Women’s Wear Daily
04.20.2014
fashion-features
fashion-features

The Euro Consumer: Hot, Feeling Poorer

France’s recent killer heat wave is just the latest headache for stores already pummeled by weak tourism, a strong euro and economic doubt at home.

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Analysts estimate sales at the Hermès flagship in Paris are down about 16 percent
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PARIS — It’s been a summer of discontent for European retailers.

The recent heat wave, which is being blamed for thousands of deaths in France and causing major political fallout, was only the latest headache for stores already pummeled by weak tourism, a strong euro and economic uncertainty at home.

France, particularly hard hit, also had to cope with a series of disruptive strikes by transit and entertainment workers — and lingering anti-French sentiments stemming from the country’s opposition to the U.S.-led war in Iraq.

While temperatures cooled in France and the rest of Europe late last week — from over 100 degrees Fahrenheit to a mere 85 degrees, cashmere coats and knee-high boots failed to draw crowds into the chic boutiques lining Rue Saint Honore and Rue Faubourg Saint Honore in Paris. In many stores, including Gucci, Prada, Chloé, Tod’s, Jitrois, Akris and Givenchy, sales associates outnumbered customers by a wide margin and busied themselves by straightening already pristine shelves.

“This year has been a disaster,” said Isabelle Parraud, manager at the Max Mara store on Rue Saint Honore, estimating American and Asian customer numbers on the normally high-traffic street have fallen off by 30 to 40 percent compared with last year. “The Japanese can’t cope with the heat and so they stayed in their air-conditioned hotels.”

“In general, the luxury industry has been the victim of a disaster,” agreed Jacques Flaster, president and chief executive of Societe La Cours, the store’s franchisee.

The doldrums are not the preserve of the high end. Swedish fast-fashion retailer Hennes & Mauritz put the blame partly on sweltering temperatures for a worse-than-expected rise in July sales of only 8 percent.

“In some markets, the very hot summer influenced turnover,” said Carl-Henric Enhorning, H&M’s head of investor relations. “[Sales were] down in Germany, Switzerland and Austria due to the unusual circumstances.” He added, however, that Spain and France did “quite well” in June, when temperatures were much cooler.

Enhorning also noted that H&M, wary of fallout from the conflict in Iraq and the outbreak of SARS, reduced the summer stock available in its stores, which later led to the chain being short on inventory in June and July.
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