Ground Zero in Athens Provides Refuge for Londoner Fleeing Costs

Londoner Eleni Kyriacou is building her fashion brand on the ruins of Greece’s textile industry.

The 34-year-old designer moved to Athens in the midst of the debt crisis that shrank the country’s economy by a quarter and put more than a million Greeks out of work. The downturn that decimated the garment industry as banks froze credit is now providing Kyriacou with highly-skilled, low-cost pattern cutters and knit-makers that her hometown of London can’t match.

“I can afford to survive as a brand by being in Athens,” Kyriacou said in her suburban studio, converted from an old apartment bought by her parents when they lived in the capital three decades earlier. “In London you have to make money from day one to survive because there are so many overheads.”

In Athens, which provides about half of Greece’s gross domestic product, some entrepreneurs are finding opportunities amid the crisis even as the government and European officials bicker for a fifth year over the terms for releasing bailout funds. Some of the capital’s precincts are pulsing with renewed activity as property taxes and lower incomes squeeze out old tenants and a fall in rents draw new businesses.

“The huge internal devaluation that has taken place in Greece may well have made the economy more competitive,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. “These gains are now being undermined by the fallout from the bitter standoff between Greece and its creditors.”

A total of 166,455 new businesses were registered between April 2011 and April this year, according to the Greek General Electronic Commercial Registry, compared with the closure of 144,809 companies in that time.

Taking Chances

In the capital’s Agia Irini square, the fabric stores that once dominated the lower end of the main shopping street of Ermou are being converted into restaurants, bars and cafes. Only the torrents of color from bolts of fabric propped outside shop windows on smaller side streets provide a glimpse of what was once Greece’s textile Mecca.

Symeonidis, a former textile store in the square, has been renovated into the Osterman bar and restaurant: racks that once held fabric now carry bottles of wine. Some establishments flick at the square’s history: one business is called “Tailor Made.” The Aetos yarn and embroidery shop is the only traditional establishment left in the square.

Alexander Adraktas, 40, the owner of Osterman, says people are seeking out potential opportunities where they can.

“It’s basically been the same story for the past five years, whether it’s 2012 or now,” he said. “What are the options? You either emigrate or go live with your mother. People are taking their chances, opening up their own business because there are no jobs.”

Rising Rents

Adraktas leased the Symeonidis building, a shop that had been closed for a year, funding the business with about five friends.

“There were no loans,” he said. “I don’t know of anyone in this business who has been able to get a traditional loan for the past few years.”

The renewed activity helped annual rents on Ermou street rise by 9.1 percent in the 12 months to September last year, according to Cushman & Wakefield, a bigger recovery for a major shopping street than in Portugal, Ireland and Spain.

Still, the scars of Greece’s fiscal journey are visible on the city’s streets, where homeless people camp in the doorways of abandoned buildings amid the spurt of new cafés and bars.

‘Milk or Bread?’

Ioanna Kyng, an artist and mother of four, has moved her small vintage clothing store three times in the past five years as business dwindled.

Now she’s finding it hard to compete with bigger rivals like the “Kilo Shop,” which sells vintage clothes by weight and has branches in Paris, Tokyo and Amsterdam. The franchise has opened an outlet in the Athens flea market district of Monastiraki, appealing to cost-conscious Greeks.

“I might have no customers for 10 days,” she says at one of the three cafes that have sprouted on the pedestrianized street of Ipitou in central Athens. Her shop is on the ground floor of the apartment she lives in on the same street.

“At times I’ve found myself wondering what do I buy today: bread or milk? Milk or bread?”

Londoner Kyriacou’s ability to cap costs in Greece is the flip side of the tale of the decline in the country’s textiles industry.

Supporting Industry

The sector buckled under energy costs that are double the European average. It was also hit by banks pulling the plug on funding, forcing businesses to consider closure, according to the Association of Hellenic Textile Industries and Hellenic Fashion Industry Association.

Kyriacou says the Greeks could do more to support emerging businesses and young designers, mirroring the support provided in the U.K. for the fashion industry.

“In London they give you funding for doing anything that’s going to help exports,” she said. “They won’t give an English designer funds to do London fashion week; they’ll give you money to do Paris fashion week, to do New York, anything that’s going to potentially mean you’re going to end up exporting.”

In Athens, she’s relying on the Internet. Through the web, she’s been approached by a new company planning to market original designs to the Chinese market.

“They found me on the Internet on a website,” said Kyriacou. “Did it matter if I were in London or in Athens? It didn’t make any difference at all.”

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