ECONOMY

Clothing sector steady

The local clothing manufacturing industry managed to withstand the combined pressures it suffered in 2005, according to a survey by the Hellenic Fashion Industry Association (SEPEE) based on the financial reports of 200 companies. Last year was a hard one, dominated by the often rapid decline in the indices of production, exports and employment, combined with the rise in imports from cheap-production countries and the liberalization of international trade with the abolition of quotas and limitations. All this put the clothing industry through a tough test, making survival very difficult. Yet in this adverse climate, the total turnover of the 200 firms remained unchanged from 2004 at 1.57 billion euros, which proves that the industry can resist pressure and that a high portion of companies have adapted to the new challenges. Ninety of the companies sampled (or 45 percent) showed a rise in turnover, with the rest recording a decline. The average turnover per company came to 7.8 million euros, exceeded by 62 companies, while the top 20 companies had 39.4 percent of the total turnover. In gross profits there was a small rise of 3.8 percent last year from the year before, as they reached 460.3 million euros from 443.5 million euros. However, net pretax profits showed a mean decline of 22.9 percent to 52.8 million euros from 68.4 million euros in 2004. The survey confirms the decline of small and medium-sized companies, while big firms enjoyed a 1.5 percent rise in pretax profits. The profit margins of smaller companies shrank to 1.7 percent from 3 percent the year before, while the general average for 2005 dropped to 3.4 percent from 4.4 percent in 2004. The picture is generally better for firms producing famous brand products and selling them via organized networks. Experts argue that the market is now completing its decade of restructuring that saw many inefficient firms bow out. Survival depends on companies strengthening exports, they add.