Greaves hoping the pound will rebound

But Mr Greaves, whose firm has stores in Gordon Street and Sauchiehall Street, said it would be “hard to justify” passing on the increased cost to customers.

“Everything that comes out of the Far East is dollars-based, from Nike balls or water bottles to Adidas footwear, and we’re waiting with bated breath to see what happens,” Mr Greaves said.

“The Euro is an interesting one. I was with one of my suppliers and they make their replica kit in Europe, and obviously at €1.08 or €1.09 [euros to the pound] at the moment, it looks like it could be a bit of a sore one. How do you justify a jump of £5 on a kid’s replica jersey?

“To me, there is a price on a replica jersey which the consumer expects. At the moment we are eating into our margins continually to maintain that price.”

Mr Greaves noted, however, that current exchange rates could make it more economical for skiers to buy their clothing and equipment from retailers in Scotland. The pound losing ground against the euro means the cost of buying and hiring equipment is more expensive in Europe.

Equally, Mr Greaves said the weakness of the pound versus the dollar may also tempt golfers to buy equipment here instead of the US. “There is an upside and a downside,” he said. “You would hope that the currency situation will come back. We all know it will, it’s just how long it takes. But as we know from oil prices, once suppliers put prices up, it is very difficult for them to put them back down again.”

Mr Greaves, the fifth generation of the family to run the business, was commenting as the retailer reported a £242,342 loss in the year ended January 31. Greaves had made a modest profit in 2014, when business was boosted by the staging of the Commonwealth Games and Ryder Cup in Scotland.

Mr Greaves said 2015 was “always going to be a tough year” after 2014, which also featured the World Cup in Brazil. He noted the lack of such major sporting events in 2015 accounted for much of Greaves’ fall in turnover, which dropped to £6.2 million last year from £7.2m the year before.

“We are very cyclical in our industry,” Mr Greaves said. “I’ve said it many a time. You lurch between World Cups and European Championships, because football is the heartbeat of Scotland really.

“We have always been that way. In effect you want to be up 20 per cent and only drop back 10 per cent if you take it over two years. Obviously [to follow the] Commonwealth Games was going to be a tough ask.”

Mr Greaves said the firm did receive some benefit from the European Championships in France this summer, but said that margins are being squeezed on replica strips “because of the amount of money going to football clubs”.

“Now, with the euro rate, when a lot of the strips are made out in Portugal and places like that, that’s going to affect prices,” he added.

“This year is still going to be a challenging year.”

Mr Greaves signalled his hopes the business will benefit this year from a near £1m investment that Adidas has made in its Gordon Street store. The German sports giant has created a House of Adidas in store, a 2,000 square foot area dedicated to the brand featuring Stella McCartney designed clothing, fitness gear, products for children and the Adidas Originals range. The only other House of Adidas in the UK is in Harrods, London

“If you want Adidas in Glasgow, this would be the place to come to,” he said. “There’s digital mannequins and digital screens in there. It’s really a London shop-fit and it’s been very successful. It is freshened up continually with stock.”

Reebok, part of Adidas, is looking to invest £200,000 to £250,000 in a fitness and training zone in the Gordon Street store. Speedo has already committed to taking space on the ground floor, which will come on stream in November.

Greaves is poised to relaunch its website, with internet sales accounting for 10 per cent of sales and “the fastest-growing” part of the business.