Sales: a crucial issue after the impact of the yellow vests

Strikethrough prices and strong reductions: the sales will kick off on Wednesday January 9 at the national level. The date will not have been changed in the end despite calls from certain trade unions to bring it forward by one week to try to offset the impact of the yellow vests movement. The idea, which was not unanimous among associations in the sector, was not retained by the government in particular because it was impossible to implement in such a short time frame. Still, the sales – and the private sales operations which generally precede them – are shaping up to be even more important than usual for businesses this year.

Because the weeks of mobilization of yellow vests since mid-November have weighed heavily on the sector. “Over the period from mid-November to the end of December, it is estimated, based on the drop in attendance that this cost 2 billion euros for shopping centers” indicates Gontran Thüring, general delegate of the National Council of Shopping Centers (CNCC ). “Apart from three days when there was a small rebound in consumption, every day over this period was negative,” he continues. A cold shower. Especially since for some businesses, the holiday season represents up to 50% of annual turnover.

The Secretary of State for the Economy Agnès Pannier-Runacher also estimated recently that the movement of yellow vests had generated an average decline of 25% of turnover in trade. And the fashion industry has not been spared. During the month of November – while the mobilizations of yellow vests did not begin until the middle of the month, the Christmas shopping period began and Black Friday was very popular -, “the clothing stores have recorded a 6.1% loss in turnover, ”notes Yohann Petiot, Managing Director of Alliance du Commerce.

Generate cash

Will the opening sales period allow the long-awaited catch-up? Already in normal times, the sales represent a crucial moment in the fashion sector – a sector that has suffered for ten years -, accounting for 15% to 30% depending on the products in the annual turnover, recalls Yohann Petiot. And in this same sector, one in two products sold is at a strikethrough price, sales or promotions. Because if the sales over the legal period have experienced relative disaffection in recent years, private sales operations have met with enthusiasm. Hence the multiplication of reductions visible now in the window. So after the painful impact of the yellow vests movement, the stake of this beginning of the year seems all the more decisive to sell stocks.

“For collectible products, such as textiles, the liquidation of the stock makes it possible to generate cash in order to be able to acquire the following collection” recalls Rodolphe Bonnasse, CEO of CA Com, specialist in trade, who judges that the sales “will have a almost vital impact for some traders “. “There are real cash flow difficulties” confirms Yohann Petiot. The government had also granted in early December several measures to relieve businesses such as the postponement of tax and social charges.

Sluggish consumption

It remains to be seen whether consumers who have avoided in recent weeks will find the urge to go shopping again at the start of the year. “The stocks are important and the discounts should be too” underlines Gontran Thüring who hopes that the population will return to the stores. Same hope on the side of Yohann Petiot who notes all the same that a climate of uncertainty still reigns with the question of the future of the yellow vests movement, of the psychological effect that the withholding tax may or may not have on behavior consumers or the gloom surrounding consumption.

But if the balances allow traders to sell their stock by selling at a loss, that is to say below the purchase price, and thus rebuild their cash, “it is also the destruction of value. because this means sacrificing all of its margin, or even more “notes Rodolphe Bonnasse for whom 2018-2019 could see” the margins and profitability quite heckled “. Successful sales remain an essential step for the business this year. It’s hard to say if this will be sufficient for his financial health …

The winter sales take place in France from January 9 to February 19, with certain exceptions. In mainland France, the sales take place from January 2 and February 12 in Meurthe-et-Moselle, Meuse, Moselle and Vosges. In Overseas Territories, the sales take place in Guyana from January 2 to February 12, in Guadeloupe from January 5 to February 15, in Saint-Pierre-et-Miquelon from January 16 to February 26 and in Saint-Barthélémy and Saint-Martin from May 4 to June 14. In Reunion, the summer sales will take place from February 2 to March 15.