ISTANBUL — Amid political turmoil and economic uncertainties surrounding the country, one of Turkey’s leading leather manufacturers, Desa, is looking further beyond its borders, especially the U.S.
“Let’s face it — Turkey has a lot of downsides but also upsides as there is a huge potential in terms of manufacturing and creative capabilities,” said Burak Celet, the second generation chairman of Desa, the flagship brand of a family business with more than 100 stores at home. “We have to make the switch from manufacturing just basics to more added value product. That’s the future. We cannot be China forever.”
Desa’s tactic suggests that looking beyond Russia for exports and developing international brands is the way to face challenges and stay partially immune to political turmoil in Turkey.
Dozens of leather shops were shut down in Istanbul’s Zeytinburnu district, the hub of Turkey’s leather industry, and thousands lost their jobs after tourism and trade declined dramatically following a coup attempt in July, terror attacks across the country and an ongoing war against the Islamic State across southern borders.
Since the Nineties, Turkish leather exporters have heavily relied on the Russian trade, which also went sour after a diplomatic crisis between the two countries over a downed jet halted bilateral tourism and commerce for almost a year.
“Almost 90 percent of leather manufacturers based in Zeytinburnu, the heart of the Turkish leather exports, went bankrupt after the last crisis,” said Nurettin Aydin, the head of the Leather Craftsmen and Tradesmen Committee of the Istanbul Chamber of Commerce.
In the first nine months of 2016, Turkey’s leather exports declined 5.6 percent to $1.1 billion, according to Turkey’s Exports Assembly, TIM.
Diversifying trading partners and putting more weight on innovation is the way to break through, Mehmet Buyukeksi, the chairman of TIM, said last month as he introduced 2017 All-Leather IDF Istanbul Leather Fair, scheduled to take place next February.
Desa’s in-house luxury brand, Desa Nineteenseventytwo, is making such inroads, having established itself with 150 corners in high-end boutiques like Jelmoli and Shuga in Switzerland, Engelhorn in Germany, Harvey Nichols in Hong Kong and Takashimaya in Japan.
It was Italy’s Excelsior, Gio Moretti, and Biffi that gave the brand the greatest exposure for buyers from around the world, Celet said.
“Milan and Paris are the world’s fashion capitals and set a true challenge for a new brand like us,” he said. There, Desa targeted retailers that don’t “want to be defined by the brand they are carrying but the style that they are embracing for themselves.”
Desa manufacturers leather goods for an undisclosed slate of luxury brands. Celet acknowledged it is challenging, but not impossible to break through with a Turkish brand.
“You might be a big fish in Turkey, but when you go out there, you are a small one, let’s face it,” he said. “Especially in the affordable luxury segment of leather goods, we are facing giants with multi-billion dollar companies, and it is hard to compete but, mind you, sometimes small fish can be the faster one.”
Having a fully vertical structure, including a tannery that processes around 5,000 skins a day, Desa has had a good head start while European luxury brands like Prada and Chanel just recently purchased facilities to better control their supply chains.
The image of Turkey remains something of a barrier.
Shortly after the coup attempt, Turkish textile and leather exporters, including Desa, joined an orchestrated effort to send the message that Turkey was a safe country to visit and it was business as usual despite critical political developments.
Present during Milan and Paris fashion weeks, Desa Nineteenseventytwo recently added footwear and apparel to its core handbag collection.
All are created under the supervision of Yossi Cohen, creative director, who collaborates with 13 designers with diverse backgrounds, focusing on architectural shapes in a wide range of colors and in top quality leather.
While Turkish Leather Exporters aim to reach volumes of $2.3 billion in 2023, in celebration of the 100th anniversary of the foundation of the Turkish Republic, Celet is eyeing America and Far Eastern markets to contribute a bigger share of revenues.
“The U.S. is highly competitive and difficult but is the one that will make the brand in the end,” he said. “It’s a big world out there and we have a lot to do.”