Volume 4 :  Nov 23,  2007



Newsletter Summary


Werner International now registered with the IMC


The Werner International PARTNER SEARCH SERVICE


Shopping Centers in Turkey


Strategic Overview on Global Textile & Apparel Supply Chains Dynamics










































Werner International now registered with the IMC

Werner International is pleased to announce to all of our Egyptian clients that we are now registered with the IMC (Industries Modernization Center) as a training provider.

Being approved by the IMC represents significant benefits to the local companies.

The excellent capabilities of Werner International in the development of the labour force and management sectors are well known worldwide. The company offers training programs for the various industrial sectors as well as supervision and management development courses.

The training programs are highly customizable and cover the entire technical spectrum from spinning to garment making, quality management, styling, and design, merchandising and marketing.

Companies interested in receiving more information about these exciting new development tools should contact Saskia Dornez in our Brussels office at info@wernertex.com.

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The Werner International PARTNER SEARCH SERVICE

As the world continues to change at a rapid pace, the textile and fashion industries are changing even more rapidly. While new economies emerge, new ways of consumption are taking place, new production patterns are being designed and new supply chains are then required. “Speed” is becoming a key word, where “quick service”, “fast fashion”, “fast retailers” are the winning concepts.

As more and more retailers and fashion brands are leading the market, the supply chains are getting more complicated every day. It is not unusual to see a finished garment whose yarn is spun in India or China; the fabric is woven in Turkey or Egypt; finished in Italy; and then made-up in Romania. Such a complicated production and supply pattern requires a network of partners, rather than simple suppliers. The key players – the retailers and the fashion brands – become mere “orchestrators” of a complex network, where each link is at time a supplier or a customer.

Furthermore, strategic alliances become the key to allow for small-medium sized enterprises to rapidly grow - or sometimes to just survive. Being part of a complex system may be the only way to get out of “isolation” and take advantage of all the opportunities offered by global markets. Industrial or commercial (equity or non-equity) joint-ventures, mergers and/or acquisitions can offer a number of advantages in terms of increased competitiveness, efficiency, market share acquisition; all in a relatively short time frame.

A correct quality/price ratio and the best service (in terms of quick deliveries or “customization”) are the key success factors in today’s textile and apparel industry. This can only be offered if the whole supply chain is made up of a number of reliable partners: the key phrase nowadays is “look for the right partner”, rather then “look for the cheapest supplier.” It is important to find the right partner who will be able to serve the best quality at the right price in the shortest time.

This is exactly why Werner, through its network of offices, representatives, “antennas” and industry contacts located at every level, has been able to successfully establish its PARTNER SEARCH SERVICE.

Starting a few years back, the number of requests for a partner search have been increasing on a daily basis. Textile and apparel companies benefit from Werner’s support when they need to find a buyer or investor, look for a company or brand to purchase, or locate an industrial partner to associate with in a joint-venture company. The number of companies we have contacts with, and the number of countries in which we operate in, are so wide that we can virtually “match” partners from every corner of the world.

The search is based on a first preliminary assessment. At this point we analyse the exact requirements, capabilities, competences and strengths of the applicant; then we profile the ideal future partner on the basis of our thorough understanding of these markets. Next, the actual search will be conducted through local contacts and direct interviews with the potential targets, along with the advice of industry leaders. The objective of the service is not only to introduce parties, but also to assist in understanding the level of a strategic match and assist our client in the negotiation process. A deem of absolute confidentiality is taken all throughout the process - guaranteeing that no sensitive information whatsoever will be disclosed. The actual search is conducted in the most confidential way, bearing in mind how the news could cause harmful rumours to spread throughout the entire industry segment.

If your company is looking to become a key player in a successful new global supply chain and is looking to explore new strategic partnership opportunities, please e-mail Werner at info@wernertex.com. We will respond back to you immediately to organize an initial appointment and assessment of the project.

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Shopping Centers in Turkey

After the year 1980, while under the leadership of Prime Minister, Turgut Ozal, Turkey went through a phase of neo-liberal politics and liberalization of foreign direct investment. During this period, the level of imports increased and privatization projects were initiated. With such an outlook, in 1988 Turgut Ozal initiated the construction of the first shopping mall, located in Istanbul, named the Galleria Shopping Center. Since this was the first shopping mall, the scope of it was not only limited to just close proximity to Bakirkoy and Atakoy, but rather throughout all Istanbul. There were even people visiting Galleria from many other Turkish cities.

In the 1980s Turkey had the sum total of only 3 malls. After the opening of Galleria, others began to open in Ankara, Izmir, Adana, Bursa and other cities. In the 1990s this number increased to 35, with the opening of several new malls. To name a few: Akmerkez (1993), Capitol (1993), Carousel (1995), CarrefourSa, (1996), Grandhouse (1997), Migros (1998), Profilo (1998), Mayadrom (1998) in Istanbul, and Atakule (1989), Karum (1991), Galleria (1995), Bilkent (Real and Praktiker) (1997) in Ankara.

There is at least one shopping center in 32 of the city centers in Turkey. Istanbul has the most locations with a total of 53, followed by 16 in Ankara and 12 in Izmir. According to the data presented in the ‘Retail Catalogue’ by Social Communication and Consultancy, the greatest boom was after the millennium. In just the past 7 years, the number of shopping centers has increased to 149. In 2006 alone, 27 new shopping centers opened. In the first 3 quarters of 2007, 13 new centers opened, and 83 more centers are projected to be finished by the end of 2007.

Gunduz Bayer, the General Manager of Metro Group Asset Management, has stated that for every 1000 persons there is 32 sqm of shopping mall space in Turkey; this figure is still very low when compared to Europe or the US. He added that more than 100 of the shopping centers (including hypermarkets) in Turkey (more than 200 in total) are in Istanbul, and therefore more are needed in Anatolia. He expects that the number of shopping centers will increase to 500 in total within the next five years, and the weight will be shifted towards Anatolia.

It is expected that within the next 10 years, the new tendency in bigger cities will be to introduce outlet malls, specialized malls and entertainment centers. For example, the Multi Turk mall company is planning to construct the country's largest mall, Forum Istanbul, a 150,000 sqm complex with shops, leisure facilities, offices, residential property and a hotel. Ankara, Izmir, Antalya and Bursa are also attracting real estate investors. Multi Turk mall is planning to build "Forum Etik" in the capital of Ankara, while in Izmir; the same developers are working on the 66,000 sqm Forum Bornova.

With these developments, there are environmental and social risks to be taken into consideration. Planning and infrastructure are very important. In Istanbul, Istinye Park is the most recent shopping mall opened, combining many well-known global brands such as Armani, Gucci, Louis Vuitton, Dolce & Gabbana, Coach, Chloé, Paul Smith, etc. It also includes well-known Turkish brands - all under the same roof.

Certain questions always arise with the rapid development of shopping centers in Turkey. An example, in Istanbul:

  • Is the infrastructure sufficient, in terms of roads, transportation, electricity, water, etc?

  • Will enough traffic be generated in the different shopping centers around the city?

  • Will the purchasing power of the population be sufficient for these retail stores to survive?

There are different opinions regarding the answers of these questions. Istanbul is a big city, with a population of about 15 million people, with an intense traffic jam throughout the day. Therefore, the vicinity of the shopping center becomes the number one criteria to select a location to shop. The young population especially prefers one-stop shopping centers where they can shop, eat, go to the movies, do grocery shopping, use the dry cleaning service, etc.

However, as this industry is developing, the Turkish brands are opening stores in all of the locations, regardless of their positioning. Therefore, in the future they will have to be more selective in choosing new locations. The basic reason cannot continue to be ‘because their competitors are there’.

Another question mark is the opening of global luxury brands in Turkey. The small portion of the population, who can actually afford to buy these brands, would mostly prefer to shop during their travels around Europe. Thus, resulting in less spent in Turkey, because the prices are at least 20% higher than the original prices, which is due to the high import taxes. For this reason, another factor to be taken into consideration is that the tourists coming to Turkey will also not be buying at the shopping centers.

In conclusion, this boom in the development of shopping centers will have great effects on the economy, the purchasing behavior of the buyers, the lifestyles of the consumers, and the establishment of brands in Turkey.

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Strategic Overview on Global Textile & Apparel Supply Chains Dynamics


  • Werner is a management consulting practice globally active since 1939, focused exclusively on assisting the textile, apparel and fashion industry in improving its performance and optimising its activities.

  • Werner is unique, combining specialised expertise in all technical areas of the supply chain with global marketing know-how and exceptional networking.

  • Werner operates throughout the world with an
    international team of highly specialized senior
    and regional or national representatives coordinated through three operational offices in Brussels, Washington and Beijing.



  • Benchmarking for all manufacturing activities

  • Productivity improvements & control

  • Product Development management

  • Total Quality management

  • Manufacturing standards and control

  • Preventive maintenance

  • Standard cost system design

  • Supervisor & operator training program

  • Management training and development

  • Sourcing strategy and suppliers accreditation

  • Management Information Systems

  • New plant start-up


  • Market intelligence and strategic market analysis

  • Audit e benchmarking for the marketing, branding and retailing areas

  • Top Management training

  • Partners search

  • Acquisitions e Joint Ventures

  • Strategic Business Planning

  • Development of Global sourcing strategies

  • Marketing Strategies

  • Merchandising management

  • Retail management

  • Brand development


  • Over 65 years of consulting in textile/apparel/fashion industry

  • Over 5,000 assignments carried out

  • Presence in more than 65 countries

Perspective 1:

A global industry mature for growth outside traditional western markets

  • Since 2005, the world textile and apparel industry has accelerated in its complex transformation

  • A new world of competitors (but also consumers) has entered the global market with their impressive capabilities and will to growth

  • By 2010 China is expected to represent 40/45% of global trade, India 17/20%

  • Despite its impressive growth trend, China's rising costs and perceived risks are creating relevant opportunities for other low cost countries

  • India is rapidly expanding its role with a heavy weave of new capacity build-up invertical integration

  • Pakistan, Vietnam, Cambodia and Bangladesh are leveraging on their low manufacturing costs and building up more textile capacity

  • Egypt is currently looking at textiles with new emphasis

  • Turkey is becoming a critical regional player, closely connected to Italy, repositioning and creating a number of new regional brand players(Turquality)

  • Eastern European countries, due to their growing costs are rapidly refocusing and repositioning on higher market segments

  • South and Central America maintain a relevant focus on textile

  • Italy still defends its role in the luxury segments

Imports Penetration inWestern Markets

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Mature USA Apparel Market

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Mature EU Apparel Market

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  • While T&A consumption in Western markets grows moderately, imports have almost reached 85-90% of total consumption

  • We must now face the impact of the capacity bubble built in anticipation of market opening and quota removal and creating a deflationary environment

  • However, the time gap between the positive and negative effects of liberalization is too often driving us to forget about the real mission of trade liberalization

Per Capita Consumption

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The future global market for textile and apparel is expected to witness a relevant expansion thanks to:

  • Consumption growth in new markets

  • Global expansion of Modern retail space

  • Eastern Europe and ex Russian block

  • Turkey and Middle East

  • South East Asia

  • India

  • China

  • South America

Retail Expansion Across Europe

New retail surface 2006-2008 -INDEX

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Recap Global Industry

  • Commodities Bubble

  • Hegemonic role of India & Chinawith their integrated supply chains

  • Need for differentiation to sustain premium producers (Italy . turkey)

  • Continuous fight for commodity markets and cost leadership

  • Boom of air/sea shipments

Perspective 2:

Newly shaped global supply and value chains

Global Supply Chain Models

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Global Supply Chain Models

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Production Volume: Traditional VS Strategic

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Labour Cost Comparison

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Transformation of Value Chains

Value adding today still means "better" products (value = differentiation) but increasingly more
service-rich products (value = service + intangibles)

  • Luxury segments still heavily rely on the European textile supply chain for their exclusivity and differentiation requirements

  • All other market segments share quite similar "intrinsic" products differentiated by their service content

Value is today created less and less on intrinsic quality and increasingly on intangible properties:

  • Differentiation of standard products

  • Exclusivity

  • Hyper reactivity

  • Innovative & Creative integration

  • Packaging and formats

  • Customization

Perspective 3:

Strategic snapshots

  • Skills & Competences

  • Key Trends

Strategic Snapshots: Skills & Competences for Success

  1. Orchestrators & Merchandisers

  2. Brand management

  3. Innovation

  4. Characterization and differentiation and of standards -Time to market

Strategic Snapshots 1: Orchestrators and Merchandisers

Supply Chain Orchestrators

Capability to orchestrate fragmented and disperse textile supply chains leveraging on intelligence, understanding, technology and organizational practices


Capability to create "consistency" across ranges developed and produced across the globe - leveraging on clear range architecture

Strategic Snapshots 2: Retail and B2B Branding

Retail brands
Growing in importance to create differentiation, loyalty and premiums

B2B branding
In a global world of options, large retailers and brands are loosing product know-how and rely more and more on B2B brands

Strategic Snapshots 3: Innovation

The global market is eager for innovation: new products, new integrated systems, new application...

Strategic Snapshots 4: Differentiation & Characterization

The global industry desperately needs fast and effective differentiation and characterization of standard products:

- adding value to standard products at the latest stage possible + New need for "fast" and custom will soon boom with internet
- Zara model changing the industry

Strategic Snapshots: Key Trends

  1. No More Seasons

  2. External factors torapidly change scenarios

  3. Customization & the Web

Strategic Snapshots: No More Seasons

  • Global Warming

  • Multi seasonal apparel

  • Fast Fashion continual renewal (Make old "seasonal thinking" obsolete)

Strategic Snapshots: External Factors

  • Exchange rates $, Euro, Yuan, Rupee...

  • Petrol and direct impact of MMF & Air transport...

  • Political situation...

    ...can change global landscapeand supply chains in a few months

Strategic Snapshots: Customization & the Web

  • Internet sales rapidly growing (US and north Europe)

  • Focus on specific product categories

  • Will be a relevant channel for apparel sales

  • Example: www.NIKEiD.com

Final Message

It is going to be a challenging global market full of threats but also full of incredible opportunities

It is going to be a talent intensive market where talent will be key success factor

Thank You!


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