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Feb 25, 2011
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Price hikes seen threat to French fashion recovery

By
Reuters
Published
Feb 25, 2011

Feb 25 - The recovery of France's fashion industry could be more fragile than expected as brands raise their prices this year to pass on surging raw material prices, a fashion trade body warned on Friday.


A woman carrying Chanel luxury good shopping bags

Women's ready-to-wear sales in France remained flat in 2010 at 11.6 billion euros ($16.04 billion) after falling 3.2 percent in 2009 but they could suffer again this year from the high costs of cotton, silk, wool, leather and other materials.

"We are hoping of course that the recovery will continue in 2011, but consumption could be hit if brands lift prices ... and we expect some will," said Francois-Marie Grau, general secretary of the French Federation for Ready-to-wear.

At the luxury end of the sector, brands such as Louis Vuitton and Chanel have already raised some prices, and analysts expect further hikes this year.

However, the increase has not prevented the luxury segment of France's ready-to-wear market from enjoying a strong rebound in 2010, as shown by recent results from brands including Yves Saint Laurent, Balenciaga (PPR), Fendi (LVMH) and Lanvin.

The Federation said Japan now represented 6 percent of France's total ready-to-wear exports, up from 5 percent in 2009, and had replaced the United States as its No.1 export market.

Overall, it said women's ready-to-wear exports rose 2.6 percent in 2010 to 2.4 billion euros.

The lobby group, which represents companies across the price spectrum, said top sellers in 2010 remained dresses, with sales up 19 percent in 2010 against a rise of 16 percent in 2009.

Sales of women's jeans and pants in France fell 15.3 percent in 2010, however, against a drop of 13.8 percent in 2009, it said.

Internet sales in 2010 represented 9 percent of total women's ready-to-wear revenue, up from 6.3 percent in 2010, as shoppers became increasingly Internet savvy and warmed up to the web as a way to save both time and money.

By Astrid Wendlandt
(Editing by Will Waterman)

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