 7.0 percent Suits: 4.4 percent Coats/raincoats: 3.2 percent Swimsuits: 3.0 percent Jackets: 2.7 percent Blazers: 2.5 percent Shorts: 2.2 percent

* Statistical Data

in USD Millions

    1997   1998*   1999* Projected Avg. Annual Growth Rate For following 2 Years
Import Market   2,600.0   2,730.0   2,866.0   5%

Local Production   5,436.0  5,599.0   5,767.0   3%

Exports   2,054.0   2,177.0   2,307.0   6%

Total Market   5,982.0   6,152.0   6,326.0   3%

Imports from U.S.   20.8   21.4   22.0   3%

Exchange Rates   5.5   5.5   5.5

Estimated Future Inflation Rate: 3 %

* estimated

Note: Official statistical data for women's wear include clothes for girls aged 13 to 18 years old.

1997 Import Market Shares: United States: 0.8%; Morocco: 12.4%; China: 9.9%; Tunisia: 9.0%; Italy: 8.4%; India: 5.5%.

Sources: French Customs Office 23, rue de l'Universit 75007 Paris Tel: (33-1) 40.24.65.10
Fax: (33-1) 47.56.30.16

Women's Wear Trade Association 5, rue de Caumartin
75009 Paris Tel: (33-1) 44.94.70.00
Fax: (33-1) 44.94.70.04

Receptivity code (1-5): 3 Range: 5 (extremely receptive) to 1 (not receptive)

French women have been influenced by American trends, and therefore, U.S. imports are expected to grow in the next few years.

* Best Sales Prospects

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 position. New products should be aggressively marketed to appeal to French women's tastes and to influence their fashion preferences.

Credit/delivery terms: Another important factor is the ability to offer credit terms and reorder services similar to those of French competitors. A European warehouse is an additional advantage in meeting short-term delivery requirements.

Price: Price is also a key factor. If prices are competitive, American manufacturers will be able to penetrate the French market much more successfully.

Clothing characteristics: Women are sensitive to the quality of the product. Therefore the quality/price ratio is extremely important.

* Domestic Production

In 1997, the French women's wear industry was composed of 772 companies employing a total of 39,624 workers. The majority of these French companies were located in the Paris region, in the North of France, and in the Rhone-Alpes region.

In 1997, production of women's wear was valued at USD 5.4 billion representing a 3.3 percent increase in comparison with 1996. During the same period, the number of French companies declined by 1.3 percent. Many French companies have installed their manufacturing facilities in countries with lower labor costs (Portugal, Morocco, Tunisia, Turkey, and recently in Eastern Europe).

French production enjoys a strong image for both creativity and quality. In 1997, total French exports of women's clothing amounted to USD 2 billion representing a 6.3 percent increase in comparison with 1996 figures. According to specialists, French exports should continue to increase by approximately 6 percent over the next few years.

In 1997, French exports were to:
Europe: 49.3 percent
Asia: 21.6 percent
Americas: 9.1 percent
Middle East: 8.1 percent
Africa: 1.9 percent
Other countries: 10.0 percent

Most exports were to: (in USD millions) (Variation in % 97/96) Japan   259.2   + 4.9 Germany   231.0   + 14.0 Belgium/Luxembourg   215.9   4.9 United States   148.9   + 15.9 United Kingdom   145.0   + 34.3 Switzerland   135.6   + 8.0 Spain   109.8   5.1 Italy   107.0   + 11.2 Hong Kong   101.2   + 8.4 Portugal   67.0   + 19.8 Saudi Arabia   49.5   + 22.3 Exports to the United Kingdom, Saudi Arabia, and Portugal registered respectively increases of 34.3 percent, 19.8 percent, and 11.2 percent. Exports to Spain and Belgium/Luxembourg showed respectively decreases of 5.1 percent and 4.9 percent.

Most exported articles were:

Pants: 22.4 percent
Blouses: 18.1 percent
Skirts: 15.0 percent
Dresses: 13.5 percent
Vests: 8.3 percent
Suits: 6.4 percent
Anoraks: 3.8 percent
Shorts: 3.3 percent
Coats, raincoats: 3.1 percent
Swimsuits: 1.5 percent
Others: 4.6 percent

* 3rd-Country Imports

In 1997, total women's wear imports to France totaled USD 2.6 billion representing a 14.4 percent increase. According to market observers, imports are expected to increase by approximately 5 percent over the next few years. Most imports came from countries with low production costs, such as Morocco, Tunisia, and China.

In 1997, French imports came from:

Europe: 42.8 percent
Asia: 31.8 percent
Africa: 22.8 percent
United States: 0.8 percent
Other countries 1.8 percent

Morocco held an important share of the French market in 1997 (12.4 percent of total imports), followed by China (9.9 percent), Tunisia (9.0 percent), Italy (8.4 percent), and India (5.5 percent).

Imports from Pakistan, Germany, and Thailand have experienced a decline in comparison with 1996 figures -- respectively -17.4 percent, -6.6 percent, and -1.7 percent. Many French companies have set up highly competitive manufacturing facilities in Eastern Europe. Therefore, imports from Romania registered an increase of 28.6 percent, and imports from Poland showed an increase of 12.4 percent. The following countries also registered a significant increase in comparison with their 1996 figures:

Vietnam + 67.7% representing 1.4% of total 1997 imports
Ukraine + 45.3% representing 1.4% of total 1997 imports
Indonesia + 34.8% representing 2.6% of total 1997 imports
Hong Kong + 29.5% representing 3.1% of total 1997 imports

Most imported items were:
Pants: 23.3 percent
Blouses: 17.8 percent
Skirts: 12.5 percent
Dresses: 11.5 percent
Shorts 9.7 percent
Vest: 6.2 percent
Anoraks: 5 1 percent
Coats/raincoats: 4.4 percent
Suits: 2.6 percent
Swimming suits: 0.8 percent
Suits: 1.0 percent
Others: 4.8 percent

Vests and pants registered a significant increase of 34.5 percent and 18.1 percent, respectively. Imports of dresses also registered a strong increase (plus 12 percent), as did imports of coats/raincoats (plus 10.1 percent). Imports of anoraks registered a decrease of 5.5 percent.

* U.S. Market Position

In 1997, imports of women's wear from the United States represented 0.8 percent of total imports. Given the fact that French women are becoming more receptive to American fashion, American imports are expected to grow in the upcoming years. Well-known American designer brands, such as "Donna Karan" and "Calvin Klein" are sold in French department stores. One year ago, Calvin Klein opened a boutique in Paris in a famous fashion street (avenue Montaigne, 75008 Paris). In addition, the New-York designer Nicole Miller just opened a boutique in Paris across the street from the Chanel boutique (rue Cambon, 75001 Paris).

In light of the above, there appears to be numerous opportunities for American companies to successfully penetrate the French women's wear market.

ASIAN INVASION ON FRENCH APPAREL A wave of low price, Asian, apparel imports is overwhelming Europe. European textile producers have requested that the World Trade Organization (WTO) award it a safeguard clause, which would be a protection for the European producers. However, differing viewpoints between the WTO and the European governments make it unlikely that a quick decision will be made to prop up the European textile industry.

Foreign trade of French textile is in decline, but imports of end products, coming from low wage countries, are increasing. Trade fell during the first 3 months of 1999, with a decline of 4 percent (USD 2,386 billion) for textile exports, and a decline of 2 percent (USD 2,978 billion) for textile imports.

In the apparel sector, exports are rising (+ 1 percent = USD 896 million) and imports are also increasing (+ 6 percent = USD 1,516 billion). These numbers represent a real turnaround, in comparison with 1998, when foreign trade was at its top level. But it seems to be the first effects of a bearish tendency on the French general activity, linked with the Asian crisis.

Increasing importance of end products in low price imports

Apparel coming from low price developing countries (LCDs) is rapidly rising but yarns and fabrics are collapsing.

FABRICS -19 PERCENT YARNS 12 PERCENT KNITTING + 7 PERCENT APPAREL + 8 PERCENT

2. More and more concentrated, large-scale retailers seized the opportunity of Asian devaluation to supply themselves with end products manufactured in the Far East. Specialized channels of trade and supermarkets do not care about apparel. They prefer to buy Asian end products because of the devaluation that is occurring there. Consequently, their purchases of fabrics and yarns from Europe are less and less important. Otherwise, retailers, more and more, import raw materials from Asia, design the product in Europe, and then manufacture it on site. Only an increase in prices in the area and a powerful dollar could break the vicious circle. But this fortune does not benefit Asia as a whole. China is the one country in the area to take advantage of these movements: there are + 31 percent of Chinese apparel coming into France compare to 1998. Sales of Chinese in France increased by one third in the first 3 months of 1999 (USD 1,475 million).

France's 3 main suppliers

CHINA TEXTILE + 15 PERCENT APPAREL + 31 PERCENT

TUNISISA TEXTILE + 17 PERCENT APPAREL + 16 PERCENT

TURKEY TEXTILE + 7 PERCENT APPAREL + 9 PERCENT

Turkey occupies the 4th rank for textile products, Tunisia the 1st rank for apparel with more than USD 213 million sales for the first semester of 1999. Then, the 3 first suppliers for France in textiles, Italy (-6 percent), Germany (-10 percent), Belgium (-11 percent), are all decreasing.

3. Foreign trade for French textile at the first semester of 1999 (billion $)

TOTAL EXPORTS

TEXTILE 4 PERCENT ($ 2,386) APPAREL + 1 PERCENT ($ 0,896)

TOTAL IMPORTS

TEXTILE 2 PERCENT ($2,967) APPAREL + 6 PERCENT ($ 1,582)

Foreign trade of textile is decreasing and foreign trade of apparel is seeing a slow growth.

Imbalance between Europe and 5 Asian countries (China, India, Indonesia, Pakistan, Thailand) in trade of textile and apparel

EUROPEAN IMPORTS $ 14,37 BILLION EUROPEAN EXPORTS $ 0,455 BILLION

Average coverage rate: (export / import) 3,7 percent.

In 1998, exports of European textile / apparel to the 5 considered countries only represented + 3,7 percent of imports.

Source: Journal du Textile
dated June 21, 1999

C. END-USER ANALYSIS

French women of today are decisive and dynamic. They desire basic garments that can be easily mixed together and accessorized. Though French women generally prefer to invest in high quality clothing, they occasionally indulge in impulse buying.

Ready-to-wear for working women has experienced a boom over the past few years, and many manufacturers have developed a successful market niche in this area.

In 1997, consumption patterns based on a survey of 1,000 women aged 15 years and older were as follows:

Buying Frequency Between Two Purchases

Coats, raincoats: 3.5 years
Vests and blazers: 3.5 years
Swimsuits: 2.75 years
Suits: 2 years
Dresses: 1.25 years
Skirts: 9 months
Blouses: 8 months
Sweaters: 6 months
Jeans, pants: 6 months
Tee-shirts: 4 months

D. MARKET ACCESS

* Import Climate

French importers pay VAT (Value-Added Tax) at the rate of 20.6 percent on the CIF (Cost, Insurance, Freight) value of imported goods. They also pay customs duties of 14 percent.

There are no quotas on imports of apparel manufactured in the United States.

* Distribution/Business Practices

Distribution in percentage of money spent was as follows in 1997:

Specialty chains: 35.6 percent Independent stores: 30.9 percent Mail-order houses: 10.1 percent Super/hypermarkets: 7.0 percent Markets: 5.0 percent Department stores: 4.4 percent Popular stores: 1.0 percent Other: 6.0 percent

Sales in department stores, as well as in specialty chains, showed a slight increase compared to 1996 sales. Sales in other distribution networks remained quite stable, except for sales in independent stores which have decreased.

The Commercial Service (CS) of the American Embassy in Paris offers excellent ways for U.S. firms to enter the French clothing market (in particular the Gold Key Service, which for a nominal fee, provides scheduled appointments with qualified and pre-selected potential agents, distributors, joint venture partners, and other French firms). This can help ensure the successful introduction of an American firm's product in France. An Industry Specialist accompanies American Gold Key business visitors to meetings and helps in the analysis of their results and in developing a campaign to maximize market opportunities in France. For details on this and other CS programs that can help your firm in understanding, entering, and succeeding in this market, contact the Minister- Counselor for Commercial Affairs, U.S. Embassy Paris, APO AE 09777, or the U.S. Department of Commerce Export Assistance Center nearest you in the United States.

* Financing

There are three main ways for American firms to sell women's wear in France: through a sales agent, a distributor, or a subsidiary. Exporting through a distributor or a sales agent is the most common practice.

A sales agent works with retailers and end-users to promote the company's products. An agent's commission for women's wear is usually about 15 to 20 percent, and agents will frequently request exclusive representation. Agents are protected by a number of laws in France. If an American manufacturer of women's wear wishes to terminate the business relationship with the agent prior to expiration of the contract, the agent must first be contacted and given the opportunity to improve his/her performance. If the American manufacturer still wishes to end the relationship after these steps have been followed, the agent has the right to retain the names of all contacts, clients, and related sales information. The manufacturer may purchase this information from the agent, but it is often very expensive. Finally, the manufacturer must often pay the agent a severance fee ranging from one to two years of the agent's anticipated future commissions.

A distributor purchases products from the American manufacturer, then adds a 30 to 40-percent markup to cover commissions, credit risk, after-sales service, and the cost of carrying a local inventory to meet small orders. Value-Added Tax (VAT) and tarifs are normally paid by the distributor. French distributors also often request exclusive contracts. Many American companies use a distributor when introducing a product which employs a new technology or design. The distributor shares much of the same legal protection as the agent. If termination occurs prior to contract expiration, the usual termination equals the value of the distributor's expected profit margin over a two-year period. Furthermore, a women's wear distributor representing an American company in France controls the product's marketing strategy and image. The distributor is not obligated to communicate market research information to the American manufacturer. It is therefore important to select a distributor who understands the American company's goals and objectives. French women's wear distributors usually pay for their orders within 90 days.

Establishing a subsidiary offers several advantages for the manufacturer: more control over their distribution practices, the ability to adapt quickly to evolving needs of the market, more direct influence over the training of personnel, and control over unauthorized dissemination of technology for which the American firm holds a patent. However, a subsidiary involves a much greater financial investment and the responsibility of maintaining assets and employees in a foreign country.

* Key Contacts

Trade Associations:

Federation Fran aise du Pret-a-Porter F minin (French Trade Association for Women's Wear) 5, rue de Caumartin 75009 Paris Tel: (33-1) 44.94.70.00 Fax: (33-1) 44.94.70.02 Contact: Mr. G rard Roudine, General Delegate

Federation des Industries de la Maille (French Trade Association for Knitting Products) 37-39, rue de Neuilly 92110 Clichy Tel: (33-1) 47.56.32.32 Fax: (33-1) 47.56.32.99 Contact: Mr. Devernoy, President

Union des Industries Textiles (French Textile and Apparel Trade Association) 37-39, rue de Neuilly 92110 Clichy Tel: (33-1) 47.56.31.33 Fax: (33-1) 47.30.25.28 Contact: Mr. Solles, President

Federation Nationale du Textile Habillement (French National Trade Association for Clothing Textiles) 4, impasse des Peintres 75002 Paris Tel: (33-1) 42.33.19.83 Fax: (33-1) 42.33.49.75 Contact: Mr. Virard, President

Trade Magazines:

FRANCE TEXTILE 54, rue Saint Alban 42300 Roanne Tel: (33-1) 45.50.32.32 Fax: (33-1) 43.57.53.94 Contact: Mr. Bitter, Chief Editor

JOURNAL DU TEXTILE 61, rue de Malte 75541 Paris Cedex 11 Tel: (33-1) 43.57.21.89 Fax: (33-1) 47.00.08.35 Contact: Mrs. Joelle Pignau, Chief Editor

BOUTIQUE DE FRANCE 19, rue Froment 75011 Paris Tel: (33-1) 40.21.13.40 Fax: (33-1) 43.57.04.81 Contact: Mrs. Lagadec, Chief Editor

Information Agencies:

Centre Textile de Conjoncture et d'Observation Economique
CTCOE (Monthly Publication of Economic and Statistical Data) 37/39, rue de Neuilly BP 249 92113 Clichy Cedex Tel: (33-1) 47.56.30.10 Fax: (33-1) 47.56.30.16 Contact: Mr. Philippe de Bohan, Director

Department store contacts:

Galeries Lafayette 40, boulevard Haussmann 75009 Paris Tel: (33-1) 42.82.34.56 Fax: (33-1) 48.78.25.19 Purchasing Directors for women's wear: Ms. Odile Morvan and Mrs. Pascale Camart

Printemps 102, rue de Provence 75009 Paris Tel: (33-1) 42.82.56.35 Fax: (33-1) 42.82.50.05 Buyer for women's wear: Mrs. Souciet

Au Bon Marche 5, rue de Babylone 75007 Paris Tel: (33-1) 44.39.80.00 Fax: (33-1) 44.39.80.50 Purchasing Director for women's wear: Mrs. de Mareuil

Bazar de l'Hotel de Ville (BHV) 55, rue de la Verrerie 75004 Paris Tel: (33-1) 42.74.90.00 Fax: (33-1) 42.74.96.79 Purchasing Director for women's wear: Mrs. Vincent

Samaritaine 19, rue de la Monnaie 75001 Paris Tel: (33-1) 40.41.20.20 Fax: (33-1) 40.41.28.28 Purchasing Director for women's wear: Mrs. Annie Taraud

* Trade Promotion Opportunities

The bi-annual women's wear trade show Salon du Pret-a-Porter is held at the Porte de Versailles exhibition center during the first week of September and the last week of January.

Name: Salon du Pret-a-Porter (Women's Wear Trade Show) Location: Porte de Versailles Dates: January, September Frequency: Twice a year Organizer: SODES 5, rue Caumartin 75009 Paris Tel: (33-1) 44.94.70.00 Fax: (33-1) 44.94.70.05 Contact: Christiane Oudin

The women's wear trade show is held twice a year in Paris (January and September). BR>

The show welcomed a total of 46,954 visitors. French visitors amounted to 22,515 while 24,439 foreign visitors attended the show, broken down as follows:

Spain: 16 %
Italy: 11 %
Belgium: 9 %
Japan: 7 %
United Kingdom: 6 %
Portugal : 5 %
Greece: 5 %
Switzerland: 5 %
Netherlands: 4 %

American companies wishing to penetrate the French market are highly encouraged to participate in this trade show to learn about French business practices and to see how their products will be received in the French market. It is also an excellent forum to meet potential agents and distributors.

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

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Published: 2006 August
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