French stocks win and lose
Sunday 09 August 1998
Half a million people came for the World Cup, which the host team won in July. Fans spent enough on team T-shirts and other soccer souvenirs to rival the Christmas buying season, when stores can make up to a quarter of annual sales.
But crowded hotels and stores were in contrast to quiet restaurants and theme parks.
On the plus side, France's soccer victory helped boost confidence to its highest in more than a decade in July, according to government statistics released yesterday.
"It's amazing what a World Cup victory can do," said David Brickman, international economist at PaineWebber International. "People are feeling good about themselves and the country, having had that success."
The hotel companies, Societe du Louvre and Accor, which set up their own reservations line for soccer fans seeking rooms at the last minute, are expected to show strong sales, analysts said. Accor, the largest operator of hotels in Europe, with such brands as Sofitel and Novotel, raised prices 25 to 75 per cent in the 10 cities where the games were played.
Accor shares have gained 35 per cent this year and Societe du Louvre, which operates the luxury hotel Le Crillon in Paris and the budget chain Campanile, has soared 98 per cent, driven, too, by takeover talk.
Sporting goods retailers such as Go Sport, which operates about 90 stores mostly in France, said they made a killing on T-shirts and jerseys. Revenue from textiles jumped 127 per cent in June alone. "Sales of jerseys exploded, particularly for the Brazilian, Italian and, of course, the French teams," said a spokeswoman for Go Sport.
Shares of Rallye, which owns Go Sport and food retailer Casino Guichard- Perrachon, have risen 32 per cent over the past year.
Beyond the influx of foreign money, domestic money also began to flow as the French team moved toward its ultimate victory. "Most items sold well during the World Cup," said Hugues de Vaulx, a spokesman for the supermarket chain, Promodes, citing a better-than-expected 7.9 per cent gain in revenue for June at the company's 58 Continent stores across France. Promodes shares have soared 42 per cent this year.
Speed Rabbit Pizza was another winner, as fans ordered in TV dinners. "Demand was among the best ever," said Christian Fotie, assistant manager at Speed Rabbit's Kleber outlet near the Eiffel Tower.
Restaurants weren't so lucky. "It was tough getting clients," said Alain Roubach, managing director of Leon de Bruxelles, a Paris-based chain of restaurants specialising in mussels, chips and Belgian beer. Leon de Bruxelles shares have declined 13 per cent since the company said on 22 July that sales for the first six months fell 0.5 per cent because the matches - the world's most-watched televised sporting event - emptied restaurants.
The World Cup was no picnic for other entertainment venues. Parc Asterix, an amusement park 24 miles from Paris, experienced much of the same. "People got their share of emotions and thrills from other sources this year. Football rather than rides," said Marylene Litout, a spokeswoman for Parc Asterix. Asterix shares are down 7 per cent since 10 June, when the games kicked off.
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