Several international clothing brands are preparing to leave Jordan due to falling sales in a retail market increasingly weighed down by rising taxes and reduced disposable income among consumers, the head of the Textile and Ready-Made Garments Syndicate said.
While declining to identify the brands which were planning to exit and when, Sultan Allan said the sector had been “retreating” since 2012 due to a general rise in prices—the sector is subject to 20 percent custom fees, 8 percent sales tax, and a 2 percent income tax—and a general view of garments as luxury items compared to priorities like health, education, and housing in light of the declining purchasing power.
Allan also said a lack of a clear licensing system for the sector had resulted in poorly-planned growth. According to Allan, there is one store for every 650 people in Jordan. While in the United States, the ratio is about one for every 3,200.
Allan called for a unified sales period instead of the random sales that sweep our malls every few months, citing Dubai where the sales period takes place between January and February, and the importance of linking this period to tourism.
He also said his organization had called for a meeting between the representatives of the brands planning to leave, the syndicate, and the trade and industry minister. He said: “There are obviously flaws here, otherwise why would these brands expand elsewhere and shrink their presence in Jordan?”
Allan warned that unless the government offered greater support to the sector, which employs some 60,000 workers, the future of retail in Jordan looked bleak. “We need a new economic vision to revive the sector,” he said.