Turkish retail sector facing 'most catastrophic' times amid lira plunge

A leading retailer has said the sector has been experiencing its "most catastrophic" times due to heavy losses in the value of the Turkish Lira, which has hit purchasing power, and a number of new regulations, noting that revenue losses have hit up to 40 percent. 

Tekin Acar, the chair of Tekin Acar Cosmetics and vice chair of the Category Merchandising Association, said there was a rising number of financially distressed retailers and various uncertainties will likely trigger an outflow of foreign investments. 

"We have never faced such uncertain times. We don't even know which new regulation will come out next. No investor will pour money into a country where anything can happen at any time. I am not just talking about the foreign exchange pressure or high rents," Acar told reporters on Jan. 20, as quoted by Reuters. 

He noted that many local retailers have gone out of business while a number of foreign brands have quit the Turkish market. 

Acar also added that retailers with serious financial problems are unable to declare bankruptcy due to the ongoing state of emergency after the July 2016 coup attempt.

According to Acar, the reasons behind the negative outlook in the sector are skyrocketing costs due to the sharp increase in foreign exchange rates and the euro-based mall rents, the decreasing trend in people's purchasing power, the restriction in the number of installments in credit card payments, the additional customs duties on non-EU products, and the dramatic fall in tourist numbers. 

"All these factors have pushed down revenue by 30 to 40 percent … There are many retailers who can only just pay their rents … Our business activity has plunged," he said. 

"Consumers used to be able to buy...