Turkish retailers promise large-scale expansion in international arena

ALEN LEPAN
CANNES, FRANCE
Published 18.11.2019 19:32
Executives of leading Turkish retail brands meet with journalists on the sidelines of MAPIC, Cannes, France, Nov. 14, 2019.
Executives of leading Turkish retail brands meet with journalists on the sidelines of MAPIC, Cannes, France, Nov. 14, 2019.

Leading players in the Turkish retail industry pledge to expedite their efforts for even greater expansion abroad in the period ahead, while also making bold moves to keep up with the wave of changes in the sector

MAPIC, an annual international retail real estate event held in Cannes in November, showcases the ever-changing face of the retail industry and is seen as an opportunity to show how physical and digital are converging and how the industry is expanding.

Turkish retailers, who, besides revving up their efforts to keep pace with technology, have been using MAPIC as a platform to establish new partnerships in overseas markets, boost their presence and increase recognition of Turkish brands in the international arena.

The event brings together leading retail brands from across the world, real estate market, including shopping mall investors, who are movers and shakers of global investment in the retail sector, master franchisees, architects, designers, cities and countries.

The 25th edition of MAPIC was held on Nov. 13-15 in Cannes, the resort town on the French Riviera and famed for hosting a number of major international organizations, particularly the annual Cannes Film Festival. It was attended by over 8,500 participants. Some 80 Turkish firms with a delegation of 250 people joined the event.


The booth for Turkish brands on the sidelines of MAPIC, Cannes, France, Nov. 14, 2019

Nine Turkish brands gathered under a single roof under the synergy of the joint cooperation of the Istanbul Apparel Exporters Association (İHKİB) and the United Brands Association (BMD).

Executives of a number of leading Turkish brands, including Kiğılı, Orka Holding, İpekyol, Avva, B&G Store and Hemington as well as many other industry representatives spoke to Daily Sabah on the sidelines of the event. They elaborated on their plans, expectations, current operations as well as their presence in the international arena.

During the three-day fair, executives of Turkish retail brands held 632 B2B meetings with international representatives, exceeding all expectations, said Yonca Aközer, general manager of Alkaş, the company coordinating Turkey's participation in the fair.

In addition to brands such as Avva, B&G Store, D'S Damat, İpekyol, Kiğılı, Hemington, Penti, Perspective and Yargıcı, which were gathered under the roof of Turkish Brands booth, a number of other Turkish companies, including Polin, Dof Robotics, Turkmall and V-Count also carried out bilateral meetings on the sidelines of the event.


A number of major Turkish brands showcased their products at MAPIC, Cannes, France, Nov. 14, 2019

"The interest shown in our brands is valuable as it shows that the perception they create in the countries where they open stores is strong, as well as putting forth how effective the steps taken in line with years-long branding are," she added.

20,000 STORES ABROAD BY 2023

During interviews with Daily Sabah, executives said they were pleased with the current situation abroad, and pledged even greater expansion in the period ahead. In addition to already proven quality production and products, according to executives, Turkish brands have everything they need to obtain even greater recognition in the international arena.

BMD's 106 brands currently have stores in around 125 countries, the association's chairman, Sinan Öncel, told Daily Sabah. "BMD member brands have nearly doubled the number of their stores abroad in nearly three years, reaching almost 4,396," he said, adding that this figure goes up to around 17,280 when 12,884 other sales points are included.

"We aim for BMD member companies to reach 20,000 stores abroad by 2023," he added.

A global player in the clothing industry, Turkey is the fifth-largest supplier of the world and the third-largest supplier of the European Union, according to İHKİB board member Nejdet Ayaydın, who is also a member of the board of one of the most prestigious women's ready-to-wear brands İpekyol.

"In 2018, we carried out exports worth $17.6 billion to 224 countries and autonomous regions. Some 75% of our country's total ready-to-wear exports were performed by over 10,000 members of İHKİB," Ayaydın noted.

According to İHKİB data, ready-to-wear exports by member companies in the first 10 months of this year reached $10.3 billion, while the country's total ready-to-wear exports amounted to $14.8 billion.

In his address at a dinner his association traditionally organizes every year on the sidelines of the event, Shopping Malls and Investors Association (AYD) Chairman Hüseyin Altaş noted the importance of the world's largest international retail and real estate exhibition, which offers important opportunity for Turkey's projects with high-standards to meet global retailers and shopping mall investors.

KİĞILI'S MASSIVE OPENING IN GERMANY

The year 2020 will be a year of major opening into the German market for Kiğılı, a major Turkish brand specialized in menswear, the company's CEO Hilal Suerdem told Daily Sabah.

"We are developing a different project for Germany. Rather than the retail store concept, we are in a different structuring; a system that will rapidly introduce our brand and that will make us pretty accessible. The logic behind is to be close to customers as much as possible. We want to announce it when everything is set," Suerdem explained.

The firm has already finalized an investment in the country and has rented a large site that, as a concept, will include a store, storehouse, showroom and office, he stated. "We looked for a strategy that will enable us to reach many regions in the country and we have found such a strategy," he stressed.

"Briefly, we will be in 32 cities in a period of one year. It is a really big project," Morris Erginbaş, International Sales and Marketing Director at Kiğılı, underscored, adding that first store will be opened in Düsseldorf.

FOOTBALL TEAMS SEEK SPONSORSHIP

"Many football clubs in Germany approached us the moment they heard we are opening to Germany. They asked us to make sponsorship agreements with them," said Erginbaş.

"We have agreed with Schalke 04 for the 2020 season," Suerdem added. "We have agreed with Dusseldorf for this season."

Erginbaş continued by saying, "You will see Kiğılı everywhere after two weeks, starting with a match with Bayern Munich." He added that many teams from other sports branches also showed interest.

The Turkish brand currently operates in 32 countries, according to the executives, who said the brand is continuously adding new stores and has just recently opened a store in Romania, Palestine and Azerbaijan.

In addition to Germany and its other operations abroad, the firm also looks to expand into neighboring countries, including those in the Balkans, Erginbaş emphasized. "We have decided to make our own investments in the Balkans. We will open two stores in two shopping malls, BBI and Alta, in Bosnia-Herzegovina in 2020," he said, adding that they also have plans to open a store in the country's southern city of Mostar, a hot spot for tourists. The company has already given a franchise to a firm in the country.

"We opened companies in North Macedonia and Serbia," he continued, explaining that they also have a dealership in Kosovo, one store in the capital Prishtina and will soon open another one in Prizren. "We have reached 11 stores in the Balkans," he stressed.

ORKA HOLDING: ONE OF THE FASTEST-GROWING BRANDS

The globally renowned Turkish company Orka Holding, which embodies established menswear brands such as Damat, Tween and D'S Damat, has opened 60 stores abroad in the last one-and-a-half year, Osman Arar, board member and general coordinator of Orka Holding, told Daily Sabah, adding that seven or eight more will be opened by year-end.

"Nearly 70 stores will have been opened in only a year-and-a-half. This, I guess, makes us, Damat, Tween or D'S Damat, one of the fastest-growing brands in the world" he added.

Pointing to the importance of MAPIC, and more importantly establishing networks during such events, Arar said Turkish brands have proven themselves in the international arena and have gained prestige. "Turkey is one of the top 15 countries in the retail, fashion retail in the world," he stated.

Arar stressed the high level of the know-how that was built up over years and embraced by Turkish companies, adding that this has all resulted in worldwide known production and quality products.

He also noted the company's extensive sponsorship deals with sports clubs. The company is a sponsor for Deportivo Alaves, which is competing in the Spanish top tier La Liga, and a number of national football teams including North Macedonia, Azerbaijan and South Africa, in addition to the Turkish national team as well as many clubs in the top tier Süper Lig.

The company currently operates in 80 countries around the world and has reached 200 stores, of which 63 are in its control, while the rest are operating through franchises. It also has 200 stores across Turkey.

Arar emphasized that the brand aims to open more stores abroad compared to Turkey in the period ahead. It is preparing to open at least 40 stores abroad in 2020, he added, of which up to 15 will be their direct investment.

The company currently has three stores in Spain, Arar continued. "Opening five more stores is in our plans for the next year.

The company has been present around the world for 25 to 30 years, Arar said and went on to say that they exist in a serious geography in Europe and Russia, in almost the whole Central Asia, and have a strong presence in the Middle East and North Africa (MENA) region.

"We have completed this region, now we are expanding and growing parallel. As target markets, we have set five countries in Europe, namely Italy, Spain, Germany, Romania and Russia," he noted.

AVVA TARGETS 100 STORES ABROAD BY END OF 2021

Another major player in the textile industry Avva attended MAPIC for the third time.

Speaking of the importance of organizations such as MAPIC, Avva Chairman Volkan Atik said the company held productive meetings with many master franchisers and has so far signed three franchise agreements thanks to the fair.

"We have nearly 50 stores in 19 countries. Our target is to increase this figure to 100 by the end of 2021 by opening some two stores a month, 25 stores a year. We have managed to do this to date and hope to continue in the same way in the period ahead," he said.

He emphasized that Turkic countries are among their main targets, adding that among their biggest markets, they have 12 stores in Uzbekistan. In addition, eastern European countries are among the company's main targets.

As for Turkey, the brand currently has 85 stores in the country, a figure it targets to increase to 100.

RUSSIA, IRAN TOP TARGET MARKETS FOR İPEKYOL

One of the most prestigious women's ready-to-wear brands İpekyol has been attending the major event for 10 years, the board member of the company, Nejdet Ayaydın, said.

He emphasized that his company has so far achieved good results from attending MAPIC.

"Three years ago, we agreed with a group from Saudi Arabia. Currently, we have 12 stores in Saudi Arabia," Ayaydın stressed.

He noted the benefits the organization provides them, adding that it brings all of the players in the sector under one platform, which makes their job easier and enables them to evaluate right projects and establish right partnerships.

Speaking of their targets, Ayaydın said they seek to open to Russia and Iran, where he said current laws make their task difficult. "We are interested in Russia. We hope to start opening stores in Russia in 2020," he noted.

The brand currently has 250 stores across Turkey and 47 stores abroad, including Saudi Arabia, Kuwait, Azerbaijan and Iraq. "In 2020, we aim to reach 60-65 stores abroad," he added. Besides Russia and Iran, Ayaydın underscored that the U.K., the U.S. and Germany are also among their top targets.

Touching on the company's e-commerce studies, he said they are in negotiations with the two e-commerce giants Alibaba and Amazon. It is currently working with Turkish e-commerce platform Trendyol, in which Alibaba became a major shareholder in 2018.

BALKAN COUNTRIES ON B&G'S RADAR

As a result of last year's MAPIC, one of the top Turkish players in the children's clothing sector, B&G Store, is about to open a store in Dubai in the coming days, while it is also close to opening a store in London, the company's founder, Seyidullah Nebati, told Daily Sabah.

The store in Dubai will be a franchise, while the one in London they look to be their own. Nebati said they have currently set countries in close regions as their main targets, especially the Balkans.

"We currently have 100 stores in Turkey and 18 abroad, which will reach 20 once we open in Dubai and London," he added. It operates in Russia, Morocco, Georgia, Italy, Iraq, Azerbaijan, Greece and Iran, he noted.

He stressed that the company is making serious investments in e-commerce and looks to expand operations.

HEMINGTON AIMS FOR 30 STORES ABROAD IN NEXT 3 YEARS

The CEO of another player in menswear industry Hemington stressed the rapid increase in the number of stores Turkish brands open abroad every year.

"Almost 500 to 1,000 stores are added each year. This is a great speed. It means up to 20 stores a week. Turkey has proven its adequacy," Umut Boz said.

The four-year-old company currently does not have its own store abroad, however, it has made an agreement for a franchise in Russia, which will open in 2020. "Thanks to MAPIC, we are now at the table to give franchises in Qatar, North Africa and Germany," Boz noted.

"Besides Russia, our target markets are northern Europe and continental Europe, with high purchasing power. Plus, some certain countries in Gulf region which show demand for luxury goods, some certain countries in northern Africa, China and the U.S.," he explained. He added that the company looks to reach 30 stores in these markets in the next three years.

On the other hand, the brand currently has 11 stores in Turkey. "We aim to increase this figure to 20 by the end of 2020," Boz stated.

This masstige brand, besides for menswear, plans to also commence production of women and children's clothing in the upcoming period. Touching on the importance of e-commerce, he shared that the company makes 30% of its sales from e-commerce, he noted, stressing the target to reach 50% in the coming period.

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