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The French Haute Couture and Fashion Federation has just announced the cancellation of the Paris men’s ready-to-wear week scheduled for June 23-28 and that of haute couture from July 5 to 9. Fashion houses will therefore have to find another way to present their collections so as not to dig into their losses linked to the global health crisis. Among the most affected, Chanel, which has just announced that it will maintain the salaries of its 8,500 employees in France at 100%.
The Parisian week of men’s ready-to-wear scheduled for June 23-28 and that of haute couture from July 5 to 9 have been canceled due to the coronavirus pandemic, announced on Friday March 27, the French Federation of haute couture and fashion.
According to an official press release, the Federation believes that “the conditions are not in place to allow the unfolding” of the two events in the face of “the progression of the Covid-19 epidemic which is spreading throughout the world ”.
This decision is taken in order to “protect our homes, their collaborators and all those who work in our industry”, underlines the Federation while adding to work “on the possibility of alternative projects”.
Chanel makes resistance
Despite this announcement obliging it to review it way of presenting its collections and although it has already given up organizing the show of it so-called “cruise” collection scheduled for May on the island of Capri (Italy), Chanel will not use public funds.
“This decision is part of our responsible solidarity plan. Because the French state will have other priorities. He will have to come to the rescue of companies in difficulty, “explains Bruno Pavlovsky, president of Chanel SAS.
According to the manager, the use of partial unemployment for a period of two months, or “40 working days, for a period of 8 weeks, from March 16 to May 8“, would represent an amount of “several tens of millions of euros” which the company chooses to give up.
The group closed all its factories in Europe, particularly France, in early March, where it employs 7,500 people. Nearly two thirds of Chanel stores – the brand operates more than 200 of them worldwide to sell its fashion collections – are also closed.
Like many of its competitors, the French luxury house is also facing the closure of department stores and perfumeries where, as a rule, it distributes its ranges of make-up, skincare and perfumes.
And, according to Mr. Pavlosky, who confided in the newspaper Le Monde, the number of points of sale open could further decrease given the containment measures “being adopted in Japan, Australia, Russia or in Thailand “.
To cope with “this historic situation“, the company, which employs 27,000 people worldwide, will draw on its cash flow to cover its losses and wages.
Cost reduction measures will also be adopted.
The company, whose sales reached € 9.91 billion in 2018, generated free operating cash flow of € 1.93 billion in 2018.
The impact of the crisis caused by the coronavirus epidemic should amount “in the tens of millions of euros” in the accounts of Chanel, judges the general manager, given a “significant reduction in turnover included between 15% and 20% during the 2020 financial year ”.
In the absence of “visibility“, the chairman of Chanel SAS predicted that this fall could even be more significant.
Lire aussi > CHANEL CANCELS ITS CRUISE FASHION SHOW SET FOR MAY
Featured Photo : Chanel cruise fashion show 2019-2020, at the Grand Palais in Paris, May 3, 2019 © ANTHONY HARVEY / WWD / REX / SIPA / SHUTTERSTOCK[/vc_column_text][/vc_column][/vc_row]
