French resellers are facing an almost total shut down of their business operations after president Emmanuel Macron declared that France is "at war" with the coronavirus and issued a total lockdown of the country.
Deaths from coronavirus in France surpassed 1,100 yesterday along with more than 22,304 confirmed cases of the virus.
On 16 March, Macron ordered the population to stay at home and only go outside for essential duties such as buying food or medicines.
Anyone out on the street must be in possession of signed documents stating their reason for being outside of home, checked by some 100,000 police and officials that have been deployed across the country to enforce the lockdown.
Macron said the extreme measures would last for 15 days, telling the French population that the country is "at war" with the virus.
The drastic action has undoubtedly taken its toll on resellers operating throughout the country. The entire population being forced indoors has put a huge strain on internal operations and their customers' appetite to buy products and services.
Speaking to CPI on Thursday, Gilles Perrot, MD of French IT and print reseller C'PRO, said Macron's measures have taken a huge toll on business, and forced him to effectively shut down its sales operations.
He said that 80 per cent of C'PRO's sales people have now been placed on "partial unemployment" and are only working around 20 per cent of their usual hours.
Perrot estimated that C'PRO is operating at only 30 per cent of its usual capacity since Macron announced the lockdown and product orders effectively ground to a halt.
"We kept a minimum capacity, but the business is not here. People don't buy anything. They bought some laptops in the first few days [of the lockdown] to make the home office available, but now that business has stopped. It is difficult to give some figures, but I think our activity will be 30 per cent of our normal activity in the coming days, maybe even less," he said.
"Services are more active, but distribution of products is almost off. Services are going on; we have to maintain, we have to do what we can especially in the home office. But the new business is off, definitely."
Workers affected by the "partial unemployment" scheme are still entitled to up to 80 per cent of their total salaries, said Perrot, which is putting a strain on business.
"This has had a bad effect," he said. "When you know that you can stay home and get 80 per cent of your salary. It amounts roughly to what you'd save in fuel in getting to work," he said.
Macron said the extreme measures will be in place for 15 days, but Perrot thinks these will be extended to at least a month.
He said he doesn't expect C'PRO to be operating at 100 per cent capacity for at least another two or three months.
C'PRO's fiscal year finishes at the end of this month. But the company will miss out on its usual spike in sales in the closing two weeks of its fiscal year .
But, with business grinding to a halt in France, businesses are no longer looking at hitting financial targets, said Perrot, they're simply looking to manage their cash for as long as possible.
"In France now we are more thinking about cash. It's not really a question of making a good fiscal year or not, it is how to keep some cash for as long as possible," he said.
Just a month ago, C'PRO made its biggest-ever acquisition in the shape of Koden - one of France's largest print suppliers with some 650 staff.
But making any headway with integrating that business has been firmly put on hold as a result of the coronavirus pandemic.
"The project with Koden of course is not abandoned at all, but now it is not a priority in these current days," he said.
Any M&A plans for French resellers will also have to be put on hold, he said.
"It is complicated to have anything going on in terms of M&A in the current days. Because the banks are committed to trying to help companies which just don't have any cash to pay the wages until the end of this month, which are many companies in this case. SMEs normally don't have a lot of cash, so if you cut revenues for two weeks then it's just too much for them."
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