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Translated by
Nicola Mira
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Mar 17, 2021
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French skiing industry estimates €1 billion pandemic-induced loss to retail, manufacturing activity

Translated by
Nicola Mira
Published
Mar 17, 2021

Despite abundant snowfalls in the Alps in the last few days, the skiing season in France is already well and truly over. This year has been the equivalent of a white-out for the local skiing industry. Ski lifts and cable cars have been shut down in French mountain resorts to comply with the health protection measures put in place to fight the Covid-19 pandemic, causing an approximately €1 billion loss of revenue to skiing equipment retailers and manufacturers.


The ski market has had a very tough season, and orders for the next one are expected to be thin on the ground - Shutterstock


“The situation is critical” for the industry as a whole, said Virgile Caillet in a press conference on Tuesday. Caillet is the delegate general of Union Sport et Cycle (USC), the association representing the French sport and leisure industry, a sector that has been severely affected by the Covid-19 pandemic’s impact on the Alpine economy, highly dependent on skiing.

USC has estimated a revenue loss of €50 million to €100 million for skiing apparel and equipment retailers in non-resort areas, of €550 million for retailers in mountain resorts, and of €300 million for skiing equipment manufacturers.


USC’s analysis of the French skiing market - Union Sport et Cycle


In the winter season that is drawing to a close, mountain sport retailers recorded a 73% revenue shortfall compared to 2018-2019, the last season that was not cut short by the pandemic, according to USC estimates. USC represents 1,200 Alpine retailers and 90% of the companies active on the skiing equipment market.

This shortfall “compounds the 17% revenue loss suffered last year,” when the first lockdown in France stopped the season short at its tail end, said Julien Gauthier, vice-president of USC and development director of the Skiset chain.

“Over two financial years, nearly twelve months of revenue have vanished,” added Gauthier, while government aid received by retailers in compensation has been equivalent to only 5% of lost business.

According to USC, one third of specialised skiing retailers are facing an “absolute emergency” in terms of cash-flow. Most of the sector’s revenue is produced in the four winter months - but costs are incurred throughout the year. No fewer than 14% of these retailers stated they have exhausted all their liquidity.

State-backed loans have provided a safety net, but 22% of companies have not applied for them, according to USC, while 19% of them have already used up all the funds. Some 39% of companies have not yet accessed this windfall, which at any rate will need to be reimbursed in a few months.

And with business so flat this winter, Alpine ski retailers have sold very little of their new inventory, and barely utilised their rental equipment. They will therefore be ordering next to nothing to their suppliers.

Ski orders for next year to fall by 70%



This is a “killer” situation, said at the conference Bruno Cercley, CEO of the Rossignol group - the French market’s leader - presenting the results of the group’s winter sport equipment sales in France: approximately €60 million in 2019, €26 million in 2020 and €18 million in 2021, according to the latest estimates. USC predicts that ski orders for next year will drop by 70%.

With fixed costs unchanged, “keeping factories operational in these conditions becomes absolutely impossible,” said Cercley, adding that Rossignol has received little funding. “The [government’s] solidarity fund is a joke. Pre-season orders for next winter will be non-existent and factories are idle. But fixed costs are becoming unsustainable, while we also have to ensure our market survival, continuing to develop new products, maintaining our industrial equipment and fostering our innovation ability, especially in our factories in France. We need urgent short-term measures to weather this unprecedented crisis and prepare for next season,” said Cercley.

Faced with these difficulties, USC is keen to “speak out” to the [French] government - with which it is in regular contact - demanding an extension of the solidarity fund and of furlough provisions for the sector until December 2021, as well as an exemption from social security contributions for the industry.

With AFP
 

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