Nike is leaving Greece. On Friday, January 29, the major retail brand dropped a bomb on the retail industry throughout Greece. Nike, from its Dutch subsidiary, announced that it will close about 300 stores selling mainly sports goods in Greece by October 27, 2021.
According to reports from moneyreview.gr, Nike issues arose in Greece right after the outbreak of the Folli Follie (Greek jewellery brand) scandal. In 2018, many large Greek groups tried to get the company’s contracts, however Nike chose a third solution:
Until then, as it’s main representative and limited direct presence (Ermou shop, etc.), Folli Follie had chosen to leave the Folli Follie contracts which bound it to expire and to begin discussions with its representatives in neighbouring countries, such as Italy and Turkey. In order to take over the region of Greece, which due to it’s size was deemed better to receive this management.
Since 2007, Folli Follie has established a long-term relationship with Nike through an expanding network of wholesale and retail outlets, with a total of 19 stores in Greece and Cyprus, and 29 stores in Bulgaria and Romania. Folli Follie was told by Nike to retain all existing contracts in Greece, Bulgaria and Romania until their contractual expiry date.
Of course, this approach alters the bargaining balance with the traders here, who will face higher supply rates in an atmosphere where pricing has little control, because of e-commerce rivalry.
Circles that follow the developments in the market for sports goods note that if the adventure of Folli Follie had not preceded it, Greece might have assumed this position as the regional hub of the company.
According to reports, Italian businessman Antonio Percassi has secured ownership of the Nike regional hub. Percassi has tons of retail experience, in 1976 after meeting the Italian billionaire Luciano Benetton he took over management of Benetton stores. He also brought Zara to Italy in 2001 and opened the first Starbucks in Milan in 2018.
This will be a huge loss for Greece as more than 1400 jobs will be lost throughout the country. Ironically, Nike is named after the Greek Goddess of victory. Nike sent a letter stating that Greeks will no longer be able to buy Nike products after October 2021. “Your business strategy no longer matches NEON’s strategic plans and needs ,” the Nike European Operation Netherlands letter said.
Nike has already cut off supplies to businesses that worked with it through Folli Follie (the Greek jewelry company that went bankrupt). The major retail brand Nike has raised questions of credibility with its business partners in Greece regarding credit adequacy and solvency. With an already 10 year crippled economy, strict Covid lockdowns, and the loss of 1400 jobs this is not good for Greece and her economy.
See how Nike got their logo and name from the Greek Goddess of Victory:
Nike has been plagued with years of controversy and allegations of child labour in Cambodia, Pakistan and China. While Greece does not manufacture any Nike products, the removal of Nike from Greece will push Greeks to purchase online from neighbouring countries.
While Greeks may be in a never ending spiral of a ongoing 10 year economic crisis and now a nationwide lockdown one thing is for sure. A Greek always likes to wear a nice pair of running shoes. Many Greeks prefer to wear major brands like Adidas, Puma, Converse, New Balance and others. However, Nike is a household name that will be missed by many culturally and economically.