Like the other major European textile industries, the French industry has been relatively spared at early processing stages by the Asian financial crisis in 1997/98.

The French industry textile/apparel industry has been submitted to a delayed, but major, impact generated by a deeply disorganized world market.

In parallel with these events, the growth of textile/apparel consumption which was positive in 1997, 1998 and 1999 exhibited a new gap between the production level and the sales level to the benefit of the important distributors.

Indeed more structural changes appeared in 1999. Drawing profit from its increasingly concentrated buying power - through mergers of central buying offices and mergers of distribution outlets - and from opportunities deriving from competitive offers made attractive through the devaluation of Asian currencies, the large distributors seem to be turning to buying from distant and cheap sources capable of delivering global offers.

The general deflation of consumption prices has considerably eroded the producers' profit margins. The effect was shown in the paper "FRANCE: Exports/Imports Up, But Sales Down" of November 14 where the statistics showed that the value of sales increased only slightly. This reflects that the apparel items were sold at low prices with reduced profit margins.

Another important factor is of course the share devoted to apparel buying by households budget. The figures hereafter for France, as well as fro Germany and Italy for comparison, concerning the share devoted to apparel buying by households show that a structural change has occurred. Household budgets are more readily spent on items such as cars, phones, computers, health, holidays and less for garments. Between 1990 and 1998, France has lost 1.3 per cent, Germany 1.4 per cent and Italy, 0.9 per cent.

Apparel share households' budget
1990 1998
France 5.5% 4.2%
Germany 6.3% 4.9%

By Marc de Laroche