ECONOMY

Production of men’s apparel shrinks with the market awash in cheaper imports from China

The men’s classic clothing market is shrinking, following the crisis that has engulfed the entire apparel industry the last few years, according to a sector report by ICAP. The main reasons for the crisis are the abolition of quotas in third-country (not Greece or EU) exports and the modern trends of fashion, leading consumers to more casual clothing choices. The Greek men’s classic clothing market has declined on average by 1.6 percent every year in the 1995-2004 period and is expected to continue the same trend in 2005 and 2006 with an average fluctuation of 1 percent in quantity. Interestingly, although the demand is covered by domestically produced clothes, local production of men’s classic garments is shrinking. Yet ICAP recorded a rise in imports which increases competition. Once again this confirms the impact that lifting export quotas has had on the clothing and textile industry since the beginning of January 2005, changing the landscape across the whole sector, even in developed countries, to the benefit of third states. Greece’s higher labor costs compared to those of third countries have priced domestically produced garments way above those produced in third states. This has led to many enterprises transferring part or all of their production to lower-cost countries. The same problem is also faced by certain companies that undertake the production of clothes for clients abroad, and which are gradually turning toward third-country units. There are also many firms that used to be involved in men’s formal wear but have ceased production, considering it loss-making, and who have turned instead to importing. Chinese imports in this sector mainly affect trousers, and to a lesser extent suits and jackets. Trousers comprise the bulk of consumption, about 72.7 percent, followed by jackets with 14.9 percent and men’s suits with 12.4 percent. The sector’s problems could be assuaged by an increase in firms’ competitiveness, both through better production and service, or through the better organization of sales networks and the creation of strong brand names, the report proposes. It further notes that in order to create the appropriate conditions, the sector needs to invest in modern technology, allocate funds toward the research and development of innovative products of high technology, and emphasize training human resources. The right marketing strategy for the promotion of products and the creation of brand demand are also needed.