REPUBLICS ON EXPORT MISSION
Byline: Kristi Ellis
LOS ANGELES — Welcome, comrades.
A group of retailers from the republics of the former Soviet Union took the first step toward bridging a yawning cultural gap by touring the local garment industry two weeks ago as part of a U.S. government-sponsored program to promote trade between the two countries.
The U.S. Department of Commerce hosted the four-week tour, which ended last week, for a delegation of 18 owners and store managers from Russia, Armenia, Belarus, Georgia, Kazakhstan, Tajikistan and the Ukraine.
The program was supplemented locally by the California Fashion Association, which hosted a breakfast forum at the CaliforniaMart on Feb. 22 to introduce the retail group to buying offices, showroom owners, export facilitators and city and state government representatives.
“One of the top outreach issues for the industry has been international trade,” said Ilse Metchek, executive director of the CFA.
Retailer Galina Chichikalo, who owns Style, a five-store chain in the Ukraine that carries upscale European labels including Gucci and Fendi, was on the tour.
“We were on Rodeo Drive yesterday and it was not a lot different from what we are used to in our country,” Chichikalo said, speaking though an interpreter. She noted, however, that American apparel brands are not widely known in the Ukraine.
Although all the visitors said they are excited about purchasing California brands, they must overcome several trade barriers.
An introduction to the brands is just the first hurdle. Shipments are the biggest problem for this retail delegation, according to David K. Bridges, a global trade specialist with the International Trade Administration’s Special American Business Internship program, which sponsored the group.
“Their customs officials are not easy to deal with and often any profit that they expect can be negated by customs duties,” Bridges said. “[The retailers] are often looking to buy minimum quantities to avoid custom problems.”
Retailers from former Soviet republics often turn to markets like Turkey and India, which are closer and cheaper, Bridges said.
“It is easier to get there and back and they can personally carry merchandise home.”
Prior to 1998, retailers imported from the U.S. and Western Europe but the ruble collapsed that year and trade ground to a halt.
“A lot of experts think that [the downturn] was a blessing because it is helping them to rely on their own products and companies, which might force some of their companies to reform,” he said.
As the economy rebounds in those regions, retailers are once again reaching out to the West.
The group spent the first week, Feb. 5-9, in Washington, receiving instruction from professional trainers in cross-cultural business negotiations and business plan writing. Week two was Las Vegas, attending the Off-Price Specialist Show and MAGIC. The delegation then hit Los Angeles and finished up in New York.
Bridges noted that many retailers in the program made purchases from exhibitors at WWDMAGIC and MAGIC.
“This is an experiment for them,” he said, pointing out that the retailers try different styles, see what sells and how much money they can make.
Chichikalo was reluctant to make purchases while on the trip because she couldn’t afford the minimums required by manufacturers.
“I understand buying a couple dozen jeans. But it is unrealistic to do that with evening gowns,” she said. “When I purchase a collection, I only buy one or two dresses because women won’t wear them if a lot of other people are wearing the same thing.”
She was interested in eveningwear and higher-end products because she said she can purchase casual products at lower price points in Turkey.
Marzhan Marshall, who owns two stores in Kazakhstan, said she took the risk and purchased casual clothes at WWDMAGIC.
“Women dress European-style in business suits and I’m trying to bring them more cotton, linens and silk,” she said. “The styles are casual here [in California]. When our women go to work, they dress like they are going to parties.”
American apparel companies are just as naive about the former Soviet Union as retailers from the republics are about U.S. brands, according to Peter Jacobson, an owner of the multiline showroom, Creative Concepts, who addressed the group at the CalMart.
“It is a great unknown, especially since we don’t even know what Russia is these days,” he said. Jacobson carries one line, Rizal, which exports suede and leather items to the ex-Soviet nations.
“They have found a huge market there,” he said. “With their climate, the shearlings and lambs are ideal, and a big upscale market exists there.”
With that in mind, some of the morning’s speakers hinted at the huge untapped middle-class market in the republics.
“The greatest thing about the market there today is the fact there is a middle class developing,” said Dima Liberman, vice president of Komarov Inc., a contemporary sportswear company based here. “It is the perfect time to get into that market to teach the customers new things and ideas, and that is why everyone is here today.”
He noted that upscale European labels such as Fendi and Gucci generate business among the upper class. “The balance of the market wants goods that are durable and goods that they can keep for a long time.”
Liberman, who was born and raised in the former Soviet Union, said he expects trade with the U.S. to improve in the next few years.
“They want to have that American feel like Budweiser and Marlboro, which is very much alive in Russia today,” he said. “They are trying to bring that feeling through clothes now, whereas before, it was through different products, like cigarettes and beer.”