Fashion
www.bizpoland.pl
Fashion’s fickled fortunes The industry produces big winners and losers – and Lodz’s Fashion Week aims to narrow the odds for aspiring designers
While Poland’s high-profile and politicallysensitive industries such as coal mining and shipbuilding get the headlines and attention of politicians, one of the biggest industries – in terms of revenues and employment – gets little formal respect and support from the government. Yet the apparel sector – more elegantly known as the “fashion” industry – continues to grow rapidly in Poland, and has been the source of great fortunes and fame.
Marek Piechocki and Jerzy Lubaniec started out just fifteen years ago in Gdansk selling T-shirts to hypermarkets, and the value of their LPP empire – with its own brands such as Reserved and Cropp Town - means
untry. LPP has launched its House brand, targeting young consumers who have a strong connection to music in their lives, and Mohito, targeting women with refined and stylish clothing – and perhaps a direct, local challenge to Zara. And at the lower-end - second-hand clothing often imported from England, Germany, or Scandinavia and sold by weight – new shops continue to spring up.
Apparel and fashion industry world-wide The global fashion apparel industry is one of the most important sectors of the economy in terms of investment, revenue, trade and employment generation all over the world. Apparel industry has short product life cycles, tremendous product variety, volatile and unpredictable demand, long and inflexible supply processes. The clothing and apparel industry produces finished clothing products made from both natural and manmade fibers like cotton, silk, wool, lenin, polyester, rayon, lycra and denim. The important segments covered in apparel industry include kids clothing, mens clothing, clothing for women, bridal wear, mens wedding wear and intimate apparel. Apparel is sold through three major channels, including “brick & mortar” traditional retail shops, catalog and through internet. Traditional retail shops still account for nearly 90% of sales. The industry supply chain revolves around five major players: raw materials suppliers, textile and apparel plants, distributors, apparel manufacturers, retail store networks and the final consumer. The apparel manufacturing industry remains labor intensive and the manufacturing base is concentrated in Asia with China the dominant producer with more than 70% of the global market. Apparel exports of developing countries increased 600% in the last 20 years, while those of developed economies rose by just 150%. Worldwide, the apparel industry is estimated to generate total revn enues of more than USD 2 trillion.
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that each of the founders’ stake is worth more than 300 million pln. Shares in LPP have soared more than 4000% since their Warsaw Stock Exchange listing back in 2000. As Polish consumer income continues to grow solidly, consumption of clothing – in every niche segment – is posting impressive gains. International retailers and Polish entrepreneurs are battling for position, targeting niche sectors and sub-sectors and emerging consumers. At the top-end, international luxury retailers such as Burberry continue to expand in Poland. New entrants include Carolina Herrera, and top-brands such as Prada, Chanel and Louis Vuitton are soon to open in Warsaw. TK Maxx – with its low-cost, branded formula – is targeting the price-sensitive, fashion-conscious consumer with its new stores in Warsaw, which will serve as a beachhead for further expansion in the co-
Yet getting the formula right is a delicate balance – as seen by the near-extinction of the Monnari brand, among others. The apparel business is intensively-competitive, notoriously fickled and constantly changing.
Paris, Milan, and … Łódż ? While the fashion industries in France and Italy are recognized as engines of economic growth and employment – and even as a competitive advantage on the world stage – the industry in Poland suffers from a low profile among policy-makers and boosters of economic growth. But in the city of Lodz, two individuals are trying to change the perception of fashion in Poland and brand Lodz as the capital of Poland’s fashion scene. Irmina Kubiak and Jacek Klak are the energy and creative force behind Fashion-
November 2010