13th INTERNATIONAL TEXTILE AND FASHION CONFERENCE FÉDÉRATION FRANÇAISE DE LA COUTURE

REINDUSTRIALISATION: DREAM OR REALITY? Saturday, April the 27th, 2013 / 11.00 am   Moderator Laurent Raoul, Professeur permanent - Supply Chain et systèmes d'information, Institut Français de la Mode, Consultant associé, XL Conseil Speakers Corinne Fénéon, Directrice du Métier Prêt à Porter Femme, Hermès ; Daniel Juvin, Président, Grandis Philippe Pasquet, Président du Directoire, Première Vision SA ; Patrick Pergament, Directeur Général, Petit Bateau ; Ralph Toledano, Président de la Division Mode, Groupe Puig Laurent Raoul Hello everybody. "Reindustrialisation: dream or reality?" is a difficult theme if ever there was one. The economic climate and information in the media about industry and employment are creating a feeling of doom and gloom. This is what we will be thinking and talking about this morning, and together we will be examining the place of industry in fashion and design. Just to be clear, we're not talking about the mass market, we aren't in the realms of H&M or Zara, but in the world of designer brands, whether it be young designers like those here at Hyères or the major luxury houses and designer ready-to-wear. Reindustrialisation, and by implication reshoring, currently has political, sometimes controversial, connotations and there are tensions around the subject. What is the view of the reshoring of labour, with a significant social impact on France and Europe? I'm also adamant that the subject should not be seen just from the point of view of France; we will be talking a lot about Italy, which is an extremely important partner of the French and other European creative industries. We will not be looking at the political side of things; behind it lies the vital question of the cost of labour in Europe and in France particularly, with the debate on working hours, social costs and labour taxation. I would like to suggest that we stay within the realm of business and the intrinsic competitiveness of an industrial company. Nor will price be the central aspect of the discussion, as we are starting from the principle that 1  

  manufacturing in France or Italy is expensive. Today's question is therefore not "how can we be cheaper?", but "why pay a lot?". If price was the only factor in competitiveness, we would all - to take an analogy from the automotive sector - have arrived today in Tata Nanos, the cheapest car in the world. I didn't see any parked outside, which shows that the question of price is not the only balancing variable of world trade, whether we are talking about BtoB or sales to consumers. Price is not necessarily the right line to go down, so why pay more? What extra do we bring in a creative industry that justifies a higher price? These competitiveness variables are incomparable quality, creativity and technical innovation. This is what drives us, what we have to provide in exchange for the high prices found in the French and West European industries. We are all familiar with creativity as most of the people here work in fashion. Being late, experiencing the rush of the shows, getting your collections out on time, updating your range - these are everyday activities. We will also be looking underneath the surface at the responsiveness and local presence of our creative industries. If you are agreeable, we will start by looking at two tables. The first is a gloomy, worrying industrial table that contains some figures to remind us of certain tangible realities: the cost of labour for textiles or clothing in France (source: Werner) according to a 2008 study that I have updated: > France and Japan, 30 dollars per hour; > Northern Italy: 26/27 dollars per hour, so within 10%, and those who produce and purchase directly from manufacturers in France or Italy know that the face value of labour is not all that different; > Southern Italy: 21/22 dollars; > Spain: 18 dollars; > Morocco: 3 dollars; > Coastal China: 2.30 dollars; > finishing with Bangladesh at 0.30 dollars. As you can see, we started at 30 dollars and ended up at 0.30 dollars! Cost is quite clearly an issue, but I'd like us to try for a minute to put it to one side to look at what lies behind these questions of competitiveness. The second set of figures (UNEDIC) cross-references the business sector and the type of job occupied: > 1977 – 650,000 jobs in the French textile and clothing industry as a whole; > 1997 – 250,000 jobs; > 2010 – 90,000 jobs. As I'm a scientist, I've extended the curve to 2019 = zero. It's a harsh hypothesis for all of us, but it exists: zero in 2019! So much for the French scene. Other weak signs are coming from Italy, which had been helping to compensate for our industrial problems, and which is still one of the preferred suppliers of the French brands, European luxury brands and designer brands, which shows that the country is going down on one knee. We know that where previously there were five companies for a given quality, now there are only two, sometimes one, sometimes none at all. One last scene, which comes down to the sovereign power of the government, is training: we are having trouble recruiting. The labour situation in France is very strange, with jobs on one hand, unemployed people on the other and this impression that they never meet. In textiles, in fashion, there is a sort of scarcity of young professionals who could come into our businesses with desire, with talent, with passion, obviously particularly into the industrial side, which is suffering from a disastrous brand image in the eyes of the younger generations, whether they be technicians or engineers, but equally creative and from business schools. We see it in particular at the IFM. It is the dark side of power that is terribly threatening, terribly worrying, and I don't want us to underestimate it this morning. We are talking about something that could become serious, and to ignore it would be to bury our heads in the sand. Fortunately for us, there is the bright side of the picture. The French and European luxury brands, the large groups and smaller designer brands have held and still hold a dominant place in the fashion world. They have, particularly compared to their Anglo-Saxon competitors, shown that their economic models are relevant, whether you look at Chanel, Hermès, LVMH or Kering today, these are extremely strong and significant brands, which somehow reassure us, provide employment and create an industrial stimulus that cannot be ignored. The figures that can be obtained at the IFM and in the profession show, if of course you exclude the atypical, but honourable, models of Hermès and Chanel, with much larger figures, that the average value of production that is still French 2

  in women's slay and pick ready-to-wear is in the region of 10 to 50%. You can see that the stimulus is relevant, real. If you took just 10 to 30% of the large pie that is the luxury market and the designer brands, that represents several tens of thousands of jobs, and could generate others. This is the equally positive side; we must not ignore it, especially as young brands are on the up - I'm thinking about footwear. We won't restrict ourselves to textiles and ready-to-wear this morning; we will think about accessories, leather goods, costume jewellery (not fine jewellery), footwear and therefore brands like Louboutin and Pierre Hardy, which are extremely vibrant and relevant, which export internationally and stimulate production, not always in France but more in Italy. We can see that there is a relevance and, still on the bright side, that these brands have understood that they had to build manufacturing and craft activities onto their businesses; both Hermès and Chanel have demonstrated this, as well as LVMH and Kering (France Croco, Richard Ginori in china, which Gucci is currently taking over) - it all proves that the major groups have realised this and are seeking to secure their supply and make it more reliable. Another observation, and Patrick Pergament who is here with us for Petit Bateau will attest to this, is that midrange brands are still producing in France. If it can be done in the mid-range, it must surely be just as easy at the luxury end of the market! There is also in the textile industry, in a sector that is being massacred, a group well known in mid-range and mass market women's fashion, and that's Lucien Devaux. In a sector where everyone should be dead, groups like Lucien Devaux exist and continue to have companies with positive, profitable balance sheets, and show that even in apparently crushed areas, production can continue in France and/or Italy or somewhere nearby with high cost structures. This proves that there is something else apart from the face value and that if the mid-range can do it - more as an exception, as the employment figures show - it should be easy for the luxury end. Think back to the watch-making industry in Switzerland in the 1980s, which was pronounced dead. People were saying the type of doom-laden things that you might hear now: it's over, the Swiss workforce and Swiss industry won't be able to withstand electronic mechanisms and atomic watches. Today, the Swiss Jura is overflowing with jobs, with up to 20 to 25,000 in the French Jura according to Les Echos. Of course, these are people that are going to work in Switzerland, they're not French companies, but with a cost structure (according to the Werner study) of 40 dollars per hour! It's like France, but worse, and yet the Swiss watch- and clock-making industry has reestablished something that makes sense and has proved that with exceptional creativity and technical skill, the question of cost ultimately becomes less important. I also mentioned training and the problem of finding workers, and there are however some initiatives that must be praised. Yesterday evening, I was talking to Dominique Barbiery, who will be with us this afternoon, about school visits to small businesses organised by Chanel; this is arousing interest in going into the artistic trades. These trades, in style schools in particular, are now regarded in a much more positive light. It's different for industry; there is still a long way to go but we are also starting to see initiatives that could provide much inspiration. To start off my round table, I would like us to have a demanding, realistic but also passionate view of the industry. I love the industry; I was born into it and just because your feet are in gutter doesn't mean your head is. I personally know some people here who know what it is to go and see designers and seamstresses, to look at handrolled edging, hand-stitching, etc. It can be great to see what comes out of our small and larger-scale industries. It's this desire and passion that I would like to share, but in a realistic and harsh way, because let's not forget that my curve reaches zero in 2019, and I don't want you to ignore that. It might send shivers down your spine, but you'll see that our contributors have a lot of warmth to give this morning. We're going to free ourselves from price to tell you a lovely story... there is a marvellous company, a renowned brand in France, that produces in France: Hermès. It embodies a sort of clarity that we should all have: "Hermès is the spearhead, this is where it's going to happen." You could say that after all, when you are Hermès, it must be really easy to produce in France. So, just before I hand over to Corinne Fénéon so that she can enlighten me, I'd like to remind you of her career. After completing academic business studies and obtaining an MBA from INSEAD, Corinne spent several years in financial roles at the Chanel group and then became Financial Director of Eres in 2003; she later became managing director and presided over several wonderful years of growth and profit. In 2007, Corinne joined the Hermès group, first in the women's ready-to-wear development department under the leadership of Vincent Huguenin, and then as managing director of women's ready-to-wear, in which role she joins us today. I'll ask my question again: is it that easy to manufacture in France? Corinne Fénéon Hello everybody. I'm very proud to be able to start on a positive note. Indeed, "Made in France" is a reality for Hermès that is lived out as an inescapable principle for all of Hermès' business lines. It's also about protecting know-how, paying attention to our craftsmen and women and actions. It was discussed at great length as part of "The Year of the Contemporary Artisan" at Hermès, and it's a very important part of our strategy. It's also our contribution to protecting jobs in France, as Hermès employs over 3,000 people at its leather workshop and around its textile division in France. 3

  I have a great example of how the "Made in France" principle is lived out at Hermès, which pinpoints one of the key areas that we all talked about when we were preparing for this round table, and it's the desire to be daring, the desire to take risks, the desire to say yes that all of the contractors and all of the players in the sector expect, and which is absolutely vital for developing the "Made in France" concept. I'm going to tell you about a winter sports line that we have just launched. Hermès is not a fashion brand; the origins of ready-to-wear at Hermès do not lie in couture at all, because it was founded by a saddler and a leather worker. The beginning of textiles at Hermès dates back to the sports that were fashionable in the 1920s and 30s, i.e. water sports, winter sports and golf. The sport chic look at Hermès is the start of our ready-to-wear story. The idea was to relaunch these activities and place them at the heart of our growth. We started with swimming costumes last year. This year, we moved into winter sports and skiwear. The idea was to produce technical clothing for skiing in all conditions, while retaining the elegance inherent in the brand. We looked for external partners initially for the development phase, as we didn't have the right skills in our workshops. When we were looking for partners, some people said, "We're overwhelmed, we really aren't sure we can help you," and others said, "It's not our business, we don't do it at all in-house, we never set out to work for third-party brands, but we are drawn to it anyway because it's a challenge, an exchange of know-how and outlooks, and we're going to try to do it with you." We found a partner that specialises in the world of sport, who I will pay tribute to at the end, with which we carried out the entire development phase. Hours of research into materials and finishes led to the development of technical clothing that you can ski in at temperatures of minus 20°C, adapted to meet Hermès' requirements in terms of quality and elegance. The idea was obviously to be able to produce in France, but things are complicated as there are no technical clothing manufacturers in France! Our country used to have flagship ski brands that we were very proud of. Then there was a gradual move to offshore outsourcing and now everyone produces in China or in the Eastern European countries because there's no other choice; there isn't really a luxury, upmarket position in this area. We were really this close to abandoning the project because for Hermès, bringing out a new line made in Romania would be difficult to accept. Having talked to our contractors, those who are close to us in the production of our ready-to-wear collections, one of them threw their lot in with us. It was about to take over a workshop that produced technical clothing and thought it would be able to find the necessary skills. We said, "It's on a really small scale, it's for Hermès, it won't necessarily be thousands of items, but we do hope to expand the line, which will be made in France, and we will be very proud to label highly technical clothing as Made in France." The project came to fruition because it was a joint development. That's what made it a success. Hermès alone couldn't do anything, it's this natural extension of contractors, this one in this case, who was able to say yes, who took a chance because the result was not guaranteed, particularly in terms of volume. It contributes the same amount as those of us in-house who carried the project, and it deserves a mention by name: Avance Diffusion, and more particularly the Degré 7 brand, is our technical partner, who gave us legitimacy, and FIM (France Inter Mode) in Fougères, a contractor who works with several ready-to-wear brands, who will be developing the technical winter sports business. It's a positive note to start on and it answers the question: yes, Made in France is possible - difficult, but possible. Laurent Raoul An important thing to take away from that account is the ability to say yes. Ultimately, it's clear that it's not a matter of price, as you met with negative responses from large players who didn't see the worth of the visibility that such an exclusive brand offered them. It's an opportunity that probably would have been seen as a godsend in other countries, but it's not necessarily that simple. Another point of view comes from the mid-range brands with Patrick Pergament, managing director of Petit Bateau. I didn't know that you had a single production site with 1,100 workers. When you imagine all these people who go to work every morning, it brings back memories of images from the 1960s of workers arriving by bicycle at the Renault factories. We haven't seen anything like that for a long time. With an industrial site and an average selling price of 20 euros for Petit Bateau items, the average price including tax paid by consumers, we can see that the question of "I can easily pay 30 dollars" is really not that simple. This is an interesting case because when you hear in the luxury segment that it's not going to be possible, you come to more challenged, more competitive niches. Let's take two issues about these mid-range and high-end sectors: firstly, this capacity provided by the availability of local production facilities, a single site where development and production take place side-by-side. Is it important to have these two areas together? You could say, because we know that the creative industry calls for development, "We're not that bothered about production, it doesn't matter, once the product has been developed, we'll get it made elsewhere for 0.30 dollars." You didn't make that choice.

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  Secondly, even on those product ranges for which you could say that where they are made becomes less important, is the fact of being made in France still meaningful for that brand? Are you concerned today with keeping it up? Does it make a particular contribution and bring particular enlightenment that increase the credibility of the lovely Petit Bateau brand, which has been inspiring us since we were babes in arms? Patrick Pergament Hello. By way of introduction, I would like to say that it can only work if there is an economic reality and a genuine will behind it. Without the will of certain people, and I mean the shareholders of Petit Bateau, of course there would not still be 1,100 workers in France. We made the choice at a given time, we stuck to it and we managed to make it profitable. That's really the vital point. Let me just say a few words about Petit Bateau. As you said, we are a very old company as we were founded in 1893. This year is our 120th anniversary. We have a factory in Troyes, where we employ 1,100 people. We are one of the leading industrial textile employers in France. As you reminded us, I work in a completely different world from the luxury sector; we are a mass market brand because we also sell in hypermarkets. We mustn't forget that it's a part of our turnover with a level of production quality that is extremely important. We therefore have a significant industrial base. How did we manage to do it? Through a sort of economical adjustment between the factories in France and the factories in Morocco and Tunisia. The factory in Tunisia opened 30 years ago now, and the one in Morocco 20 years ago, and they belong to us. They are entirely managed by Petit Bateau and we are present all along the product value chain, from buying the yarn to knitting, dying and assembly. I should point out that we purchase the yarn for 85% of the volumes we produce; it is a highly integrated model. Again, if we hadn't made the industrial decision at a given moment to have factories outside France as well, we wouldn't have 1,100 employees in France today, but 0. We had to find an economic balance. A large part of our operations currently takes place in France, and another part takes place outside France. I really must emphasise the aspect of the will that lies behind it, because it's not only rational decisions that prevail. We have found a sustainable, durable solution, but you also have to have shareholders who have a long-term vision and who are it in for the long haul to perpetuate an industry in France. Is the fact of being made in France meaningful in terms of exports? I don't work in the luxury world, but if I look at brands like Ralph Lauren, Burberry and Calvin Klein, these are brands that really capitalise on their original nationalities but don't produce a thing in either the United States or England; they moved their production far away a long time ago and it doesn't mean that they don't sell anything. In some countries like Japan, Russia and China, you have to label items with the original country of production, and this doesn't stop them selling in those countries. I think that the original country of production can be an important condition, but it is not an absolute prerequisite. Having creativity and quality abroad can work very well. What we are seeing in the world today is changes with regard to these assessments of quality, origin, etc. It is very striking to see that in China, for example, where everyone is careful about everything, particularly product origin since the baby milk scandal, the Chinese are really starting to be interested in where things are made. These changes are important and being made in Europe, even for cheap products, can be a decisive factor. In Japan, you see lots of shops that also give the origin of the fabric: a lot of products are of mixed production and are displayed with these dual origin markings. I would like to say that where a product is made is clearly a factor that adds value to the product, but this is not the only point. We have an establishment in Troyes where we carry out both development and industrial production. There are many advantages to this. When you know how the product you manufacture is made and what it's made from, you are in a completely different situation from when you ask other people to manufacture it. There's real technical know-how. You know about the price, how it is broken down, etc. In the end, the fundamental point is innovation. As soon as you have development and production alongside each other - you could mention this hyper-creative dimension of Italian companies - it works, and there are real advantages. On the other hand, when you are a merchant and a manufacturer, the disadvantage is that it's a lot of money. You have to invest huge amounts, if only to maintain or replace industrial equipment, and that's money that you won't be investing elsewhere. We know that these days, you have to expand internationally, you have to sell electronically, you have to open stores - it takes a lot of money. It's a real choice between "should I invest in the latest technology so that I can be more innovative" and "should I develop my business?" At a given point, the choices are made quite quickly and that's an important point.

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  I wanted to mention our experience at Petit Bateau in the last two years: We come from an industrial background, we have stores but we are first and foremost a brand that was created by engineers and manufacturers. When you inject creativity into a factory in France, several interesting things happen. In the world of luxury and fashion, development is vital, it is not unlimited as we were talking earlier about the importance of costs, but creativity is absolutely the key to this and industry has to adapt. When you come from a world that arose out of industry, you're not in the same situation: development thinks about industrial production, it is already constrained in relation to its productivity, its prices, its structure, is excessive consumption of materials, etc. Production that focuses too much on the industrial aspect will not develop its creativity sufficiently, and conversely, if creativity doesn't pay enough attention to industry, it can be fatal. To take the example of an SME like Petit Bateau, where you have to make money at the end of the year, you have to be extremely careful not to develop products that can't be produced on an industrial scale and end up losing money. We are caught up in a very complex equation that poses a real challenge: how can we inject creativity while respecting our industrial constraints? In the world of industry, you need people who understand creativity and in the creative world, you need people who understand industrial know-how so that it can be used to full effect, so that they can innovate but also use the bases of industry, which also needs visibility. Bringing the two together is a real challenge that is honestly not simple, but fascinating, and we experience it every day with our teams at Petit Bateau. These are really important, huge changes. Laurent Raoul We can take away two messages from that: firstly, the fact of being made in France can bring symbolic value, but it is not the main motivation and it's not enough to justify extra cost to export markets; it's just a little bonus. Secondly, the interest is in having development and production not too far away from each other. You highlighted the specific role of development. When we talk about industry, we often think about the factory but we don't think about those who provide the product. In between the designer and the factory there are the development people, a little-known, poorly represented group who don't enter the minds of the younger generations. To go back to the curve we were looking at earlier, which I dramatised rather, I don't think that we have had this 30-year period of de-industrialisation without reason: it's cheaper elsewhere, the Italians are nicer, etc. How do we see this trend today when we witness these industries, from the point of view of those involved, not from the point of view of the authorities, analysts or the press? I'm thinking about what view Ralph Toledano might have on this subject; he has been in this business for over 25 years, at the helm of brands such as Laroche, Lagerfeld and Chloé, which used to produce mainly in France; these days, you represent the Puig group, with a portfolio of very interesting brands, some of which will be able to help shed light on how they operate with regard to the issue of development and production. You sit on the Executive Committee of the Fédération française de la Couture, which makes you an insider who also has to look at the profession as a whole. Personally, how have you viewed the last 25 years, and how do you see this gradual shrinking of the contribution made by French manufacturers in the portfolio of designer brands that you know or that you see operating through the federation? Ralph Toledano Hello. My first observation is that my view of changes in production in France in the last quarter of a century is much more sombre than what we have just heard. If we go back 20 years, what became of Boussac, Bidermann, Gaston Jaunet... We hardly produce shoes any more in France. What's left in terms of menswear? Think back to our powerful leather industry! The reality is that strong trends towards de-industrialisation have been at work for around forty years, and that for the products we're interested in, the French industrial fabric is a veritable field of ruins. My second observation is that although a considerable number of jobs have been lost in the industry, many more have been created by the high-end design companies, in their workshops and studios, in marketing, advertising, electronic sales, retail sales. Our profession is the pride of France, our business leaders are welcomed as if they were heads of state when they visit emerging countries. If there is one activity that makes a considerable trade surplus, it is the one represented by the Fédération française de la Couture. We have been responsible for some great success stories. 20 years ago, fashion was a cottage industry, now we are world leaders who make a significant contribution to the creation of wealth in this country. In the 80s and 90s, de-industrialisation was already well under way, the wave was breaking but we didn't think that it would affect luxury products. And then there was a real turnaround. 10 or 20 years ago, women dressed head to 6

  toe in a designer label. Now, they buy from places like Zara, H&M and Mango. Lifestyles and the distribution of spending have changed. The price factor has remained very important. If you examined how our prices have changed over time, I'm sure that you'd see that they have increased by far less than average prices in other business sectors. But that's not the perception that retailers or consumers have. As you said about Hermès, producing in France was a matter of pride, a basic principle, an axiom. We knew perfectly well that Italy was 10 to 15% cheaper than France for slay and pick, but, call it economic patriotism, we stayed in France! And then there was a change in 2004/2005. What happened? First of all, we noticed that some of our competitors on Avenue Montaigne and Faubourg Saint-Honoré were offering certain models at prices significantly lower than ours - they had dared to relocate. And these products were selling remarkably well. I won't mention our Italian friends, who were charging the same prices but guaranteeing that items were made in Italy! So I said to my team, "Organise focus groups, go and see your clients and retailers and ask them how important the Made in France label is." To my great surprise, they concluded that being made in France was not fundamentally important. Creativity, quality and price were the key factors in success. This was in 2004/2005. Then the 2008 crisis occurred. I won't name the most prestigious stores in the world that started to place orders on the basis of price alone! We had to react quickly and we started to look closely at offshore outsourcing. We started with trousers and we found excellent quality products abroad at much cheaper prices than those charged in France. Then there was outerwear, then blouses. I remember a meeting where, when we had calculated the cost price of a cape made in France, it turned out to be completely unsaleable! My production director said to me, "We'll make it in Mauritius." I refused! The sales people insisted. So I agreed as long as the preproduction sample was submitted to me for approval. When the cape arrived it was really very well made. We delivered it and it sold remarkably well! Then we set up proper processes and rules so that we could manage the split between items made in France and items made abroad effectively. Any good citizen is devastated to be contributing to unemployment, but a manager's job is above all to increase the bottom line! When a product can cost significantly less abroad for the same quality, his duty is to manufacture abroad. What's more, the results could be seen very quickly. Our sales started to rise when they had been falling due to a lack of competitiveness. In the end, what we look for above all in our partners is quality, competitive prices, sensitivity to the product and sufficiently large production capacity. Another phenomenon occurred that considerably changed the lie of the land. These new factories located in the emerging countries were no longer content just with having access to cheaper labour, they also had the intelligence to hire our staff, those who we had trained in France or Italy, and these technicians brought them the product sensitivity that they had been lacking up to that point. The question to ask is why French manufacturers didn't take the same initiative of relocating part of their production offshore - like in the automotive industry - and why it wasn't they who organised the subcontracting! It shows a clear lack of vision and it was a strategic error. Very few companies did what you did, Mr Pergament. And yet there are still certain advantages of working in France: better lead times, the possibility of producing small runs, product development, higher quality on some types of production. Everyone knows that in many fashion companies, some designs are produced very late on and that makes it very important to have French partners who help to develop and refine them as quickly as possible. The same applies to certain product families: evening wear, cocktail wear, very sophisticated pieces, it seems entirely natural to keep the production of these in France. For all that the profession is able to find replacements for people retiring, there are very few young people willing to replace workers in factories. A job as a machinist isn't very motivating! It is definitely a huge challenge that must be tackled as soon as possible. So where will the journey end? What can we do to make sure that it doesn't end in 2019? First of all, I think that we have to consolidate French industry's weaknesses and strengths on the points I mentioned earlier. If we really want to keep jobs in France, we have to take it as read that outsourcing is vital for the creative industries to remain competitive on a global scale. Similarly, if there was transparent collaboration between buyers and contractors, it would surely be beneficial to both parties. But once again, we have to take reality into account: we can't pay twice as much for a product of the same quality! Finally, and to return to my introduction on a general level, our profession as fashion designers has clearly created a considerable number of jobs downstream, and we can only be proud of the success of the Luxury and Fashion industries over the last 20 years.

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  Laurent Raoul I would like to make an observation about evening out costs and the possibility of retaining a portion of the added value: how big is the production pie and what portion of the pie can we keep to prevent the curve dropping to zero? Daniel Juvin, you are one of the Mohicans of the field of ruins. When I look at your career and your partnership with the brands, Grandis is the top-of-mind company! Today, you represent around 500 jobs on 9 sites, you have shown between 1993 and now that it is possible to hold your ground (with the opening and takeover of Spap), often by taking over external forces. You weren't generally on an upward curve, but a steady one. By taking risks and obtaining positive responses from others, you opened up lines in leather, which was not your trade, you started menswear, which wasn't natural for you as you came from the womenswear sector; keeping in mind Ralph's question, namely, "Why didn't French manufacturers try to find the right balance to hold on to development, the key point of contact with the brand and creativity, while organising the evening-out of costs, which was an inevitable phenomenon?" I absolutely agree with this view that some waters can't be held back even with the largest dykes; exceptional strength was required to do it. We are obviously going to talk more about Italy, which found greater strength, but we know that there has to be a balance between what can legitimately be done to be more expensive, closer, faster, more creative, and what we have to have on mass market product ranges. We have heard the buyer's opinion. What's the contractor's opinion? Daniel Juvin Hello. The picture that has just been painted is rather black, so I would like to bring a note of optimism. I think that there are still things to be done in France, on a market where collaboration can occur. When we took over the company in 1993, just after the Gulf War, some people said that it was suicide to take an interest in the assembly market, which had already seen significant offshore outsourcing. We were women's clothing manufacturers and we subsequently positioned ourselves in the luxury sector, not through snobbery but because we quickly understood that if we restricted ourselves to just being a contractor, the continuation of our business would be compromised. We were being asked for more and more services; we needed to support the brands in their development, in the design offices in particular. The other problem that we were experiencing and are still experiencing was the lack of reliability in raw materials deliveries. We deal with very creative materials, with complicated lead times because the material is difficult to develop, and something that was supposed to arrive in week 20 would arrive in week 24, but we would still have to keep to the delivery time! We had to retain our underlying business as a manufacturer but we also had to evolve in our thinking, in our mentality, so that we could become service providers and position ourselves as such for the luxury industry. We engaged in external growth with companies in difficulty or people who were standing down, to build the tripod on which the balance of the company rests, to be proactive, to produce a quality product while being extremely responsive. I had an example last season where we had 2,000 pieces to produce for a customer from the same fabric, which we received 7 weeks late. We had to use a lot of imagination to break down the production process and deliver within a reasonable time. This is the recipe we've put in place in order to stand strong in France. Of course, our labour costs are 30 dollars an hour and if the market price can only accept 10 dollars, we can't follow, we aren't magicians. I think, however, that if we can manage to be extremely responsive, if we are capable of supporting brands in their development, of having a close cooperation between buyers and the service providers that we are, we will win. We aren't going to hold out alone, we will have work together to get things done. I remain sure that the best is yet to come. We have to roll up our sleeves, be imaginative, want to work together, respect the work that others do. We had an experience recently with Hermès, which had a problem with the production of a piece of clothing that was all or partly leather. It wasn't our area, but we still managed to find a solution and now, even though we don't make hundreds of thousands of pieces, it works with people who are in jobs, who are thriving... The industry is extraordinary, it's a fabulous business. Whether it's knitting or assembly, starting from yarn or fabric to end up with a finished product, it's magical, you're making something! You're not sitting at a computer with a table, figures, margins and curves! You have a product! We don't talk about it enough to attract young people to our trades, but one of the next problems will be our ability to transfer know-how. We will have to be brimming with imagination to achieve it. It is important to keep the houses and the production workshops close to each other. We won't just be able to keep the design offices, we have to face up to production, whatever the methods, however it's organised, perhaps looking to balance things out with offshore outsourcing. But we must not lose our know-how, it's the heart of the business, both in development and design, and in production. I am convinced that we have to be able to do it. 8

  Laurent Raoul We've talked about the industrial fields of ruins, we've talked about making, we've talked a bit about textiles. We always see the sector through its downstream industrial expression, the assembly, the embroidery... in the genesis of clothing, we see more the final part, but there's everything that has happened before that and we mustn't forget its contribution in terms of added value. Real textiles, the heavy, dirty, beautiful, industrial world with the beautiful machines we love, fabric production, finishing, spinning, throwing, everything involved in it... Just as a ballpark figure, I remind you that the raw material contributes 35 to 50% in the breakdown of added value in the luxury sector. It is an essential link in the chain of creativity and innovation, and yet it brings an exceptionally heavy burden in terms of capital and technology. When we are talking about reindustrialisation or reshoring, everybody knows that it is easier to reinstate assembly workshops than dyeing plants. Historically, we have worked a lot with Italy; for some luxury clients, 60 to 80% of their supplies are Italian textiles. It's an essential partner when you are talking about reshoring and reindustrialisation. The brands have remained relatively unaffected by the industrial problem, they have transferred their know-how as Ralph said, and have made up for the falling curve with progressive curves. I'd like to take advantage of the presence of Philippe Pasquet, who represents the Première Vision show, the arena and observatory for the global fabric market. The activities of Première Vision and the Première Vision Pluriel group, of supplying raw materials with leather, the Cuir à Paris and Indigo shows, etc., provides this less visible but entirely essential part of creativity. With regard to Italy, I am witnessing what appears to be a worrying reduction in diversity. Is it just an unfounded advance neurosis because it's Italy and they have greater capacity for reaction, or is there a real risk of something happening to our transalpine borders that destabilises us, the small and large creative, luxury and designer brands? Something silently, invisibly threatening us? What is the current view from Première Vision? Philippe Pasquet I have the onerous task of representing the people who deliver seven weeks late... It's a great honour for Première Vision to be invited today, and I'd like to share it with Philippe de Montgrand, a brilliant French textile manufacturer as he is the director of silk goods company Sfate et Combier and mesh web specialist Guigou, suppliers to a number of design houses. To get back to the theme of this round table, reindustrialisation, there is no problem with industry in textiles on a global scale; it has easily kept up with the growth in clothing consumption; there is even excess industrial capacity here and there in certain fields or certain regions of the world. The real question, it seems to me, is fitting the industrial capacity to the demands of its market; we're talking here about the creative industries. This is a highly specific point of view and it has to be approached as such. I'm going to argue in terms of risks. What are the risks, opportunities or needs of the French, Italian, let's say European creative industries, relative to the appropriateness or otherwise of the industrial offering at a given time? The risks are loss of quality or service, loss of choice, loss of creativity, loss of independence, disruption of supply. It seems to me that the real challenge is being nearby. If you put yourself in the position of the creative industries, you cannot say today that there have been fundamental disruptions to supply; what's more, a lot of companies argue that if such and such a textile supplier dies, we'll be able to get an equivalent product from his neighbour. There have been losses of choice here and there; where we had 5 suppliers for a specific quality, there are only 2, sometimes 1, left - it's getting to be borderline. But overall, the sources have not dried up, they have even been able to grow because there has been easier access to an attractive technological offering from the Japanese and an increase in skills in a number of other destinations. For all that, there are currently some worries. We're talking about France, Italy, Europe in general, nearby sources of creative textiles. There are still some excellent companies in France, one of them is here this morning, but entire swathes of trades have disappeared. There is no longer any worsted weaving for making men's suits. It's the same story in Great Britain, where entire trades have disappeared, the same story in Spain, etc. In Europe, there is still one country today that has a general ecosystem that more or less covers all of the requirements of the fashion brands. You can even see in Italy something that has become almost non-existent in other European countries, which is new textile companies being founded. These are generally companies without any production facilities that can choose to participate in terms of creativity, services, the dynamism of the sector, but companies that can only operate because they are relying on an economic system based on custom work. Two examples: in Biella, a major centre for high-end worsted, there are practically no spinning mills left. This means that the weavers of Biella depend on supplies that often come from far away for a vital component of their added value and quality. Even more worrying is the situation in Prato, near Florence, which is still today the leading textile basin in Europe - 110 weavers from the Prato area take part in the Première Vision show. We know that there are two companies, two dyeing and finishing firms that are capable of bringing real added value to high9

  end, sophisticated, creative products; one of these two companies is run by someone over 80 years old, as the family is not sure that it wants or is able to take it on. If these two companies close down, it will doubtless affect 50 suppliers to the creative industries. What is at stake for the fashion brands? Will they tell themselves it doesn't matter and look for the fabric they need further afield? According to our surveys, we know that for those who exhibit at Première Vision - and it's a sizeable panel! - over 50% of their business is done in exclusives, i.e. products that have been modified in terms of colour, texture, treatment, etc., but at the suggestion of textile companies. The brands have ideas, but they don't generally have the technical know-how to make the suggestions. That's where dialogue comes from, and it works on the basis of proximity. It's not impossible to have dialogue between a French or Italian fashion brand and a Japanese or possibly Chinese weaver, but it is much more difficult. This notion of exclusives has spread a lot in the last decade - I'm speaking on the behest of Philippe de Montgrand - but we can see that it is becoming more extensive and that's entirely natural because depending on their positioning and their own creativity, the fashion brands are asking for products specific to them. This work on exclusivity starts off with proposals by textile companies, which become exclusive products on the basis of dialogue, which implies proximity. So ultimately, saying that it doesn't matter that you can no longer get what you used to be able to get in one place, you'll be able to find it further afield, poses a real problem for this element of dialogue, which is absolutely fundamental for the creativity and development of the fashion brands. I just wanted to approach the discussion from that angle. Laurent Raoul As the moderator, I'm here to highlight your points of view and also summarise them, and I have a preoccupation that I would like to take right to its conclusion, that zero curve of mine. I'm going to use two metaphors: either it's the hole in the ozone layer and we all end up asphyxiated and burned by the fumes or, like at Chanel, it's the theory of the embers: when there aren't enough embers left, you can blow all you like but the fire won't relight. Let's start from the assumption that we are going to have a creative industry without industry nearby, with development at a distance, as we have clearly heard that industry and development are not meant to become too isolated from each other for things to remain meaningful. I would like to play a little disaster scenario game: despite some players still in contention, certain backed by major groups, our brands will have tried to secure the most critical points of their supply and production chain. But the landscape will be deserted, with production more in Asia or Mediterranean Europe, and with China aiming to participate in the global game and having the economic means to do so. On the one hand, there's the United States with brands with no manufacturer accessible luxury - with Carolina Herrera, Ralph Lauren, Calvin Klein, Oscar de la Renta, who look for quality in the best place, even if it's made elsewhere, it doesn't matter, they want the best quality. It's legitimate and understandable. On the other hand, there are European brands produced in Asia, with Asia very quickly claiming its share, paying high-value designers as has been seen in contemporary art, with very good Chinese artists with very good valuations. The strategic order of the game might therefore change fundamentally. Is an ecosystem of the European luxury and designer brands, not to mention (we are in Hyères, after all) the small designers who are like pawns in a system that is out of their control, viable? Is this game realistic and aren't we going to end up with brands that do much more marketing than us and manufacturers who will develop their brands much better than we do? Is this an absurd scenario? Aren't we saying that the brand in itself is the big success of the golden years we are living through, that the major creative groups that proved that their designs were relevant would in the end be in more danger in the long term? The question is open to both my guests and the audience. Ralph Toledano After the time of "the same luxury product for all", we are feeling the need for more individualisation, the need for more creativity. I've never met so many young designers who've said to me, "What's my dream? Azzedine Alaïa!" That's very significant! I think that two poles are going to emerge in the Fashion industries. On the one hand there will be the large companies, where the key values for success will be marketing, process and supply chain optimisation, and on the other hand, there will be the resurgence and development of small brands, highly creative niche brands with ultra-selective distribution. Laurent Raoul Is it a risk, or will we be able to make European designs? Ralph Toledano But of course! Let's not forget that Paris is the world capital of fashion, everybody dreams of showing in Paris! Yes, creativity is essential, even the big operations need it to stand out. Five or ten years ago, everyone prided 10

  themselves on having the same shop all over the world, with the same colours, the same materials, etc. Now we're in the opposite situation! We need to be surprised, to stand out. While some brands have successfully sold the same product lines in Japan for decades, in China it only took a few years for consumers to tire of them and look for difference and sophistication. From the floor, Dominique Jacomet, General M anager, Institut Français de la M ode Congratulations on an excellent round table! Who would have thought a few years ago that we would be putting production at the heart of the discussion? I have two observations. Firstly, when you are the world leader in fashion and luxury, as France is, you need a local industry. It reminds me of Mr Tchuruk, head of Alcatel, saying, "My model is the factory-less company," and what became of Alcatel. We have talked about textiles and clothing, but if you take the leather industry, there are more industrial jobs in France in leather goods in 2013 than there were in 2012. Secondly, I was Petit Bateau's neighbour in Troyes for a long time, and there was another concern there, DD, which had problems. Who was DD's competitor? It wasn't a Chinese company or a Turkish company, it was a German company called Falke. In France, we have had three giants of men's ready-to-wear, Vestra, Weil Besançon and Bigman. Who is currently one of the European leaders in mens' ready-to-wear? Hugo Boss. So it's not inevitable. You could have said that the Germans are champions of fashion; fortunately they aren't champions in every segment and we are overtaking them, but it feels like a dream all the same! There are choices of shareholders, but also choices of countries. The successful ones in world trade are Germany, South Korea and China, Colbertist countries. Colbertism was invented, today there is the Colbert Committee, but when you say you are a Colbertist, it's almost a rude word, and I'm not talking about mercantilism, which is the technical name for Colbertism. Let's become a bit mercantilist again. Finally, for those who want to explore the issue further, the IFM has brought out Mode de recherche n° 18 : L'artisanat, la main et l’industrialisation, which can be downloaded free of charge from the IFM web site. Laurent Raoul The subject we haven't addressed yet is training. We all agree on this point, with one basic worry: whether there is 2, 5, 10 or 30% of our industries left, who is going to lead the younger generations? We are all old dinosaurs, I speak for myself, but young entrepreneurs are coming back to the textile industry with plans to produce in France. What are we doing to offer them places in our education systems and companies? The question arises of apprenticeships, the closure of technical training courses, vocational qualifications, etc. The industry is manual, you don't need a string of academic qualifications, I should know because I've been involved with the IFM for a long time: the training is very practical and very technical. We all share the same concern: what can we do with an educational system that is shutting down technical training courses, particularly in textiles, on the possibly justified pretext that the trends are worrying and that after all, you have to guide them to sectors where things are going well? It's like switching off the tap and then being surprised when the bath is empty. How do you approach the question of education? I am on the side of business and those involved who try every day to have a positive balance sheet. What can we do? Do we have to lead the French government to see things differently, or do we have to take over what the authorities can no longer do? Patrick Pergament Before we even talk about training, you have to create desire, young people have to believe that it's possible to work in the world of production. For us in Troyes, for example, these days we cannot find people to come and work in the factory, people who believe in its future. You just have to tell them that it exists, that it's not going to shut. There have been lots of redundancies in the Troyes area, and I'm not even talking about young people, I'm talking about the ones to whom you have to say, "Come back and work in the factory." It's not entirely simple. There is training, but the general message is that it would be worthwhile finding solutions ourselves first. When we have people coming to work in the factory, we train them ourselves. We have set up a workshop with foremen, people over 40 who are coming to learn the trade. For young people at fashion school in Paris, how many of them are prepared to come to Troyes, or go to Normandy? Not that many. We have to make them want to work again, be prepared to live somewhere other than Paris, because the industrial reality, even if it's not very large, is not necessarily in Paris. Corinne Fénéon With regard to training, the problem also comes from the sector's image. Today, the scarcity of labour reported by all contractors is linked to the fact we are paying for thirty years of, "Well dear, we don't know what to do with you, so you can be a seamstress". It was a punishment. This trade is not valued, even though it is an active, artistic trade just like leather work or other crafts, which are highly valued.

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  There are some glaring examples. Magazines regularly produce "Fashion Specials"; the most recent was Télérama, When we talk about the artistic trades, craftspeople who work with their hands, when we talk about leather goods, the leather workers, those who produce, are mentioned (Hermès is often mentioned and that's great). When the subject changes to textiles, we talk about the designers. Obviously they must be valued, we must continue to promote them for the future of the trade, but we must give equal recognition to the quality of the deed and the quality of the thought, and at the moment that's not happening. Young people don't want to be a sample machinist, even though it's just as important a job as the pattern designers in our design workshops. We can't find people to replace those who are retiring, and it's the same thing on the industrial side. We really have to promote the sector again so that young people want to come into it, because it's just as laudable and rewarding as leather work or any other artistic trade. Daniel Juvin I would like to add to what you have said: training, transfer and know-how are the real challenge that we face. As soon as you give an affirmative response to the question, "Does industry need to be close to the brands?", you have to very quickly get around the table to discuss how we are going to implement this transfer of know-how together. The contractors won't be able to do it alone, or the authorities, or the brands; it will be a combination of all of them and their positive energy that will restore the shine to our tarnished trade, reveal once more the world of industry which, I should emphasise, it not inhabited by "blood-suckers", but by people who can be passionate and with whom one can fully blossom. The world of business is one in which people can live very well, where you can find a balance between family life and working life, in jobs that are extremely clean and rewarding, where you can progress, where the future of the profession is not limited to the sewing machine table, where there can be excellent promotions. Today, all foremen and production managers have real authority due to their know-how, which is acquired through experience. A seamstress takes about 3 years to train, a pattern designer between 5 and 10 years, a foreman between 10 and 15 years. We need to give the young people who will be joining our companies prospects, and we can only do that in conjunction with the authorities, the ministry of national education, buyers and manufacturers. This is the equation that has to be solved, and we must sit around the table soon, otherwise we might have trouble tackling what seems to be the real challenge put before us. Laurent Raoul We talked about Germany. Germany and industry, that makes sense; I remember the extremely beneficial force of apprenticeship, which France discovered relatively late, and which is a very good formula for the industrial trades. What is inscribed in the success of the German industrial model is industrial apprenticeship, work-linked training, and we must draw inspiration from it as the industry lends itself particularly well to this approach. This love of industry can only be understood when you are in a factory; from afar, and as you said, in front of a computer, it can't be explained. It is experienced through apprenticeship. Changes have been made in France, but not enough, and the industry needs this type of training. We've been doing all the talking, and I'd like to let you speak. Are there any questions? From the floor, Yann Rivoallan, co-founder of The Other Store Requests for custom products are appearing on the internet - I'm thinking about Burberry trench coats. In the chain stores, booths are also appearing that scan people to produce made-to-measure items, and even without these inventions, Celio is offering a made-to-measure service on its web site. Do you think that this desire for custom products will result in local production or, like at Nike, production lines in Asia that produce custom goods, but are still ultimately thousands of kilometres away? Laurent Raoul This is my area of expertise. It's really option B. The leading manufacturer of custom products is China. The use of electronic technology accentuates the phenomena of offshore outsourcing and makes them wonderfully effective. They have know-how, and many people have gone to China to have a beautiful made-to-measure suit made, with really fine fabric, because it costs nothing. We know that because production times are much longer for custom products than for mass production, paying 3 dollars an hour is even more justified. So, unfortunately for us, it's option B. From the floor, Yann Rivoallan, co-founder of The Other Store Just to reassure you, web sites are still developed in France very often because its an area in which offshoring doesn't work all that well. From the floor, Jean-Paul Leroy, Editor in Chief, FashionM ag I'm going to seem a bit provocative referring to what Ralph Toledano and Dominique Jacomet said about the fact that the French manufacturers of the past failed somehow because it was said that they didn't move offshore themselves, and some examples were given earlier in menswear, but isn't the problem also one of overall margins? When you look at the results of the luxury groups, as soon as they no longer had production units, they didn't share the margin enough with their contractors or subcontractors. The situation is very different for Petit Bateau, 12

  which owns its production unit. If Petit Bateau had been dealing with a subcontractor in Troyes, would there still be 1,100 people at the factory? It’s just a question. From the floor, Dominique Jacomet, General M anager, Institut Français de la M ode An important point in the debate is precisely the German preference for nearshore outsourcing. I think that they have accepted, including in the context of joint management with their unions, the benefit of nearshore outsourcing. The two firms I was talking about have engaged in nearshoring and have increased their workforces in Germany. Today, Germany has more people working in assembly and in the industry in general than we do in France. Then, you do indeed have to note the major revolution in the luxury sector, which has become a vertical industry; the first part was the incorporation of retail, the second was going back upstream. Ralph Toledano I would point out that the company that pioneered the retention of know-how was Chanel, which took over several companies, followed now by Dior. At Jean Paul Gaultier, within the company itself, employees perpetuate this know-how. It's often the done thing to have a go at the luxury groups but in this area, it's clear that they are the ones who have taken things in hand. Laurent Raoul What has just been said will still create a rift between those who can take on a vertical structure and those who can't, particularly the medium-sized brands and young designers. I also have great faith in the human capacity to create something new when something else disappears. And yet young designers and creative companies with capital of 10 to 20 or 30 million euros will have to find substitutes for their production and a way to continue to produce because this industrial verticalisation, by definition, is aimed at groups that are in good health and have been able to work their margins and capital as well as the appeal of their balance sheet in order to continue working on these issues of industrial integration. From the floor, Peter Ackroyd, Chairman, W oolmark As a British person, might I be so bold as to say a word about what's happening in Great Britain? I represent the British textile industry which, 50 years ago, was much bigger than it is today. The forty or so companies that exist in England now have become "ingredient brands". This can apply to luxury brands like Chanel or Hermès, but also to Marks & Spencer. You were talking earlier about the Chinese man who goes to the tailor; if he wants a suit, he will always ask for it to be made from British or Italian fabric, so the survival of the British industry has come from making ourselves "ingredients". Laurent Raoul Thank you. Philippe Pasquet With regard to the debate about verticalisation, I absolutely don't believe in it as far as clothing is concerned; there is too much product diversification and the seasonal effects of fashion are too great for the luxury groups, however financially powerful they are, to play around with vertical integration; what's more, there is a know-how, an expertise in this type of company that causes a problem. There is a lot of talk at the moment in the leather industry about takeovers of tanneries, etc., but the issue is really very different. Verticalisation can only be envisaged in more stable, clearly identified product areas, and certainly not in the fashion products typical of the clothing industry; it raises the problem of the relationship between the creative brands and the textile industries that supply them, as well as the question of the remuneration of creative work. Some textile companies are playing their game very well, but overall, if you look at the statistics, the profitability of the textile companies is too low and above all, too volatile. There has been a lot of talk of Italy; this is a major challenge on a European level. Most of the Italian textile companies have anaemic equity capital. It all went very well while the Italian banking system saw the textile industry as a good risk and while that banking system was very fragmented. Nowadays, I don't need to draw you a diagram, suffice to say that the situation has changed completely. Here at Hyères, we constantly raise the question, very positively, of the renewal of design in fashion, and in the same way in future the question of renewal in the textile industry will surely also arise. Companies usually continue because they are family-based or centred on the passion of individuals, but finance and therefore the price of the remuneration of creative work is a a genuine question to be asked even if, obviously, it can cause a rift within the sector... and a meeting like this. From the floor, Philippe de Montgrand, Sfate et Combier Hello. We are weavers and silk workers in Lyons, silk work being the generic term for the use of fine threads, silk in particular, and suppliers to all of these wonderful houses. The adventure began in 1992, with a much older history that dates back to the 19th century. In 1992, I took over a company that was in liquidation. For information, only one takeover bid was received by the court, which shows that even in 1992 textiles were not very 13

  attractive. In 1993, we took over a second, and so on. The story goes on and we are now a small group specialising in silk and very high-end textiles, and things are going fairly well. The common points with everything that has been said so far are obvious: our rule, our philosophy, is the famous rule of the trinity of quality, responsiveness and creativity. Creativity, that's obvious because it's so simple to go and buy things cheaper elsewhere. Quality, you don't even need to ask the question. Responsiveness, however, is becoming the most important of the three. The world is moving more and more quickly and if we don't adapt to those of you who change your minds a lot, we will die; so there's no choice. The only solution is to adapt, and to do that we have become more industrial, we have made defensive investments, we have gone upstream and downstream of what we know how to do, we have taken over suppliers that are thread manufacturers, we are now silk throwers, we have invested in dyeing, in partnership precisely so that we can monitor quality. And being local, which is not one of the trinity, is a given because to inspect our fabrics, we need to be nearby, it can't be any other way. The temptation to do it has never been serious, but we have had many offers and still get them now, "Why don't you go to China or Romania?" Some Italian companies are doing it. Our philosophy has been to sing the same tune since 1992, that is, we make a quality product while remaining very close to our clients and constantly updating our offering. Of course, we have a core business in the form of our great classics, we specialise in light silk fabric, in our case mousseline, but our offering changes constantly around it. When you are a textile manufacturer, the struggle is exactly the same, the rules are identical, the slight difference is that the capital required is huge. For a young person wanting to start up, it's very difficult. Perhaps the government could think about providing support, not giving money but acting as a facilitator. We obviously have the same problems with regard to training, but at our factories, machines do the work; there are also computers, there is also design, but there are dyeing machines and dye can't be invented, a weave can't be invented. Obviously it's a fine trade, a genuine and magnificent trade, as we are at the frontier between industry and an artistic process, at the frontier between craftsmanship and large volumes. People who join - we employ 120 or 130 people in total - don't leave once they have understood, but they still have to learn. Laurent Raoul Thank you. I'm going to take one last question. From the floor, Laurent Pierrugues, MBA student, Institut Français de la Mode At the same time as studying, I'm working for a French jeweller. I have a question about education. As Corinne Fénéon said, I am part of a generation for which manual trades are not highly valued, they're not seen as "proper" jobs and yet today, I'm convinced that the reindustrialisation of France must come about through the reeducation of the younger generations. You started to tackle the subject but Daniel Juvin, I would really like to hear your opinion about what should be done in real terms. People talk about working with the authorities, with the ministry of national education, but what needs to be done to win over the new generations? Thank you. Laurent Raoul Daniel, what needs to be done? Daniel Juvin We have to take things in hand, we have to provide training, clearly we mustn't wait for things to come to us. As an example, in the business we know that the technical skills are with us, they are not in the secondary schools, particularly with regard to the training of seamstresses, because it's the trade in which we need to make progress. We have to take action in the schools to explain what the industry is, what our trades are, we have to work in partnership with our clients to be sure that we will be able to make progress together and we have to mobilise all the good energy to be able to find or support companies in their training process. I have a fairly simple formula along these lines: I go and see the various bodies. We recently set up a training programme with GRETA (French adult education body), the AFPA (French National Association for Professional Training), the Ministry of National Education, the ANPE (French National Employment Agency), the Regional Council and the Departmental Council and we said to them, "We're going to do training. It doesn't matter if you support us or not, we're going to do it. But be sure of one thing, if you don't support us, we'll tell everyone." They replied, "Stop being mean," and we managed to set up the training very quickly. You have to get everyone in the right frame of mind, have lots of will, and have consideration for people, that's a fundamental factor. I often say it but you can never say it enough: a company's wealth lies in its human capital! Laurent Raoul I am going to act as a spokesman for Dominique Barbiery, who described to us yesterday evening what the company Lesage did in the artistic trades part of the Chanel group by systematically taking in, and spending a lot of time on it, young graduates from style schools, to show them very concretely the work involved in embroidery. It's just one of the modest, effective actions taken. Talking to young people about what you love works. It's one of the levers for the artistic trades. 14

  From the floor, Dominique Jacomet, General Manager, Institut Français de la M ode I would just like to come back on this key question: we have talked about attraction, asking "Do young people want to?" I think we have to inform them first. When you see secondary school students and you tell them that there are jobs in industry, the return of manual work, they reply: "Sir, either my father is talking rubbish or you are," because their parents tell them that industry is over. So we have to inform them and then the vocations will come, you'll see. Laurent Raoul Beyond that, even if there are no jobs in it, saying that you love what you do has an impact. I've seen young people in trades that were said to be lost, but who just had a desire, an emotion about an action, it's as simple as that. We have to pass on passion too. Providing information, loving your job, showing it in the industry with all the desire to bring something concrete back to what we do - because we have surely moved too far towards the virtual - the younger generations can understand that; as Dominique Barbiery said yesterday, it's completely obvious, it's understood and it works. He is now seeing young girls who have a look that doesn't fit in at all with the seamstresses and embroiderers of the old days, with iPhones, iPods, etc., very fashionable, coming as manual workers! So it is possible and that's very good, because the industry suffers from this nerdy image when, even outside Paris, you can do amazing things. With the younger generation, doing it this way will count. In conclusion, to retain this passion, it is essential that the industry shows that it hasn't finished with the philosophy of a union of belts and braces! Thank you.

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