On their lunch break or after a long day of work, the employees of the offices of La Défense regularly came to allow themselves a moment of relaxation at Patrick’s. At the foot of the Grande Arche, its beauty institute, “the biggest on the whole site”, has been swarming for nearly 20 years with white-collar customers and shopkeepers, curious to test its tanning booths, its body treatments or face. Same success in his second salon, located a stone’s throw from the Champs Elysées, where senior executives have long crossed paths with salespeople from the main avenue, who have come to relax for a few hours before returning to their posts. Despite a first receivership in 2013, linked according to Patrick to “change in consumer behavior” and “bad press” around tanning booths, “business was going pretty well”. “In 2019, my annual turnover amounted to 408,000 euros. Then everything went into a spin,” breathes the sixty-year-old.
Because after the multiple demonstrations of yellow vests on the Champs Elysées, the great transport strike of winter 2019, the Covid pandemic, its confinements and its curfews, its clientele suddenly disappeared. “Above all, it was telework that killed us,” explains the manager, whose shops were placed in compulsory liquidation in December 2021. “At La Défense, employee attendance has dropped by 85%, so I let you imagine that state aid was not enough. In 2021, my annual turnover had plummeted to 125,000 euros. For us, the crisis was insurmountable”. Three years after the start of the pandemic, Patrick is far from the only entrepreneur to have gone out of business.
According the latest study by Altares, which specializes in business information, 8,950 safeguard, reorganization or judicial liquidation procedures were thus recorded between July 1 and September 30, 2022, an increase of 69% compared to the summer of 2021. rate “never observed for 25 years”, notes the firm, which adds that the bar of 38,000 failures over twelve months has been crossed. “With 10,000 more procedures over one year (+34%), France is back to the default levels of summer 2020, but is still far from the 53,500 procedures observed at the end of September 2019″, it is nevertheless specified. “You have to keep in mind that between 2020 and 2022, around 50,000 companies were spared thanks to state aid. Now, failures are starting up again, as expected. What we had not imagined, however , is that their pace would be so fast and severe”, deciphers Thierry Millon, director of studies at Altares.
“I know the neighborhood well… It’s over”
According to the firm, catering remains the most affected sector, with a 150% jump in the number of failures in the summer of 2022 compared to the same period last year. Strongly impacted by teleworking, retail and personal services businesses are also suffering a serious setback: +103% failures for convenience stores, grocery stores or supermarkets, +109% for clothing stores, and +94% for hairdressing salons and beauty salons – their shortcomings now exceed the pre-crisis threshold. The younger and smaller the companies, the more fragile they seem: companies between zero and five years old account for 45% of all openings of procedures, and three-quarters of failures concern VSEs with fewer than three employees. “Most often, these are companies that were already in difficulty, and which have not been able to bounce back”, analyzes Thierry Millon.
“As soon as I felt like I was getting my head out of the water, a new curfew fell, telework was made compulsory. I had hoped for a long time, but it was a vicious circle”
“Behind all these figures, there is us”, comments Juliette*. At 59, this Parisian had to resolve to close her beauty salon in the 8th arrondissement a few months ago, for lack of being able to pay the owner of the premises. “At least 80% of my clients were employees of the district, who came to work but did not live there. There were also those who frequented hotels for seminars or business meetings… With teleworking, they never came back.” On the manager’s desk, bills pile up, unpayable. To save her business and pay off her debts, the 50-year-old struggles “like crazy”. She takes out a personal loan of 80,000 euros, asks to stagger her payments, tries to develop an additional home care activity. Nothing works. “As soon as I felt like I was getting my head out of the water, a new curfew fell, teleworking was made compulsory. I had hoped for a long time, but it was a vicious circle”. At the end of 2020, she was finally evicted by her owner, then placed in compulsory liquidation. Last April, during a meeting at the commercial court, the judge told Juliette that she was not the only one to fall. “I know the neighborhood well … It’s over,” he would have slipped, understanding.
“I owed everyone money”
Beyond these forced failures, some entrepreneurs have chosen to voluntarily cease their activity, for lack of perspective on the months and years to come. “They thought they were catching up on their post-crisis turnover, but inflation came to hit them hard. Consumer behavior has changed, and many independents have resigned themselves”, explains Jean-Guilhem Darré, general delegate of the union of independents and VSEs (SDI). For Cécile *, the decision was imposed on a Friday evening, after months of fighting. After a long discussion with a lawyer specializing in commercial law, she decided last April to place her two clothing and accessories shops in the center of Versailles in compulsory liquidation. For five years, however, her stores have had “crazy success.” “I had a good local clientele, who came to do their shopping for lunch and in the evening. They were used to it, and moreover supported me a lot after the first confinement”, she recalls, then moved by “the collective momentum of the inhabitants” who came to consume “downstairs from their homes”.
But little by little, this great enthusiasm has run out of steam. On the shelves, her customers say they no longer need pretty heels, dressy dresses, jewelry or big brand handbags. “They stayed at home, wanted warm and comfortable sweaters. They consumed less, and I could no longer sell my goods,” says Cécile. Sales, end-of-year celebrations or restocking are not enough. Gradually, the manager can no longer fill the gaps. “I was barely getting paid, I owed everyone money. I was in real moral and physical fatigue. I made the decision to close… And then I collapsed,” says- she. Despite the nights of “two hours of sleep”, the anxiety of the next day’s payments and “this terrible feeling of failure”, she resists. “I know it’s not a management error. It’s the context that weakened me, and I couldn’t do anything about it. So I decided to act quickly, and that’s surely what helped me hold on.”
“They lost everything”
The day after the liquidation, Cécile contacts the association 60,000 Rebonds, which tries to help entrepreneurs who have had to cease their commercial activity. Very quickly, she meets a psychotherapist, exchanges with other freelancers, takes stock of her financial situation, creates a new profile on LinkedIn… And finds a job in a shop in her town. “Now I am hired with a real salary on a permanent contract. I am rebuilding myself, even if it has been very difficult”.
Philippe Fourquet, secretary general of the association, confirms. “Often, we find entrepreneurs in an impressive state of demoralization and fatigue. Some don’t even open their emails or mail. We first help them to hold on morally, then we take stock of their situation. Only then do we help them find a professional project. According to him, half of the entrepreneurs who have experienced a business failure since the Covid finally go back to the workforce. “The others do not abandon independence, however, and are accompanied by coaches, other professionals or young retirees in their choices”, rejoices the former business manager.
For Dimitri Pivot, founding president of the Second Souffle association, which also supports entrepreneurs in difficulty, this notion of “regaining self-confidence” is essential. “Most never thought it would come to this. They have lost everything, and have an imperative obligation to generate an income. We are here for that: we redirect them to bridging or more permanent job offers”. An initiative that could prove very useful in the months to come. According to the founder, between 400 and 450 entrepreneurs will have been supported by his association by the end of 2022. At the end of 2021, there were only 350. “And since 2019, we have had a 35% increase in requests. It’s only accelerating,” he warns.
*Names have been changed.