Abstract
Research background: France is one of the leading textile manufacturers in Europe. However, the COVID-19 pandemic has challenged the current practices in the industry. The lack of crisis management characterized by delayed payments, order cancellations, fixed costs, and other unpredictable expenses, turned it difficult for firms to guarantee liquidity and to preserve their economic sustainability. Purpose of the article: To analyse how the pandemic has affected the economic sustainability of Textile industry in France. Methods: Using the financial reports of 57 French firms operating in Textile industry, in 2018-2020, from ORBIS, a financial analysis is performed using the ratios of profitability, liquidity and indebtedness, as well as the profit margin and labour productivity to evaluate how these firms have been tackling the challenges of the recent crisis; and, thus, evaluate their economic sustainability. Findings & Value added: Results suggest that micro firms and SMEs have better financial profitability, display higher levels of liquidity, are less indebted and are more capable to increase their profit margins. Yet, the larger firm shows a higher level of labour productivity, followed by the micro enterprises. Thus, smaller French textile firms appear to be more economically sustainable during the pandemic. This might suggest that smaller firms are more flexible, resilient, and capable to quickly adapt their operations to market’s needs. Such findings provide policy insights on the implementation of the appropriate strategies during times of crisis.
Highlights
France is one of the largest net exporters in the garment and is regarded as the capital of world fashion
The results show that this technology adoption improved labour productivity (USD 3,660 per employee), sales growth (2 %) and return on assets (ROA) (2 %) over a five-year period
According to (Steurer et al, 2005), economic sustainability is classified through its financial performance, competitiveness and the economic impact generated by the firm and its stakeholders
Summary
France is one of the largest net exporters in the garment and is regarded as the capital of world fashion. The Fashion industry underwent major changes with the development of the circular economy. Academic researchers propose methods to develop a more circular and sustainable textile economy (Kozlowski, Searcy and Bardecki 2018) and changes in the whole life cycle of textiles have been implemented. The textiles comprise three main branches: the yarn; the weaving and the fabric finishing. The industry large, is led by several small firms selling a small quantity of highly technical and high value products. In 2018, the French textile industry was comprised of approximately 548 firms with 20 employees on average. The manufacturing of apparel accounts nearly 45% of the market’s total value, while fabrics represent about 30%.
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