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The Emperor's new clothes - the latest fashion in Greece

13 May 2013 / 18:05:56  GRReporter
5306 reads

Victoria Mindova

Every day in Greece there are updated data on the catastrophic economic situation of the country – GDP has decreased by 25% in six years, 60% of young people are unemployed, salaries have fallen by 35%, tens of thousands of companies have gone bankrupt and loans in the red have exceeded 55 billion euro. However, life in Greece is going on normally. Those who have not yet been fired or laid off are working. Young and old people are going for a walk, celebrating Easter in the countryside, buying presents, drinking coffee or eating at taverns with friends and family members. ''Business as usual'', as the English would say.

That is why the comment of an acquaintance of mine I heard earlier this week surprised me a little: "There is no good choice of clothing or shoes in Greece any longer. It's not like in the old days."

Initially, I thought this view was far-fetched. However, it turns out that the real market situation justifies this observation. Although the shops in Athens are not reminiscent of the empty stands in Sofia during the Bulgarian crisis in the mid 1990s, the Greek retailers have significantly reduced both the volume of orders and the assortment of goods offered.

Although the shops in Athens are not reminiscent of the empty stands in Sofia during the Bulgarian crisis in the mid 1990s, the Greek retailers have significantly reduced both the volume of orders and the assortment of goods offered."The fewer goods and poorer collections that we see in the shops are the result of the lack of available funds in the market," Sotiris Antoniou, who is a representative of the trade union in Athens, told GRReporter exclusively. He stresses that the importing and processing companies that use foreign raw materials in the production are experiencing the most serious problems.

Specifically, the activities of fashion and clothing retailers have considerably changed over the past two years. "Until 2010, the retailers, who had long-standing business relations with foreign suppliers, placed orders for the next season without prepayment or against a minimum prepayment. This applied only for serious retailers, of course. Then, imports had drastically declined because the bank guarantees of the local retailers were not recognized abroad. Even insurance companies did not insure the commercial orders due to the high risk to which the country was exposed. All this has begun to change over the past nine months."

Representatives of the branch recognize that it is very difficult to supply a wide variety of goods at a time when there are no available funds. Now, they are seeking to balance the volume of the orders for the new season and the quality offered at the right price, which should be sufficient for the retailer and attractive to the customer.

The lack of liquidity in trade is not only due to the reduced income of the consumers and the decreased turnover. "It is critical to complete the recapitalization of the banking system in order for us to be able to see the amount of capital that will be available to finance the market," says Antoniou. The retailers point out that the stability of the banking sector is crucial for the development of their activities. Loans at low interest rates could help improve the supply and marketing activities in order for the companies to achieve better results at the end of the season. However, the available options will be clear only after the completion of the recapitalization process.

Meanwhile, balancing the needs of customers and suppliers puts new restrictions on the retailers. They need to have much more foresight as regards the customers’ preferences because the funds available for supply are limited.

It has been two years since the suppliers started requesting the full amount of the order several months before the delivery. Now things are returning to normal, but the options are limited. "Some time ago, there were certain rules on how and when you should pay a particular order, which was valid for the entire industry. Now, the arrangements are bilateral and they are entirely based on mutual understanding and on the long-term cooperation between the Greek companies and their foreign counterparts," states the specialist.

Although the commercial climate is returning to normal, the local businessmen cannot promise the wide variety in small shops, which we knew in the recent past. The big chains remain the strong players in the market and compensate for this gap. They resorted to a rapid policy of regrouping and closed their branches, which registered losses. The remaining shops of large retail chains are supported by the mother companies abroad, which provide them with guarantees to ensure constant renewal of the product range in the shops in the country.

Promotions and discounts in the middle of the season are the answer to the difficulties experienced by smaller retailers. The Chamber of Commerce announced Mid Season Sales from the 16th to the 25th of this month to stimulate the market. The retailers report an increase in turnover of 15% -20% during the 10 days of the additional sales in the months of May and November.

Tags: EconomyMarketsTradeGreeceDiscountsPromotions
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