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Law gives carte blanche for discounts throughout the year

19 June 2009 / 21:06:55  GRReporter
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New law is planning to take away the ban of announcing discounts one month before the beginning of the official season sales. This was proposed by the Ministry of Development and it is expected to be voted for in a session of the National Assembly soon. According to this proposal, store owners will be able to announce 10 day sales throughout the year, which should not exceed 50% of the total price.

Against this measure are owners of small stores but representatives of big chains like Zara and H&M are supporting this proposal. It is expected that it will bring the market back to life and it will regulate it, because anyway, during the last few months stores have been initiating discounts. Because of the crisis, a big percentage of store owners have decided that they will start discounting products before July 15th, in order to be able to fill up the empty cash registers.

Let us remind you that for the first time this year, winter discount started from December and continued for about three months and through discounts and promotions, dealers tried to bring to life the consumer interest also during the Easter holidays.

“We cannot understand what this law is aiming to do and especially right before the summer sales. Nobody even turned to us to ask about it,” says Dimitris Armenakis, chairman of the National Federation of Greek Traders.

On the other hand, the representatives of big chain stores believe that this is a step in the right direction to overcome the crisis. “Now that sales are down with 14% and bad checks account for ?1.3 billion, an opportunity needed to be given to all store owners to attract clients,” says Thodoros Vardas, chairman of the United Wholesale Trader Associations in Greece.

The truth is that revenues in the clothing and shoe sectors have fallen with 30% in May and sales in electronic stores are down with 25%.

Another trend, which worries shoe traders is the fact that stores like Zara and H&M are offering shoes more and more. This way, the clothing chain stores are “stealing” between 5% and 7% of the total profit of shoe stores. Due to consumer’s interest, Zara and H&M are constantly expanding the range of offered shoes and in the case of H&M, from September the store will offer shoes from the famous British brand Jimmy Choo. Except for this, Jimmy Choo have signed a contract with H&M for the design of a collection of women’s and men’s shoes, bags and accessories. A strong side of big international clothing companies is that they can sell luxurious shoes and bags on accessible prices.

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