Written by: Walter White

Category: Traders

Published: April 3, 2018

Textile: no quarter for the Path

Does he lead the Chinese textile TCT straight into the wall? To believe the traders of this Parisian district, specializing in the manufacture and wholesale of ready-to-wear, this competition would be close to completing the local economy. Manufacturers and wholesalers, almost unanimously, to ensure: since the lifting of textile quotas on 1 January, and the subsequent boom in Chinese imports, “there are no customers, no sales, more revenue ” mine has dropped by 70% in six months, “says Marcel, 58, who sells t-shirts street of Aboukir. “It’s the Titanic,” said Maurice, 67, whose forty trails. “The summer season is a disaster compared to last season. It’s dead, lost, there is no solution. I, the trail, I give it two years, “says Martine, 40, Maker. A depressive climate confirms that Perrette Rey, President of the Paris Commercial Court: “Liberalization and subsequently the increase of Chinese textile imports have amplified the psychological felt facing a situation not particularly victorious. The textile entrepreneur feels the front line, particularly vulnerable. ”

Bankruptcy filings

“Specials,” “All five euros,” “massive destocking” last fortnight everywhere, rue d’Aboukir, the Sentier street Passage du Caire, the same ads. And behind the windows, the same stocks to peddle. “Last year, I sold my dresses at 25 euros, says Sahin, a manufacturer of Turkish origin. He remained with me 7000 on the arms. There, I come and I sell the 10 euros … “arrived in France there are twenty, Sahin had yet there not so long ago, the boom years. “Some seasons, between 2000 and 2003, I sold 40 000 or 50 000 coins. This year, no control me. People go, ask the price, and turn the heels “Passage of Cairo, this manufacturer of blouses, which still manufacture its products in Paris, confirms.” People are overstocked, and thus limit the damage by selling for ten days, at cost. It proves discomfort. How many bankruptcies in the textile industry since January? “According to the Commercial Court of Paris, 178 Parisian textile companies were the subject of a reorganization and especially judicial liquidation. Or 35 per month on average. The court added that “the proportion of businesses that could be saved is low at 8.54% against 12% for all Parisian companies across all sectors.”

However, for many of these traders, the removal of textile quotas did not cause the death of the trail: she just dealt it the final blow. “The quota is the sudden extra dagger. To finish us, “said Max, who closed shop two years ago. And in the neighborhood, the debate on Asian competition did not start yesterday. “Before, I was working with several large chains, slides a manufacturer. All have forgotten us to go to source in China. “H & M, C & A or Jennifer are all made in China, confirms Guy, 50, a wholesaler of underwear and swimwear. They are left with less expensive products on fantastic volumes, so with fabulous margins. ”

For wholesalers of the Path, Chinese competition has far … but also the street next almost. These traders from the second district of Paris also trouble with the sellers of the eleventh, which concentrates 70% of the Parisian textile enterprises run by a Chinese boss. In the Popincourt district is developing for some years a “trail bis” which, according to a report by the Commercial Court (see cons below), over 500 Chinese wholesalers. Another pole newest: Wholesale warehouses Aubervilliers. These two Parisian areas of competition are accused by the Path to sell at bargain prices and, hence, to ravage the margins. “The disappearance of quotas is of dressing, which simply allowed Chinese and Asian manufacturers to invest some textile niches they did not operate too far, says Michel, manufacturer rue d’Aboukir. But the disaffection of the quarter is mainly due to competition from Asian eleventh arrondissement, that dump they sell to almost negative margins to occupy the markets “Consequence: A precipitous drop in prices. “On average, in the clothing prices have fallen by a third in a year, says Martine. I was selling my shirts at 18 euros. Today, I sell 13 euros. The margins of 50%, it’s over. At best, it takes 25 or 30% … ”

Intermediaries. To save their business, some manufacturers Sentier bet on the high-end, niche, or a few products still spared. “Since January, I stopped the production of small parts, such as dresses, capris or pants, says Sahin. I try to change my niche, work on fabrics, to make sharper, longer worked. And of course to change prices. We can not sell what you want as before. “Other wholesalers who still raking in orders for procurement agencies, so large volumes and guaranteed downright play the Chinese card. A strategy that draws in the neighborhood a bunch of new intermediaries. “There is not a week without Asian sellers go to the store to indicate their prices and offer us to make us samples in China,” said a trader whose parents started the Path postwar and which is now made in China. “The location of the Path, originally, was to make ready-to-wear fast, the” cash and carry “a unique system. My goal was not to go to China making models six months in advance. But I had no choice. ”