France is still on lockdown. As in other countries the coronavirus crisis threatens the existence of many small fashion retailers. Especially in Paris, because there the yellow vest revolts and the general strike have already severely weakened the trade. How can the retailers survive this renewed crisis? How should they communicate with customers? What marketing measures should they take? The Paris concept store for men's fashion, La Garçonnière, decided to contact its 26,000 regular customers directly to inform and offer them a deal. Co-founder Mathieu Dupuis explains the idea and intentions behind the campaign.
How is La Garçonnière doing economically?
For us, the Corona crisis comes at a difficult time, because it is the culmination of a string of bad events. We are a young company and we need money to develop. But for two years we have not been able to build up reserves. In the winter of 2018, the yellow vest demonstrations destroyed the Christmas business, which accounts for 60% of our annual turnover. One year later came the general strike. Again in the Christmastime. Now we had to close the shop completely. From crisis to crisis the situation for us is getting worse.
How have you overcome past crises?
During the yellow vest riots we had to close on Saturday, but the other days we could work. However, we had invested enormously in 2018. We opened a new store in Bordeaux and moved in Paris to a new boutique that is almost twice the space. Instead of increasing sales as expected, it has collapsed by 30%. Then came the general strike in winter 2019. All public transport was at a standstill and customers could not get to the store. Moreover, there was a morose mood in the city. Nobody wanted to go shopping anymore. As a result, our sales fell by a further 15%. In these crises we have learned to change our purchasing policy. We now only buy in very limited quantities and have a low stock level. This now benefits us.
Rent and personnel costs have the highest impact. We have a concept that is very much based on the personal welcome and advice we give our clients. We also have a coffees hop and a barbershop with two permanent barbers in Paris and one barber in Bordeaux. In total we have about 20 employees, all of whom we could not send into part-time unemployment.
Have you stopped paying the rent?
No, our landlord also has to pay back his loans. We're all in the same situation. But we're negotiating with him to postpone the payments.
Have you received any aid yet from the government?
No. The part-time unemployment is retroactive. We're waiting for a response from the government.
At the beginning of April, you sent an e-mail to 26,000 customers explaining the economic situation of La Garçonnière and asking them to buy shopping vouchers. How did this come about?
Given the pre-crisis situation, we knew that our treasury would not be enough. The idea of explaining the situation in a very personal e-mail was already in our minds in mid-March. But at the beginning of the Corona crisis there were so many initiatives that seemed more important to us than ours. We did not want to ring the alarm bell immediately.
Instead of goods there is now only one product in our e-shop: gift vouchers. They are available in six different price ranges from €10 to €300. Whoever buys the voucher can redeem it–as soon as we are allowed to reopen–and gets an additional 20% discount on the goods. This is also a good deal for the customers.
What is the reaction to this promotion?
Quite a lot customers have bought vouchers. But what really surprises us is how many people offer us help. Some have forwarded the mail, lawyers have contacted us who want to support us. Still others want to invest. The response was quite positive. It shows that transparency pays off and we have loyal customers who stand by our project.
Were there any negative reactions?
Only one. One accused us of being too preoccupied with ourselves in view of all the dead. I took a long time to respond. I wrote him that we are all in the same boat. As entrepreneurs we also have a responsibility to others who depend on us.
What do you gain financially from this action?
It brings a little cash into the till, which we can use to pay some bills. That helps us a lot.
Where did you publish the letter?
We put it on LinkedIn, Instagram and Facebook. We got about 60 comments and a few new contacts on LinkedIn. But the direct mail to the addressees of our newsletter had the most impact.
Which voucher is bought the most?
On average, vouchers of €100 were bought most often. But also some vouchers for €300 went away. Even owners of the brands we sell have supported us. This shows that we have become an important partner for these brands.
We think that small fashion producers and multibrand stores need to work closely together in these times. So we want to try out marketplace models. Specifically, we want to place a specific brand at the center of our e-shop for a limited period of time and focus all communication on that brand. In this way, we can bring the brand closer to customers and help producers.
We have also already started to make our shop range more ecological. We six founders belong to a generation that is searching for a meaning. We found it by initially supporting small brands. Today we want to offer a selection of sustainable products.
Many retailers fear that there will be a discount battle as soon as the shops open.
We are following the current negotiations on the clearance sale and the planned measures very closely. We are active in an Instagram group of around 30 other retailers in France and Switzerland who operate concept stores similar to ours. There we exchange ideas. A race for discounts would particularly affect small shops like us because we live on margins. Our hope is that there will be a return to healthier commerce. Starting a clearance sale after the Corona crisis would mean that we will continue exactly as before. But the business system was not healthy before. I think that it would be important to conduct this debate on a larger scale.
France wants to gradually lift the confinement around May 11. Can La Garçonnière survive that long?
We are talking to our banks on a daily basis at the moment and we cannot yet estimate how far our funds will go. Many factors are at play: will all sectors of the economy open up? All of France or just certain regions? When will the state aid come and how much will it be? Will we manage to raise funds? Etc. We do not have the answers yet. The future will tell.