(Bloomberg Opinion) -- It may be just 77 days until Brexit, but in one area Britain and France are getting closer: retail misery.
While the U.K.'s stores are struggling with weak consumer confidence ahead of the divorce, the French have been put off from going to the shops by the yellow vest protests. They began in November and turned violent in December, a key period for holiday purchases.
Cie Financiere Richemont SA said on Friday that its sales in Europe in the third quarter were hurt by the demonstrations in France, which led to store closures for six consecutive Saturdays. This follows a warning from Fnac Darty SA, the electronics and home furnishings retailer, that the disruption had cost it 45 million euros ($51.9 million) in sales in France and Belgium.
Given Paris's strength in high-end retail, it is not surprising that stores there are suffering.
Rogerio Fujimori, analyst at RBC Capital Markets, says that on average European luxury goods groups derive about 6-7 percent of their sales from France. He estimates that sales there fell about 10 percent excluding currency movements in the fourth quarter, which suggests global revenues for high-end European groups declined about 1 percent.
The damage could be widespread in retail. Retail association FCD says that about 300-500 million euros of revenue was lost across hypermarkets, department stores and other chains from the November to December protests.
And, the boost to online sales that might have been expected if consumers couldn’t get to the shops doesn't seem to have materialized.
E-commerce association Fevad and pollster CSA estimate holiday shopping traffic was flat year-on-year, with an average 289 euros spent online.
That indicates that the political uncertainty in France is weighing on consumers' willingness to spend, something that's also happened in Britain. Indeed, the French consumer confidence indicator from the national statistics office slumped to the lowest in four years in December.
When it comes to luxury sales, the impact right now doesn't look as severe as it was in the wake of the terrorist attacks on Paris in November 2015. But the current disruption shows no sign of abating, so the drag on retailers could be a prolonged one.
And the damage to high-end spending might not be confined to France. John Guy, analyst at Mainfirst, points out that Asian travelers usually visit a number of cities during their trips to Europe, so any cancelled plans could have a broader impact.
With concerns about a Chinese slowdown heightened by Apple Inc.'s warning last week, instability in Europe is the last thing that luxury goods groups – or their investors – need.
When it comes to bling, a yellow vest is not a good look.
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Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.
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