Swiss retailer Dufry is to buy the duty-free operations of Greek rival Folli Follie, a rare vote of confidence in an economy deserted by other foreign companies concerned over its future in the euro.
The EUR€200.5 million (USD$258.6 million) deal is a bet on tourists continuing to flock to Greece, despite a deep economic recession and social unrest. While tourist revenues are expected to fall in the debt-laden southern European country this year, they are holding up much better than in other sectors.
"Greece is expected to remain an attractive tourist destination, irrespective of the current situation of the economy," Dufry chief executive Julian Diaz said on Wednesday.
The Switzerland-based global travel retailer is buying a 51 percent stake in Folli's duty-free operations, which include a network of more than 100 shops at 46 locations across the country. Dufry has the option to buy the remaining stake in four years' time.
The deal bucks a trend of some foreign companies pulling their operations from Greece, which is being kept afloat solely by loans from the International Monetary Fund and European Union and whose future in the eurozone remains at risk.
Struggling to cope with falling demand in one of Europe's most indebted countries, Carrefour, Europe's biggest retailer, announced its exit from Greece in June. French lender Credit Agricole has sold its struggling Greek unit, and Societe Generale is poised to do the same.
Diaz said more than 80 percent of the sales of Folli's duty-free operations were generated with international customers, making it "de facto an international business located in Greece."
"I believe (the transaction)... represents another big step forward in our strategy to consolidate the fragmented travel retail industry," he added.
Greece's tourism industry accounts for around one in five jobs in the country. Its revenues are expected to decline 5 percent this year, with more than 16 million tourists visiting the country's sun-drenched islands and ancient monuments, slightly below a record 16.5 million last year.
Folli, one of Greece's most successful companies, has about 800 stores in Europe, Asia and the United States. Its operating profit reached EUR€84 million last year, on sales of EUR€290 million.
The company took over formerly state-owned Hellenic Duty Free Shops in 2010. Chinese private conglomerate Fosun owns 13.4 percent of Folli.