• Almost every week, an iconic brand makes headlines in France for its poor financial situation: Kookaï, San Marina, Galeries Lafayette, Gap France...
  • Beyond these few examples, the Bank of France is formal: in one year, the number of business insolvencies increased by 51.6%.
  • This increase, which may seem spectacular, is in reality only a slow return to a normal economic situation.

San Marina in liquidation. Twenty-six Galeries Lafayette stores placed under safeguard by the commercial court. Kookai placed in receivership. Go Sport and Gap France looking for buyers... At the beginning of 2023, companies are pulling their faces. From a global point of view? On February 15, the Bank of France published its monthly report on business insolvencies. Cumulatively over the last twelve months (between February 2022 and January 2023), 42,640 insolvencies were recorded, 51.6% more than the previous year.

Should we prepare for a horrific annus 2023, shaken by an explosion of bankruptcies among companies? If there should be an increase, the term "explosion" is not appropriate, says Stéphanie Villers, macroeconomist and advisor at PwC France. Because what we have been witnessing in recent months, and which should continue throughout the year, is rather according to her a "normalization". Covid aid, stemming from the famous mantra "Whatever it costs", has dried up since the summer of 2021. However, "they had artificially kept many companies alive," says Anne-Sophie Alsif, chief economist at the Bureau of Economic Information and Forecasts (BIPE). According to the expert, there would be between 6 and 13% of "zombie companies", which would have disappeared without massive government aid.

Covid-19 has not destroyed, it has anesthetized

Let's go back to the group photo. Admittedly, this total of 42,640 insolvencies over twelve months is much higher than what we have experienced during the Covid-19 years. But it is 17% lower than the pre-pandemic level. In 2019, 51,145 crashes were recorded, compared to only 29,845 in 2020 and 27,609 in 2021. The situation has therefore recovered slightly in 2022, but "the process of 'normalization' is far from over and should continue throughout 2023 and 2024," warns Anne-Sophie Alsif. So we might as well prepare for other Camaïeu and San Marina in the coming months. Especially since the process is "slowed down - or nuanced - " by the good economic health of the France, "between very low unemployment and some public aid, including the tariff shield or remnants of the ''Whatever it costs''", develops the expert.



Dissecting the detailed data of the Banque de France, we see that the sectors that experienced the most insolvencies before the health crisis (construction, trade and car repair) are... the most affected after the crisis. In the same way, the sectors least affected before Covid (industry, transport and warehousing) are still the least concerned currently.

In other words, "the coronavirus has not upset the order of things or changed the companies most affected. He only paused, "persists Stéphane Villers. Recall in particular that with regard to the French mid-range, particularly hit in recent months, the signs of a loss of speed dated well before patient 0 of Wuhan. The sector has been losing 5% of turnover per year since the economic crisis of 2007-2008, said Pascale Hébel, co-director of a marketing consulting firm, in October 2022.

The slow return to normal

It is therefore a return to fate and business as usual, according to Stéphanie Villers: "We may have forgotten it for two years, but the economy has always worked with many failures, crashes, and, conversely, business creation. " Darwin applied to capitalism: only the most suitable survive, she explains. "Without state aid, a company that is not able to modernize its productive apparatus ultimately finds itself in an unbalanced situation."

So we rest assured (as we can), things - except for two years - have always been like this. And the dreaded worst-case scenario for 2023 is not yet written: "For us to be able to talk about an explosion of business failures, it would take a much, much higher number. Nothing says today that we are moving towards this hypothesis, "reassures Anne-Sophie Alsif.

On the contrary, after a difficult 2022, things are improving, judges Stéphanie Villers: "Inflation is slowing down and could disappear in 2024. China is reopening after months of a Zero Covid policy. Contrary to what one might think, the economic news is pretty good. There may still be turbulence in 2023 and 2024, but in the long term, we should return to a favorable situation. So 2023, annus not so horribilis?

  • Economy
  • Enterprise
  • Camaieu
  • Galeries Lafayette
  • Economic crisis
  • Coronavirus