UK businesses operating in Greece are making emergency plans as the country teeters on the brink of an exit from the eurozone.
A number of high street names have stores, both owned and franchised, in Greece, including Marks & Spencer, Monsoon Accessorize, Laura Ashley and Mothercare.
On Tuesday, M&S chief executive Marc Bolland said the business continues to trade in the country, where it has 28 franchise stores that mainly sell clothing with takings at around 60% to 70% of normal levels.
“We are closely monitoring the situation and we have scenarios in place in terms of what could happen,” he added. “Day-to-day situations can always change.” He declined to provide further details.
Stephen Sidkin, chair of the fashion law group at Fox Williams, said: “UK brands and retailers should be reviewing contracts they have with businesses in Greece and then they can make a decision about how best to proceed.
“If they have stock out there they can make a decision whether to take the view that things will work out or whether to take back the stock from a retailer.”
There are also concerns about the knock-on effect on Greece’s fellow eurozone members.
Debenhams has a network of franchise stores in countries including Turkey, Cyprus and Bulgaria. Trading director Adam Rose said: “At the moment we’re not being affected by what’s going on in Greece. If it looks like it’s going to mushroom out or spill over into other countries then we’ll look more closely at what we need to do.”
Alex Bennett, fashion business specialist at foreign exchange provider Smart Currency Business, pointed out that retailers will also be worried about currency risks.
“As the eurozone is the UK’s largest export market, a Grexit would have implications for UK exporters to the region, particularly if the euro is significantly affected. A weakened euro against sterling would reduce UK exporters’ price competitiveness in Eurozone markets.”
European leaders had given Greece until Thursday night (July 9) – after Drapers went to press – to table plans for a third bailout programme or face being kicked out of the single currency.