PARIS, France — Coming after a wave of terrorist attacks, a string of brazen robberies targeting high-net-worth individuals (HNWIs) — many of them foreigners — threatens to further upset luxury sales in Paris, the world’s fashion capital. Can the French authorities counteract the growing sentiment amongst visiting luxury consumers that the City of Light is not as safe as it once was?
As Luca Solca, head of luxury goods at Exane BNP Paribas, points out, luxury is highly exposed to specific cities. The world’s top ten fashion capitals account for about one-fifth of all luxury points of sale. And, however you slice it, Paris ranks near the top of the list, worth between five and six percent of the overall global luxury market, much of this fuelled by rich foreigners who come to the city to shop.
But the violent mugging of reality television star Kim Kardashian West, who was held at gunpoint inside a luxury apartment building during Paris Fashion Week in October and robbed of millions of dollars worth of jewellery, was just the most high profile example in a spate of muggings targeting wealthy visitors to the French capital.
Last month, Bollywood actress Mallika Sherawat and her partner were attacked with tear gas in a botched robbery attempt in the wealthy 16th arrondissement. What’s more, the A1 freeway that connects Paris to the Le Bourget airport, Europe’s busiest terminal for private jets, has been the site of two tactical robberies targeting HNWIs in the past two months alone. Two wealthy Qatari sisters and a French businessman Philippe Ginestet, the chief executive of a French discount store chain, were both attacked by robbers who forced their targets off the road, using tear gas and other methods to immobilise their victims while relieving them of millions of dollars worth of personal belongings.
When my clients want to shop they come with me and their bodyguards to Milan. Now they don’t go to Paris due to these recent attacks.
“I think foreign HNWIs have moved away from France, on the back of the terrorist attacks in the two key places they'd typically go, Paris and the Côte d'Azur,” says Solca. “Burglaries and hold ups make the situation only worse. London and Switzerland are benefiting as a consequence,” he adds.
“When my clients want to shop they come with me and their bodyguards to Milan. Now they don’t go to Paris due to these recent attacks,” says Lucio Colapietro, a stylist and personal shopper for a number of wealthy Eastern European clients.
The extent to which robberies of HNWIs are contributing to slumping luxury sales is hard to know. But France has seen a drop of 8 percent in foreign tourists since January of this year, according to government figures. Paris hotels that have earned the exclusive “Palace” status have seen a 35 percent drop in sales revenue since the terrorist attacks that took place in the city, killing 130 people, in November of last year.
In more bad news, according to the French Embassy in Beijing, France issued just 320,000 visas in China in the first six months of this year, a drop of 15 percent from the same time last year. Indeed, Asian tourists are turning away from France in droves with a 39 percent drop in Japanese tourists and 23 percent fall in the number of Chinese visitors compared to last year. These are disconcerting numbers considering that Chinese consumers accounted for about 30 percent of the global luxury market in 2015, with more than a third of their purchases taking place outside Asia in cities like Paris.
Some of the concern about the security situation in Paris may be rooted in perception, however. While statistics for Paris itself were not readily available, across France, there has been a noticeable drop in car robberies (600,000 in 2015 compared to 690,000 in 2014) and hold ups (800,000 in 2015 down from 970,000 in 2014). But it doesn’t help that the government continues to maintain an état d'urgence (or state of emergency) in the country, first invoked after the Paris terror attacks last November. For one, this status has given international insurance companies who deal with ultra high-net-worth clients (UHNWI) pause about covering them when they travel to France.
This is a global trend and we have to pay attention to it. These kind of things could happen in any major city.
Mac Segal, a senior security and safety consultant at AS Solution, an executive security firm specialising in UHNWIs, believes the only way orchestrated attacks on wealthy visitors will end is when a heist is thwarted or the criminals are caught and persecuted. “Nothing succeeds like success," he says. "When these hostiles see that what they are doing is working in France, that they are succeeding and getting away with it, they are going to continue to carry on doing it. I think that the threat level in Paris is elevated. But not because it’s Paris, it’s because what the hostiles are seeing is neither the local authorities, nor the clients themselves, changing their strategy.”
This may be changing. On November 7, France’s prime minister convened the Interministral Tourism Committee in Paris, its first meeting since 2003, to lay out a plan of attack. “France must remain the first tourist destination of the world. The government is committed to tourism,” said Manuel Valls, the prime minister of France at the time of the meeting. There, he laid out a 42.7 million euro plan to reenergise the industry. This contained 15.5 million euros earmarked to reinforce the safety of visitors, including a major increase in video surveillance at key locations in Paris and on the A1 highway (including along the stretch where the recent attacks on HNWIs have taken place).
The Fédération Française de la Couture, French fashion’s governing body, has also responded to the current security climate. Working closely with the police, the body has come up with a number of ways to increase the security around the fashion weeks that take place several times a year in Paris and bring a number of wealthy customers to the city who attend shows and make personal orders. This includes eliminating the addresses of the show locations from the official calendar, installing metal detectors at the entrances to venues, and practicing for a range of emergency scenarios in conjunction with the police to ensure security measures are being followed to the letter.
“Ulrich Beck, the German sociologist, said that we are in a ‘society of risk’ and it’s true,” says Pascal Morand, the executive president of the Fédération Française de la Couture. “But we have a strong relationship with the police and we take the security of our events very seriously,” he adds. “This is a global trend and we have to pay attention to it. These kind of things could happen in any major city.”