FINANCIAL CRISIS

Less of a frenzy as Paris retailers scrape new lows

The financial crunch has seen store managers in Paris kick off the January sales with discounts of up to 70 percent. Clothing sales dropped by 4 percent in 2008.

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REUTERS - Paris shoppers filed into stores on
the first day of the winter sales on Wednesday but the crowd was
thinner than previous years as economic worries and unusually
cold weather held back many deal-hunters.

 

At fashion meccas Galeries Lafayette and Printemps, rows of
shoes, coats and handbags from low-budget items to luxury brands
Dior, Yves Saint Laurent and Miu Miu were on offer at discounts
of some 30-60 percent.

 

Printemps said its 17 French stores achieved a 4 percent
year-on-year rise in revenue on the first day of the sales this
year, marking a slowdown from 6 percent growth last year.

 

No separate figures were available on Wednesday for its
flagship store in Paris' Boulevard Haussmann, said a
spokeswoman, adding that its stores in Metz and Nancy began
their sales on Jan. 2.

 

Galeries Lafayette reported "slight growth" in revenue
across its French stores, including in central Paris, "despite
the strong disruption by the wave of cold".

 

Shoppers generally did not face huge struggles to reach the
cashiers as queues remained short. But there were still some
hurdles, with dozens of keen buyers forced to wait in line to
enter the Gucci store at Galeries Lafayette and 20-deep queues
in the Lafayette Homme menswear department.

 

"It's not as crazy as it usually is on the first day," said
Cecile Coralle, 40, assistant to a director at Rothschild bank,
who was buying two pairs of high-heeled shoes. "This time, I can
find my size immediately whereas normally it's a battle."

 

Staff in the department stores also reported a calmer start
to the sales this year than a year ago as shoppers faced
temperatures as low as minus 9 degrees Celsius outside, though
trading was still considered good.

 

"With the cold and the drop in spending power, I'm finding
there are fewer people. There were 20 or so people this morning
(at the opening). They weren't running like in previous years.
It's calmer," said Virgile Boungou, of the Daniel Cremieux
section in Lafayette Homme.

 

Winter sales started a few days earlier this year thanks to
regulatory changes allowing more flexibility but will last five
weeks as opposed to six weeks previously.

 

Retailers are keen to rake in as much cash as possible after
lacklustre Christmas sales as they need to pay for stock for the
spring/summer season items they have already ordered.

 

French consumer confidence sank in December as households
worried that the sluggish economy would lead to a jump in
unemployment and hurt their personal finance, national
statistics office INSEE said on Tuesday.

 

The DJ Stoxx Retail Index fell 44 percent in 2008.

 

Early data showed retail trading in France was exceptionally
bleak in December, usually the strongest month of the year.

 

Many shoppers, braced for scenes of chaos, were surprised to
see how easy it was to shop on Wednesday.

 

"It is quite civilised here compared to America, places like
Macy's or Bloomingdale's where it's mad," said Helen Meagan, a
New Yorker holidaying in Paris.

 

Jules David, 38, a sales executive at French railway
operator SNCF from central Paris who was visiting the opening
day of the sales for the first time, said he expected there to
be more people and thought items were still expensive compared
to other countries.

 

However, there were glimpses of over-exuberance as some
bargain hunters stumbled on the escalators trying to reach the
luxury menswear department at Lafayette Homme as the doors
opened, said Sandrine Bourhy of the store's Sandro Homme
section.

 

Many analysts expect this year's sales season will take its
toll on margins as retailers are allowed to sell at a loss to
get rid of excess stock following the bleak Christmas season.

 

But French Economy Minister Christine Lagarde was optimistic
as the sales kicked off.

 

"The sales should be a really good success according to the
numbers and indications we have at the moment," she said as she
rummaged through discounted stilettos with journalists in tow.

 

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