Greece is reborn from the ashes: tourism and ‘fast fashion’ drive fashion in the country

Greece leaves the pothole and returns to attract foreign investment. Tourism is being one of its engines of growth and one of the mainstays for the recovery of the luxury and fashion market in the country. In parallel, the crisis that the country is still going through consolidates the drift of consumption towards more informal and affordable garments, which continues to favor the expansion of giants such as Inditex or H&M.

Clothing sales in the country grew 2.3% in 2018, to 3,569 million euros (3,908.8 million dollars), and it is estimated that they will increase by 2.2% more in 2019, according to Statista data. Despite this, trade in the sector continues to be far from the 5,834 million euros (6,389.5 million dollars) generated in 2010.

Despite its economic situation, The size of the Greek fashion market is above that of other countries with a population of around ten million inhabitants. Thus, the fashion market in Portugal stood at 861 million euros in 2018, and in Sweden, at 2,434 million euros. Spain, with 47 million inhabitants, places its fashion expenditure at 5,080 million euros, according to the latest data from the statistical agency.

With the beginning of September, Greece lifted the limitations to withdraw cash, one of the last measures imposed during the crisis. A year ago, the country ended eight years of financial rescue, a program that involved significant macroeconomic adjustments and the recapitalization of banks. Greece was the last country in the European Union to leave behind such a program, after Ireland, Spain, Portugal and Cyprus.

Greece thus began a new stage with greater economic independence, although its situation is still complex. Between 2010 and 2018, the Gross Domestic Product (GDP) collapsed by 25%, to 177,000 million euros; GDP per capita sank 22.5%, and unemployment rose from 9.5% in 2009 to 20% in 2017. The forecasts of the International Monetary Fund (IMF) mark a rise in GDP of 2.4% in 2019 , 2.2% in 2020 and 1.6% in 2021.

"Greece has now entered a period of economic growth that places its evolution above the major economies of the eurozone”, The IMF explained in its latest economic report on the country published last March. "It must persevere in the effort to digest the legacy of the crisis and bet on necessary reforms that guarantee the continuity of this path," said the agency.

Tourism in Greece generates 20.6% of the country's GDP, twice the world average, which stands at 10.4%

Part of this growth is supported by tourism, which generates 20.6% of the country's GDP, twice the world average, which stands at 10.4%, according to data from the World Travel & Tourism Council (Wttc). In 2018, this sector grew 6.9%. The boom Tourism that revives now the country has reactivated the interest of international luxury groups, which are once again set in this country.

This is the case of Louis Vuitton and Dior, who have taken advantage of the foreign visitors in the region to launch a pop up stores in their islands. A couple of years ago the Nammos Village shopping complex for luxury brands opened its doors on the island of Mikonos. In 2018, this mall received an average of 2,000 visitors a day.

But nevertheless, The purchasing power of the country's citizens has not yet recovered to pre-crisis levels. In 2018, GDP per capital in Greece stood at 1,900 euros, 1.1% more than in the previous year, according to the Organization for Economic Cooperation and Development (Ocde). For 2019, it is estimated to reach 2,100 euros and, by 2020, to drop to 2,000 euros. The indicators are still far from 5,600 euros in 2007.

GDP per capita in Greece stood at 1,900 euros in 2018, half of the 5,600 euros in 2007

This new environment has underpinned the expansion of large distribution groups, while advancing ecommerce, although it does so at a slower pace than in the whole of the European Union for fear of fraud, according to Euromonitor. Commercial income in the axes primeof the country are also an indication of the recovery of fashion consumption.

The pedestrian zone of Boukourestiou in Athens, with an average income of 2,400 euros per square meter per year, according to the latest report Main Streets Across the World, from the real estate consultant Cushman & Wakefield.

Another of the most sought-after poles in Greece is Tsimiski Street, the commercial epicenter of Thessaloniki, the second city in the country, with commercial rents similar to those of other European cities such as Nice or Naples.

Giants like Inditex and Mango, have begun to take advantage of this scenario. Zara's parent company has 164 stores in the country, 47 of which are Zara and 29, Bershka; Mango, meanwhile, adds eleven establishments in Greek territory; Tendam has six, while Tous has two.

European exports to Greece have also increased in recent years. In 2018, sales from other member countries to the Hellenic market stood at 2,180.1 million euros, 4.3% more than in the previous year. In the last five years, Community exports to the country have grown by 10%, according to Eurostacom data. Italy is its main supplier in fashion Europe, together with Germany, Bulgaria and Cyprus.

While the European fashion industry has been reestablishing ties with the Greek market, the US has continued to divest the country. Sales of fashion items from the United States to the Greek market were only 2.3 million dollars in 2018, also marking an 11.5% decline from the previous year. In 2009, US exports in the sector reached 7.8 million dollars.