Greece’s luxury market shows signs of recovery
After a decade of crisis and austerity, luxury operators are reconsidering a market with significant tourism and much creative energy.
Encouraged by cultural buzz and slow but steady economic growth that is now outpacing the wider Eurozone, brands like Louis Vuitton, Dior and Condé Nast are now investing in the country.
Tourist spending has become particularly important as local incomes have dwindled. Foreigners make up about 60 per cent of the clientele at luxury shops in Athens, while tax-free sales at Attica, a chain of high-end department stores, increased by 15 per cent in 2018.
Locals have developed an appetite for local designers, many of whom established themselves abroad during the crisis. “There is a new trend for Greeks to feel very proud to wear Greek designers, to actually support our own talents and our own country,” says Thaleia Karafyllidou, editor-in-chief of Vogue Greece.
A year after Greece emerged from an international bailout programme, the country’s fashion economy is showing signs of revival. Nearly a decade of economic crisis and austerity took a significant toll on the apparel and footwear sector, which declined about 50 per cent to about $4.7 billion in 2018, according to Euromonitor International. Now, the market researcher is forecasting a return to low-single-digit growth, with spending expected to surpass $4.8 billion by 2022. Greece’s overall economy is forecast to expand by 2 per cent this year and 2.2 per cent in 2020, according to the European Commission, outpacing the wider Eurozone.
Luxury labels are buying in. Gucci is currently revamping its Athens store while Louis Vuitton expanded its operations in the capital during the crisis. Last month, Condé Nast International, which also owns Vogue Business, relaunched Vogue Greece in partnership with local publisher Kathimerines Ekdoseis.
High-end brands are investing not only to capitalise on Greece’s domestic recovery but because they think that tourism will continue to expand. The country with a population of approximately 10 million welcomed 33 million tourists last year, up from 30 million in 2017. Together, they contributed 21 per cent to the country’s economy, well above the global average of 10 per cent, according to the World Travel and Tourism Council.
This year, up to 20 hotels are set to open in Athens, says Areti Darma, managing director of A.D. Communications and Greek communications manager for Louis Vuitton. She adds that foreigners make up 60 per cent of the clientele at high-end stores in the capital.
This translates into boutiques that are created primarily for the benefit of international shoppers. Nammos Village, a jet-set shopping destination on Mykonos, opened its doors two years ago. Louis Vuitton and Dior have hosted pop-ups there, and it carries brands like Oscar de la Renta, Kiton and Linda Farrow. Nammos Village recorded an average of 2,000 visitors per day in 2018, which is significant for an island that only has about 15,000 permanent residents.
“The Greek market is very much a touristic market [and now] there are more people than ever before who can spend 400 euros or with no limit,” says Dionisis Kapsaskis, owner of DK Frames, which distributes Linda Farrow and Le Specs in Greece. Kapsaskis says that Le Specs sales grew by 80 per cent between 2017 and 2018, while revenue from Linda Farrow increased by 12 per cent in the same time period.
While economists have raised concerns about the punitive tax hikes enacted by the government to close the budget deficit, the higher VAT rates don’t really affect shoppers willing to spend at least €150, the minimum sum needed to claim a refund. Attica, a chain of high-end department stores, recorded a 15 per cent rise in tax-free sales in 2018.
“[Tourism has become] an important piece of the market pie and therefore creates a great opportunity that international fashion businesses identify and seek to invest in,” says Evie Klaoudatou, marketing director of Attica.
The Louis Vuitton store in Athens, where the brand expanded operations during the financial
Some of the country’s creative talent found success abroad during the crisis and that has given them a strong foundation to grow off back home. These include Ancient Greek Sandals, which will open a large flagship in central Athens in May; Zeus+Dione, which specialises in using local artisans and textiles for resortwear, and has just opened a big store in the capital; and Callista, a leather accessories maker.
Maria Lemos, owner of Rainbowwave, a London-based wholesale fashion showroom that distributes in Greece, says that successful local brands tend to focus on either accessories or resortwear, with the latter being a tourist favourite. According to Euromonitor, Greeks tend to prefer fast fashion labels for apparel, but they’ve developed a particular willingness to spend a bit more on products with a local provenance. “There is a new trend for Greeks to feel very proud to wear Greek designers, to actually support our own talents and our own country,” says Thaleia Karafyllidou, editor-in-chief of Vogue Greece.
Ancient Greek Sandals retails for around £120 and produces over 40,000 pairs a year. Meanwhile, Callista has found success selling bags at between €300 to €400, with leather pochettes priced at as little as €95. “Greeks are not afraid of wearing Greek brands, which was not the case some years ago,” Lemos says.
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