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Feeling the pinch of the credit crunch
French children are famously well-dressed. To visit France is to understand why, given the preponderance of shops dedicated to neatly-tailored, coordinated children's wear.
- Financial Times
- Published: 23:29 December 24, 2008
French children are famously well-dressed. To visit France is to understand why, given the preponderance of shops dedicated to neatly-tailored, coordinated children's wear.
The variety of boutiques, internet stores and mail order catalogues make France a very competitive market for children's clothing, says Georges Spitzer, chief executive of Du Pareil Au Même, a value-for-money children's clothes chain which has been going strong for the past 22 years.
Spitzer admits it has been "a difficult year".
"The customer is reluctant to spend and it's easier to postpone spending on clothes because you have no real need of them," he says.
A recent customer survey showed 31 per cent of DPAM shoppers said price was the most important factor when buying children's clothes. Two years ago, that figure was 14 per cent.
Triggering demand
However, in spite of this price sensitivity, Spitzer says "you can trigger demand". Last month, the chain ran a week-long promotion allowing customers who bought three items to purchase the cheapest for ¤1. It was the first time DPAM had such a campaign, and it proved "very effective", says Spitzer.
DPAM was taken private in May after a 100 million euro (Dh513,7 million) takeover bid by Olivier Halley, a member of the founding family behind Carrefour, Europe's biggest retailer. The Halley family earlier this year broke up its bloc shareholding in Carrefour, allowing members to go their own ways.
Carrefour has had a difficult year in the face of lower consumer spending, which will end with the departure of José Luis Duran, its chief executive, at the end of this month. Like Carrefour, DPAM has experienced slow growth in France. Last year, domestic sales increased 4.5 per cent while its sales abroad rose 17 per cent.
So it is no surprise that DPAM, which sells 70 per cent of its clothes in France, has its eye on expanding overseas. Italy accounts for 11 per cent of the chain's sales while Spain is its third-largest market, with 5 per cent. Greece, Russia and Romania are all new and fast-growing markets.
However, the economic downturn means the company, while on the watch for opportunities, will have to go easy on its overseas investment plans.
"We will continue opening stores but the pace will be more limited than in previous years and we will be tight on spending," says Spitzer.
Nevertheless, he remains an optimist at heart.
"A crisis period is a period of opportunity - it could be finding new locations or attracting new customers as people discover us," he says.
"Everybody is so pessimistic that maybe the going will be less rough than expected. Sooner or later, unless they are in real financial difficulty, people will want to open their purse strings."
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