Lingerie Makers Seek to Show ‘Made in France’ Cachet Can Thrive

Ma P’tite Culotte and Garcon Francais are banking on the perception that no one does underwear like the French.

The two start-ups — the coquettish “My Little Panty” for women and “French Boy,” whose website says it symbolizes the “French lover,” — are among companies showing off their wares at the “Made in France” forum that starts in Paris today. They’ll be joining classic French lace-silk-and-netting lingerie makers like Allande in an attempt to show the country still has an edge in the art of seduction.

“France’s image of fashion and luxury are a strength that would be a shame to lose,” Charline Goutal, the 27-year-old who started Ma P’tite Culotte last year, said in an interview.

Goutal and 30-year-old Vicky Caffet, the creator of Garcon Francais, are among entrepreneurs bucking a trend of fleeing producers that has shrunk manufacturing output in the euro region’s second-largest economy by 15 percent since 2000 and such jobs by 25 percent. As President Francois Hollande strives to rekindle growth and reverse record-high joblessness, he needs people like Goutal and Caffet more than ever.

Entrepreneurs like them are battling high labor costs, the challenges of setting up a company in a country that ranks 31st in the world for the ease of doing business and a 3,200-page rulebook dubbed the “code de travail” that decrees everything from job classifications to training to the ability to fire.

Convinced that high quality, the so-called French touch and supporting local jobs can win clients, Goutal and Caffet are toughing it out, coping with costs that many competitors have fled.

Losing Battle?

Take Caffet. To manufacture his Garcon Francais male underwear, he picked EMO SA in Troyes — where he grew up — south of Paris.

A former knitted fabric and hosiery stronghold, the area’s textile industry has lost more than half its jobs since 2001.

Caffet says he selected cuts and expensive material that “doesn’t end the day in unbecoming creases,” while enabling him to vary models through colors, thus limiting costs.

Seeking to compete with New York-based Calvin Klein Inc. or Australia’s aussieBum, he expects revenue to gain 56 percent this year with foreign sales starting in Spain, Germany, Canada and Japan.

Determined to make products locally, Caffet and Goutal are taking on what is all but a lost battle, as competition from low-cost countries such as Tunisia and China threatens the industry’s extinction. French undergarment output has dropped by 98 percent since 1990, statistics agency INSEE’s data show.

Classic Globalization

Philippe Lefebvre, who created Allande in 1994, says the cost to his company of a French worker is about 40 to 44 centimes a minute compared with about four centimes in China.

Brands from Lise Charmel to Lejaby, some of them born in the 19th century, have mostly shrunk local operations to prototypes and marketing. Some were bought by foreign companies. Aubade was taken over by Switzerland’s Calida Holdings AG (CALN) and Barbara was bought by South Korea’s Namyeung Vivien Corp. (002070)

“I was shocked when Lejaby closed its last factory in France,” said Goutal.

The association created to promote the country’s lingerie says the undergarments remain quintessentially French even though they are not actually manufactured domestically.

“Lise Charmel is a French success story,” said Olivier Piquet, vice-president of the association Promincor and general director of Groupe Lise Charmel, which employs 500 people in Lyon and has even opened a fashion school there. “It has never laid off people for economic reasons and it’s still hiring. Lingerie isn’t only about sewing pieces together. There are so many more professions involved, from the creation and design to sales and logistics.”

Going High-End

French women spend an average 100 euros ($125) a year on lingerie and corsetry, more than in the U.S. and Europe’s five biggest markets, according to an Institut Francais de la Mode study.

Still, only a fraction of last year’s 2 billion-euro purchases were French-made. The rest were imported from eastern Europe, North Africa and Asia, where labor costs are lower.

“It’s a classic globalization story,” said fashion expert Frederic Godart, who teaches at Insead business school, at Fontainebleau, near Paris. “Lingerie brands are connected to France by little more than name and history today. There may still exist a market for authentic ‘made in France’ lingerie. It would require replicating Swiss watch makers’ experience.”

Producers would need to tap their savoir faire to target clients willing to pay more for high-end products, he said.

Based in Le Dorat, in central France, Allande’s Lefebvre says his business survived thanks to door-to-door selling after losing retailers including La Redoute in the 1990s.

Direct Sales

Since starting his brand, which works with lace makers such as Noyon in Calais, he has opened a second factory and forecasts revenue will increase by 14 percent to 16 million euros this year.

“My product became profitable again by targeting the final consumer directly,” he said.

Lefebvre’s ambition is to create a syndicate for French manufacturers to develop the market.

“The challenge is to generate volume while managing costs strictly,” he said.

While the Internet has emerged as a useful tool, it isn’t enough, said Valerie Bonnay, founder of Coracor, a men’s silk underpants business she started in January in northern France.

“Targeting clients who buy Boss or Armani is difficult without a known brand.”

Relying on door-to-door selling as well as the Internet, Chauvigny-based Indiscrete, in southern France, says it may achieve profitability next year.

‘Seductive, Sensual’

Founded by former Aubade executives in 2010, after the brand’s last plant was closed in nearby Saint-Savin, the company targets fine-lingerie amateurs as well as women seeking a tailored fit, including unusual sizes or post-mastectomy wear.

“In a hyper competitive environment, the key is to have no stock, making products as we sell them,” said Didier Degrand, one of three co-founders of Indiscrete.

Meanwhile, Goutal is talking to business angels to raise more funds after her first year of sales beat expectations.

More than half her clients online are men, showing her products, which go by names such as “Capitaine” (captain) or “Chipie” (naughty), have targeted a new market, she says.

“We’re looking at seduction differently, in a way that is less direct and hard-core,” she said. “It attracts women and men – for gifts – because it’s more sensual and suggestive, based on a surprise-effect, sense of humor and partnership.”

Risky Business

The undergarments are made by Les Atelieres, a company founded near Lyon by ex-Lejaby workers.

Goutal — like other French manufacturers — wants the government to help her keep jobs at home. Hollande’s Economy Minister Emmanuel Macron, an ex-banker appointed in August, has pledged to trim taxes and regulations to reboot France’s stagnant economy.

For now, though, manufacturing in France remains a risky business, says Goutal, who has seen some suppliers fold, while others such as Les Atelieres have only narrowly escaped.

“My providers are suffering because the cost of labor is paralyzing France,” she said.

To contact the reporters on this story: Angeline Benoit in Paris at abenoit4@bloomberg.net; Harumi Ichikura in London at hichikura@bloomberg.net

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net; Marco Babic at mbabic@bloomberg.net Vidya Root, Frank Connelly

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