Retailers in the clothing, sportswear, leather goods and footwear sectors will be able to benefit from a new support scheme to deal with their unsold stock. This exceptional aid will be paid from May 25, 2021.
Seasonal inventories higher than in 2020
Closed since mid-March in the regions most affected by Covid-19, and since April 5 in the rest of France, retailers in the leather goods, footwear, sportswear and clothing sectors have accumulated more unsold goods than last year.
However, the seasonal nature of this stock means that it cannot be sold later, which represents a real loss of earnings for the owners of these businesses.
To help them offset the losses, Alain Griset, Minister Delegate for SMEs, and Bruno Le Maire, Minister of the Economy and Finance, have announced a new financial aid package.
Averaging 6,000 euros per business, it is capped at 80% of the amount of the solidarity fund received in November 2020. 35,000 companies with fewer than 50 employees are eligible for this aid, which will be paid out from May 25.
What are the solutions for selling off unsold stock?
The new scheme has met with a lukewarm reception, with retailers in the sectors concerned generally considering the amount of aid too low in proportion to the value of stocks. According to figures from the Fédération nationale de l'habillement, this is between €100,000 and €300,000 for a medium-sized business.
In addition, only structures with sales of less than one million euros per month are eligible for this exceptional aid, with all others benefiting from the fixed-cost support scheme.
While these seasonal stocks are unlikely to be sold in their entirety when stores reopen, other avenues are being explored by the trade. The possibility ofbringing forward the sale date, or running promotions outside the sale period, has little appeal for retailers, who see their margins reduced.
Many have launched online sales, supported by local grants anddigitization aid from France Num. Finally, it is also possible for retailers to benefit from a patronage tax credit, up to 60% of the amount of unsold stock distributed free of charge to associations.