October 1, 2012 4:11 pm

Turkey fights for a new prestige

Upmarket push to revive Istanbul’s fashion industry

Fifteen hundred years ago the Byzantine Empire stole the secret of making silk from China. The capture of the mulberry silkworm may have seemed a frivolous breakthrough for some – the great historian Edward Gibbon lamented that instead, the Byzantines should have learnt from the Chinese how to operate a printing press.

But the consequences of the theft have cascaded through history. A millennium and a half later, textiles and clothing remain one of the principal exports of the land that is now Turkey, a country that still hungers after the high end of the market. And developments in China overshadow the Turkish industry even more than in late antiquity.

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The story of Turkey today is of a country seeking new customers and new prestige for its products, even as it tries to defend lower end goods from cheaper Asian imports.

Now, Turkey is in what some industrialists characterise as a three to four year dash to protect and rebuild its industry in the face of cheap imports from China, and to a lesser extent India and Bangladesh. Hefty tariff increases last year on textiles and clothing bought time for some beleaguered manufacturers while dismaying other companies that look abroad for materials.

The short term impact of the tariffs, which could yet be thrown out by the World Trade Organisation, is clear. For the first six months of this year, Turkey’s apparel imports from China were down more than a third on the same period of 2011 at $311m. Imports from Bangladesh fell by a quarter and from India by almost half.

Factories have opened to take up the slack. But what remains to be determined is whether the country will succeed in carving out for itself a more prestigious slice of the market, find customers in new parts of the world and add Turkish companies to the top rank of global brands.

The push to move upmarket is clear: the second week of October sees the seventh Istanbul Fashion Week, a twice yearly attempt to get Turkey into the limelight and to increase exports, particularly to the many countries a short flight away.

Mavi, the jeans manufacturer and retailer, and one of the best known names in Turkish fashion, has a similar aim. It has a new collection by Hussein Chalayan and has ended a distribution arrangement with Macy’s in order to “move up the price ladder”, says Cuneyt Yavuz, Mavi’s general manager.

“Hussein Chalayan is an effort to make a splash in the US market,” says Mr Yavuz. “We’ve exited Macy’s and we want to get in on the Bloomingdale’s level.”

When it comes to international brands looking for suppliers, the country’s principal advantage is also close to home.

Already Ermenegildo Zegna has gone to the Tuzla district of Istanbul to make shirts; and Hugo Boss has set up a manufacturing operation in the city of Izmir, which in less than 15 years has become Hugo Boss’s most important manufacturing centre, with 3,500 workers turning out suits, shirts and other core products. “Geographically it is good for us because it’s not far to our logistics centre in Germany, but what really matters is the high quality we get from Turkey,” said a spokesperson for the company.

Exports are holding up. Despite the economic difficulties in Europe, Turkey’s total apparel exports for the first six months of the year reached $7.7bn, only about $150m less than the same period in 2011.

Sales to Germany, by far the biggest importer of Turkish clothes, France and Italy all contracted, but there were modest increases for the second and third biggest markets, the UK and Spain, and surges in sales to Russia and Iraq.

Cem Negrin, chairman of the Turkish Clothing Manufacturers Association argues that the psychology of uncertain economic times helps Turkey because many European customers prefer not to buy a large amount of stock but to to place smaller orders, to be repeated when they are sold out. It is not a formula that meshes well with longer delivery times from China or elsewhere in Asia.

But he is philosophical about how high up the market Turkey can ascend. “Turkish branding has increased in the last ten years and will increase in the next four or five,” he says. “But I think a lot will be mid-prestige brands – it’s not so easy to create an Armani or a Versace.”

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