Spaniards make-do and mend as crisis reshapes consumerism

MADRID Wed Sep 19, 2012 9:23am EDT

1 of 9. Employees work at a clothes repair shop in Madrid August 29, 2012. Hard times are forcing Spaniards to overcome their love of the new; for the first time in a generation, many are learning to fix things when they break - and even to bu y goods second hand. Picture taken August 29, 2012.

Credit: Reuters/ Sergio Perez

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MADRID (Reuters) - Hard times are forcing Spaniards to overcome their love of the new; for the first time in a generation, many are learning to fix things when they break - and even to buy goods second hand.

During the boom years, Spanish consumers developed a cultural resistance to buying old things - or even quite new things if they didn't work perfectly. The economic crisis which fell from the blue four years ago has changed all that.

Many people are now learning the true value of goods, "intelligent buying" is in vogue and consumption habits have shifted from the conspicuous to the cautious.

"In 2007, 2008, people changed their televisions and fridges as often as they changed their clothes," said Jose Carrasco, director of spare parts business Fersay.

Whereas many Spanish companies are struggling to survive, Fersay's sales of electrical parts soared 19 percent in the first half of this year. These parts are typically used to fix broken appliances which would once have gone to the dump.

"It's clear as day that this is down to the crisis," said Carrasco.

Prosperity came relatively late to Spain. While many fellow Europeans enjoyed a sharp rise in living standards in the 1960s, Spaniards had to wait until the end of the Franco dictatorship in 1975, the subsequent restoration of democracy and the country's entry into what is now the European Union in 1986.

But when living standards began to take off, they did so spectacularly. From 1982 until 2008 the economy enjoyed almost unbroken growth, reaching annual rates of up to five percent.

Over that quarter century consumption became flashy and many Spaniards became rather choosy. As the property market boomed, stories abounded of people wanting only brand new homes fitted with brand new appliances.

Spaniards and foreigners who preferred older apartments, willing to put up with sometimes dodgy plumbing or electrics in return for a home with character, were regarded as eccentric.

Frequently Carrasco and his colleagues were surprised how products that were still in good condition were discarded. He put this down to culture. "We're Latin, don't forget. We always wanted the latest car, or television...that's the Latin character," he said.

Now the boom is over. The property bubble burst in 2008, the economy is in its second recession in three years, and retail sales have tumbled for more than two years running.

One in four of Spain's workforce is unemployed and austerity measures designed to slash 65 billion euros ($83 billion) from the budget deficit by 2014 are taking their toll on consumer confidence. The center-right government recently increased sales tax to 21 percent, a move likely to dampen spending further.

All this is helping Spaniards to rethink their aversion to buying second-hand items and holding onto their belongings longer. Forty percent of them bought or sold used items in 2010, up a third since 2006, according to pawnbroking chain Cash Converters.

Seventy percent of cars sold in Spain are now second-hand, compared with just 51 percent in 2007, and half the vehicles on the roads are more than 10 years old. Ironically, scrapyards are suffering their own crisis as people hang on to cars for longer.

Second-hand shops, until recently a rare sight in Spain, are springing up.

"Spain is not traditionally a country where people like to buy second-hand things. In places like Britain second-hand shops are more common, whether there's an economic crisis or not," said Carlos Hernandez, analyst at Planet Retail in Madrid.

Britons and Americans have long rummaged through charity shops, where donated items are sold to raise funds for the needy. The charity model is different in Spain where churches redistribute donated items directly to the poor.

Even this is changing. Non-governmental organization Humana now has 26 charity stores in Spain, compared with 17 in 2009.

"It's true that we've seen an increase in the number of clients in our stores in recent years... although the average spend per client has fallen, in part, because of the economic situation," Humana spokesman Ruben Gonzalez said.

STITCHING AND SAVING

Empty storefronts are a common sight in Madrid now, but in one corner of the city, two businesses are thriving - a furniture repair store and a sewing workshop. Both changed the services they offered to stay afloat during the crisis.

Colombians Armando Hernandez, 59, and Maribel Colonia, 41, found that business dried up at their picture-framing shop when the boom turned to bust. So they put a sign in the window offering furniture repairs and have been overwhelmed by the response.

"Our situation has improved doing furniture repairs because it had become really difficult with frames. Our lifestyle has improved in everything - food, rent. We live a bit more calmly...although it's not like we can save anything," said Hernandez.

The Terracotta workshop in the central Madrid neighborhood of Prosperidad is piled with chairs, wardrobes and tables. People even bring in furniture from Swedish chain Ikea for repair.

Hernandez and Colonia work nine or 10 hours a day and say learning the new skills required has proved difficult - but they needed to put food on the table.

Across the road is A Lan, a Chinese-run clothes repair shop that started as a convenience store. Business is doing so well that A Lan Huang, 47, who has lived in Madrid for nine years, opened a workshop in the same street where several workers are hunched over machines making and repairing garments.

"I had been sewing for 32 years, and I started doing it here because the other shop wasn't going well ... There's more demand now than before, but there's also more competition," she said.

Neighbors say there are often lines of customers waiting to drop off clothes for repair and copying. Originally Huang worked just with her daughter but now she now employs seven people in the workshop.

"This is going to carry on as long as the crisis continues because there's basically a lack of money. Much of the population have had their salaries cut, or are unemployed or have no form of income," said Planet Retail's Hernandez.

LEARNING TO LOVE THE PRE-LOVED

A new kind of customer is emerging. Noemi Logrono, the impeccably-dressed Ecuadorian owner of Figure, a second-hand clothes shop in the middle-class district of Chamberi, said her customers have changed in the last year or so.

Logrono has seen a surge in middle to upper class clients who would not have bought second-hand garments before. They have also become pickier, coming to look for specific items and leaving empty-handed if Logrono does not have what they need.

"I have unemployed clients - architects, lawyers, engineers - who are even asking me for work," she said. "What's in the till isn't going to make me rich, but at least I have work and because I'm self-employed I can support myself."

The shop, which sells some designer items, is kept clearly ordered and the carefully arranged windows mean it does not look like a typical second-hand store.

"One good thing is going to come out of all this - people are learning how to value things," she said.

Planet Retail's Hernandez said that even though the economy is expected to pick up in mid-2013, it will not be a convincing recovery, meaning second hand stores will remain part of Spain's "retail landscape".

Mercedes Cuesta, a 58-year-old housewife, rifled through a rack of dresses after trying on some sparkly shoes in Figure. "Here I can find designer things, and cheap... (Buying habits) have changed a bit because of the crisis, although I did shop in places like this before too," she said.

INTELLIGENT BUYING

In the neighboring district of Arguelles, health worker Ines Serrano was looking for a second-hand car. She wants to save around 6,000-7,000 euros at an uncertain time for civil servants, who have had their pay slashed.

"The cuts are really affecting us, you have to work more, and in different places," said Serrano, who was looking at vehicles with her boyfriend. She spends a lot of time driving on Madrid's highways for her job.

Angel Rodriguez, sales manager at Arguelles Cars, said he now offered cheaper models. "Everything's changed. Six or seven years ago, four or five new cars were sold for every used car, now three or four used cars are sold for every new car," he said.

At Alhambra Cars in southern Madrid, marketing manager Yolanda Lopez said people who would never have considered a second-hand car in the past are now thinking about it.

"Buying a used car means a big saving, which right now is what matters most to people. At the moment everyone's talking about intelligent buying."

Describing the outlook for her business Lopez used a phrase not heard much in Spain these days: "We're very optimistic."

(Additional reporting by Paul Day, Marco Trujillo and Ibar Aibar; Editing by Fiona Ortiz and David Stamp)

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