Greek clothing sector nosediving

After around a decade of contraction, the clothes manufacturing sector in Greece is still showing no signs of recovery. The current economic crisis, meanwhile, is merely adding to the pressure on the industry in the form of competition from countries with much lower labor costs, creating real liquidity problems for many businesses operating in Greece.

According to a study by the Foundation for Economic and Industrial Research (IOBE), domestic clothing production was in a funk throughout the 2000-10 period, with the sector?s industrial output index showing an overall reduction of 68.4 percent over that period. In the three-year period 2008-10, the situation only got worse, reaching a nadir in 2010, when the sector shrank by 28.5 percent.

The sector has seen no improvement in 2011 either, as first-quarter results showed a decline of 28.7 percent compared to the same period last year.

The Greek clothing sector is characterized by numerous small businesses, often mom-and-pop shops that have been unable to endure the consecutive hits on the sector over the past decade. Even larger manufacturers with recognizable brands are having serious difficulties competing with large international retailers as they have neither the organizational capacities, size or specialized personnel, nor departments for design and innovation.

According to the IOBE study, the path to recovery for the ready-to-wear sector is through investing in technology that will allow manufacturers to produce apparel with a higher added value and a complete overhaul of the supply chain.

The report also says that the sector could also be boosted by policies directed at tighter controls over the quality of imports, curbing illegal trade — which is rampant — and slashing red tape. It further suggests the creation of so-called ?creativity centers? or design workshops, which could help bring more innovation to the sector.