French retailers brace for bleak Christmas as protests darken festive mood

By Alessandro Parodi and Helen Reid

Along wide Parisian shopping boulevards, early Christmas lights glow around security grilles and boarded-up windows as stores brace for a third weekend of unrest that has already cost an estimated $2bn in damage and lost revenue.

Weeks of demonstrations against rising costs and worsening living standards have spiralled into violence and looting in several French cities, damaging 2,400 stores across the country, according to the French Chamber of Commerce.

With further protests planned on October 31 and November 5, the mood among Parisian retailers and consumers is anything but festive.

French consumer confidence fell to a 13-year low this month. That bodes ill for November and December, which together typically account for 40% of annual retail turnover.

Pulling down the shutters

“Commercial activities in city centres have been brought to a standstill,” said Alain Di Crescenzo, president of the French Chamber of Commerce, about the days of protest.

“Stores that were looted must recover, repair and reopen, but then there are all those that weren’t broken into but had to pull down the shutters and have made zero sales,” he added. Over a quarter of the outlets damaged during protests remain shut, Di Crescenzo told Reuters, and many stores are likely to be shuttered protectively ahead of the next protests.

Shops targeted included outlets from major luxury brands like Hermes, Louis Vuitton and Burberry, but also Carrefour supermarkets and corner shops.

The Chamber of Commerce estimates losses to retailers to exceed €1bn (R18.5bn), while Morningstar DBRS said the total could approach $2bn including uninsured damage and lost revenue, and rise further if protests escalate.

Besides the direct impact on looted stores, fears of further violence drove many more to close as a precautionary measure, turning major shopping streets into ghost towns ahead of the October 24 protests, during which security was tighter but 50 stores were still broken into.

Most store managers, avidly monitoring neighbourhood watch communication groups, will only decide on Friday whether to stay open on the day of the demonstration.

Counting the damage

Burberry’s store on the fashionable Rue Saint-Honoré, which was looted and damaged in the October 17 riots, reopened on Tuesday after 10 days, according to a spokesperson for the company.

Jeweller Pandora said two stores in Paris and one in Lyon were vandalised and looted, and remain shut. It said it would keep taking steps including boarding up windows and enforcing temporary closures to protect its property and staff.

Swedish fashion retailer H&M had four stores impacted by protests on October 17 in Lyon, Nantes, Tours and Chambery. Last Saturday, it closed two outlets and shut another 40 stores earlier than normal business hours as a precautionary measure. It said it was too early to say what it would do this Saturday.

Adidas CEO Bjorn Gulden said on Thursday that the sportswear brand had some closures and declining store traffic in some cities due to protests.

“Of course, it was scary and it was not nice, but the impact on the total business for Q4, I would say, is not a level we can talk about yet,” he told journalists on a call.

Impact on tourism

Georges Kern, CEO of Swiss luxury watchmaker Breitling told Swiss newspaper Tages-Anzeiger that if there was a threat of more unrest occurring, its shops would stay closed.

“If the disruption continues in the weeks ahead, some businesses – particularly non-food retailers – could face serious difficulties,” Cooperative U CEO Dominique Schelcher told Reuters.

The protests are also likely to weigh on tourism. Well-known Parisian department store Printemps has had to delay the launch of its Christmas decorations, initially planned for November 5, while the Paris tourist office said extensive media coverage may deter visitors in coming months.

“Consumption is the engine of the French economy,” said Magali Marton, head of research and data at real estate advisory Knight Frank France. “For shops to survive, people have to feel safe enough to come in and buy.”

Reuters