Spanish clothes price war fuels deflation fears
Monday, 27 April 2009
MADRID, Apr 26 (AFP): Faced with declining sales due to Spain's worst recession in a generation, Spanish clothing retailers like Zara have launched a fierce price war that has contributed to the risk of deflation.
The official summer sales period only gets underway at the end of June, but for the past few weeks signs announcing massive discounts have popped up in clothing store windows across the country.
At the flagship store belonging to Sfera, the clothing chain set up by Spanish department store El Corte Ingles to compete with Zara, colourful stickers advertise reductions of up to 30 per cent.
Close by at a Springfield outlet, a chain belonging to number three Spanish clothing retailer Cortofiel that sells contemporary clothes aimed at young people, large signs announce a 50 per cent discount on all long-sleeved clothing items until the end of the month.
"These reductions are part of our strategy to face up to the economic crisis. They are the sort of mid-season sales which are very effective," Ignacio Sierra, the corporate area director for Cortofiel, told AFP.
Spain's clothing retailers have been feeling the pinch since the country entered a recession at the end of last year as the global credit crunch worsened a correction that was already underway in its property sector.
Each Spanish consumer spent an average of 584 euros (757 dollars) on clothing last year, 37 euros less than in 2007, according to a report issued last month by Worldpanel Fashion, a division of market information group TNS.
Three in five Spaniards, or 59.2 per cent, say they have cut spending on clothing and accessories since the recession began, according to a survey published in daily newspaper ABC earlier this month.
More people reported slashing spending in clothing than on any other item, the study found.
"In a period of crisis, reductions, sales, are what work best to stimulate demand. They attract the attention of clients, who feel they are getting a deal," the president of trade lobby group Acotex, Borja Oria, told AFP.
The official summer sales period only gets underway at the end of June, but for the past few weeks signs announcing massive discounts have popped up in clothing store windows across the country.
At the flagship store belonging to Sfera, the clothing chain set up by Spanish department store El Corte Ingles to compete with Zara, colourful stickers advertise reductions of up to 30 per cent.
Close by at a Springfield outlet, a chain belonging to number three Spanish clothing retailer Cortofiel that sells contemporary clothes aimed at young people, large signs announce a 50 per cent discount on all long-sleeved clothing items until the end of the month.
"These reductions are part of our strategy to face up to the economic crisis. They are the sort of mid-season sales which are very effective," Ignacio Sierra, the corporate area director for Cortofiel, told AFP.
Spain's clothing retailers have been feeling the pinch since the country entered a recession at the end of last year as the global credit crunch worsened a correction that was already underway in its property sector.
Each Spanish consumer spent an average of 584 euros (757 dollars) on clothing last year, 37 euros less than in 2007, according to a report issued last month by Worldpanel Fashion, a division of market information group TNS.
Three in five Spaniards, or 59.2 per cent, say they have cut spending on clothing and accessories since the recession began, according to a survey published in daily newspaper ABC earlier this month.
More people reported slashing spending in clothing than on any other item, the study found.
"In a period of crisis, reductions, sales, are what work best to stimulate demand. They attract the attention of clients, who feel they are getting a deal," the president of trade lobby group Acotex, Borja Oria, told AFP.