Turkish fashion makers face a variety of challenges.
ISTANBUL — The Turkish fashion industry is under extreme pressure generated by forces foreign and domestic.
Cheaper products from China and India and infighting among rival factions in the domestic fashion industry have produced rough sailing in the first half of 2006.
“The whole scene is like a bitter battleground,” said Cengiz Say, head of the IF Council of apparel industry associations. “We will be organizing two fairs a year from now on. If we can attract 50,000 visitors to each of these — a total of 100,000 — the Turkish ready-to-wear sector will be in good shape.”
But if the second half of 2006 is like the first, Say will not be a happy man. And he will not be alone. For starters, the February installment of Istanbul’s IF fashion fair at the TUYAP exhibition halls in Beylikduzu drew 20,000 visitors, not 50,000. And, far from cooperating, the fashion industry is at loggerheads after splitting in two, with rival fairs scheduled almost back-to-back.
The upstart rival Istanbul Moda Show, which boasts the backing of former IF supporter ITKIB (Istanbul Textile and Apparel Exporters’ Association), believes it has already garnered the upper hand, after a high-profile opening in February. Just one week after the poor showing at IF Istanbul, Istanbul Moda attracted 62,000 visitors.
The summer editions of the shows, at least, will not be within days of each other, as they were in February — Istanbul Moda Show will take place Aug. 3-5; IF will follow three weeks later, Aug. 24-26 — which may provide some breathing room in the battle for supremacy.
But whichever show finally wins the affection of Turkey’s top brands, the spat highlights the urgency felt in the industry to act fast to prevent the implosion of a sector that was, until recently, the country’s top exporter and still is a major employer. The latest figures show that ready-to-wear exports fell to just over $1 million for April, down nearly 10 percent from the previous year. First-quarter rtw exports were $13.4 million, down 1 percent on the previous year. Textiles are faring slightly better: Exports were unchanged compared with April last year, and they were up by 4 four percent to $4.9 billion over the past 12 months.
With the threat from cheaper producers such as China putting the pressure on — an extension of trade barriers the Turkish industry pushed for will end in 2008 — Turkish producers are desperately campaigning for the easing of domestic burdens, such as high employment taxes and a strong Turkish lira.
“Things are reaching crisis point in the sector. That’s pretty clear,” said Aynur Bektas, head of the Association of Turkish Apparel Industrialists, or TGSD.
The Turkish government seems unwilling to help. “When we spoke to the Prime Minister a year ago, he told us to go to regions where incentives were already being offered. What should we do with our existing staff when we go there, throw them out in the street?” complained underwear industrialists’ group (TIGSAD) chief Bahri Ozdinc. “The government is not interested in us….We saw 21 million items of underwear imported from China in 2005. Everyone has slowly begun to downsize.”
Figures are difficult to compile because of the diffuse nature of the industry, but at least 100,000 people are said to have lost their jobs last year, and factories are closing or moving abroad to cheaper areas. Moves to improve quality, add creative talent and develop brands are not going to be enough to save a large portion of the industry, which is already losing ground to the ascendent automotive sector.
A high-level summit of fashion and textile executives led to a delegation being sent to Prime Minister Tayyip Erdogan, who reduced the value-added tax on textiles, clothing and some leather goods, breaching a pledge to the IMF. His move was derided by industry executives as feeble compared with their demands. Erdogan called industry leaders “incompetents,” and now there is little expectation of further government help.
Money is so short for some small firms, which make up the bulk of the clothing sector, that they cannot buy the materials to fulfill orders even when they come. In this atmosphere, what hope is there for trade fairs?
Put this to the often bullish Suleyman Orakcioglu, head of the Orka Group, leader of Istanbul’s rtw exporters and a prominent figure in ITKIB, and he recoils.
“So what do we do then, give up?” he said. “I have no doubt that the sector will survive…We have to keep fighting….With Istanbul Moda Show, we are showing everybody just how well we can do things in Turkey. We are building a base.”
Show organizers also remain upbeat. “We rebooked two-and-a-half halls before the last Istanbul Moda Show was even finished, and we are on course to increase our size to more than 80,000 square meters [861,112 square feet] from 50,000 [538,195 square feet],” said Gul Orundas, head of the International Visitors’ Department at CNR, organizer of Istanbul Moda. But she did add that, among potential new exhibitors, the small firms were so hurt by China and domestic conditions that they were reluctant to commit to any fair, even if they thought that participation would boost orders.
“As long as China continues to be an unfair competitor, this will continue to be the case here,” she said.
The theme of all fashion and textile events in Turkey today, including fairs, seems to be the disarray and challenge faced by an industry trapped by two opposites: China and India are cheaper, while Italy does brands and quality better. As Turkey cannot compete with the former, the task must be to catch up with the latter — but win on price.
“In cheap goods, Turkey has lost all hope. There is no life in standard products any more. What we need are added-value products,” said Ismail Gulle, head of the Istanbul Textile and Raw Materials Association (ITHIB). According to Gulle, it is now possible for Turkey to make cloth for the likes of Dolce & Gabbana, through high-end companies such as Soktas, which can be seen at the New York and London Turkish textile fairs, July 11-12 and Oct. 3-4, respectively. In Istanbul, there is Texgate, Sept. 28-30 at CNR, organized by ITF. But creating a rtw brand of the caliber of Dolce & Gabbana takes a lot more doing, as well as a lot of good fortune, he added.
At the Istanbul fairs, the apparel sector’s goal is to impress a new audience. Orakcioglu said Turkish clothing brands have to get European and American buyers’ attention fast, and he criticized what he calls TUYAP’s more regional outlook. However, the visitor profile for the two fairs does not yet point to a marked difference in attendees, and executives from both said that with the technology and know-how currently unavailable to all but the top Turkish brands, making a big impact outside the immediate region is a bit ambitious for now.
Pushed by circumstances, Turkey’s rtw and textile industries are moving along on the route to better quality and branding — something that is apparent with each new installment of trade shows — but it still has a long way to go. The trouble is, it may not have a long time in which to do it.