Türkiye's Clothing Makers Face Rising Costs from Push to Help Textile Sector

Commuters, seen throughout a glass, arrive to Kadikoy ferry terminal in Istanbul, Türkiye, Thursday, Nov. 16, 2023. (AP Photo/Francisco Seco)
Commuters, seen throughout a glass, arrive to Kadikoy ferry terminal in Istanbul, Türkiye, Thursday, Nov. 16, 2023. (AP Photo/Francisco Seco)
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Türkiye's Clothing Makers Face Rising Costs from Push to Help Textile Sector

Commuters, seen throughout a glass, arrive to Kadikoy ferry terminal in Istanbul, Türkiye, Thursday, Nov. 16, 2023. (AP Photo/Francisco Seco)
Commuters, seen throughout a glass, arrive to Kadikoy ferry terminal in Istanbul, Türkiye, Thursday, Nov. 16, 2023. (AP Photo/Francisco Seco)

Turkish clothing manufacturers, the third-largest suppliers of apparel to Europe, face higher production costs and risk falling further behind their Asian rivals after the government hiked taxes on textile imports, sector leaders say.
Ankara raised tariffs by 30-100% on hundreds of incoming textile products last week, aiming to support local yarn and fabric manufacturers that appealed for support against a wave of cheaper imports.
Apparel officials say the new taxes are squeezing the industry, which is among Türkiye's biggest employers, supplying heavyweight European brands such as H&M, Mango, Adidas, Puma and Inditex.
Job cuts could come, sector representatives say, as import costs rise and Turkish producers shed market share to rivals like Bangladesh and Vietnam.
Exporters can technically apply for exemptions from the tax, but industry sources say the exemption regime is costly and time-consuming, and in practice does not work for many companies.
The sector was already fighting soaring inflation, waning demand and lower profit margins due to what exporters see as an over-valued lira, as well as the effects of Türkiye's years-long experiment with cutting interest rates as inflation rose, a policy recently revisited.
The price of a Turkish-made t-shirt is now 40% higher for a European shopper than one from Bangladesh, said Seref Fayat, chairman of Türkiye's TOBB Clothing and the Apparel Industry Assembly. A couple of years ago the gap was 15-20%, another source said.
"Fashion brands can bear higher prices up to 20%, but anything more leads to market losses", Fayat said.
Timur Bozdemir, president of DF Manhattan Inc, which manufactures women's garments for the European and US markets, said the new tariff will raise the cost of a $10 t-shirt by no more than 50 cents.
He does not expect to lose customers, but said the changes reinforced the need for Türkiye's apparel industry to shift from mass production to value-added.
"If we insist on competing with Bangladesh or Vietnam for a $3 t-shirt, no doubt we will lose," he said.
COMPETITIVE EDGE
Türkiye exported $10.4 billion in textiles and $21.2 billion in clothing last year, making it the world's fifth and sixth biggest global exporter respectively.
It is the second-largest textile and third-largest clothing supplier to the neighboring European Union, European Apparel and Textile Confederation (Euratex) data shows.
But its share of the European market slipped to 12.7% last year from 13.8% in 2021.
Western customers turned to Türkiye during the COVID-19 pandemic to cut freight costs amid supply disruptions.
When it ended, the combination of plunging shipping costs and rising domestic inflation dulled its competitive edge.
Textile and apparel exports fell more than 8% through October this year, while overall exports were flat, sector data shows.
The textile sector, facing a rise in cheaper imported fabrics and yarns which in part sparked the need for the tariffs, saw its number of registered employees falling 15% through August.
Its capacity utilization rate was 71% last month, compared to 77% in manufacturing overall, and sector officials say the rate is near 50% for many yarn manufacturers.
"I've almost stopped production and cut most of the jobs in my yarn facility - and I'm not the only one in this situation," said Fatih Bilici, who runs an Osmaniye-based yarn factory that supplies local and foreign markets.
His company cut daily production to 5 tons from 50 tons a few months ago. He said the tariffs are vital for an industry struggling to survive.
"It costs me $3.20/kg to manufacture, whereas my Uzbek rival sells it at $2.70. How can I can compete?".
The lira has shed 35% of its value to the dollar this year and 80% over five years. But exporters say the lira should depreciate yet more to better reflect inflation that is running above 61% and touched 85% last year.
TOBB's Fayat said the textile and apparel sector had cut 170,000 jobs so far this year. As monetary tightening cools an overheated economy, it is expected to hit 200,000 by year-end.



L’Oreal Shares Bounce on Third-Quarter Sales

A L'Oreal sign is displayed at the beauty products section of a department store inside a shopping mall in Beijing, China June 10, 2025. (Reuters)
A L'Oreal sign is displayed at the beauty products section of a department store inside a shopping mall in Beijing, China June 10, 2025. (Reuters)
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L’Oreal Shares Bounce on Third-Quarter Sales

A L'Oreal sign is displayed at the beauty products section of a department store inside a shopping mall in Beijing, China June 10, 2025. (Reuters)
A L'Oreal sign is displayed at the beauty products section of a department store inside a shopping mall in Beijing, China June 10, 2025. (Reuters)

Shares in L'Oreal rose 4% on Friday, hitting their highest in more than two years, after the French cosmetics giant reported third-quarter sales well ahead of expectations on strong demand for premium products in China and elsewhere.

Sales from July ‌to September rose ‌7.7% on an adjusted like-for-like basis ‌to €11.56 ⁠billion ($12.95 billion), topping a ⁠consensus analyst forecast of 5.9% growth in a Visible Alpha poll, L'Oreal said late on Thursday.

The maker of Lancome creams and Prada perfumes beat estimates for growth in all regions apart from Latin America, with North Asia, which is ⁠predominantly China, significantly ahead. All of its ‌divisions apart from ‌its mass market unit exceeded expectations.

"L'Oreal, once again, beat a ‌high bar," Barclays analysts said in a note.

Analysts ‌at Jefferies called the report "an impressively strong update", highlighting a "momentum shift in China and Europe" that lifted the growth rate in its Luxe division.

The group generates ‌a third of its revenue from its luxury division, but in China that ⁠business ⁠accounts for about two thirds of its sales in the market, positioning it well for a pick-up in Chinese demand. L'Oreal says it is growing three times faster than the market in China.

Shares were up 4.4% at €431.2 ($482.60) by 0917 GMT, the highest since June 2024. The shares are up by more than 17% this year.

"We see scope for the shares to test €450 as investors increasingly recognize the durability of its superior growth profile," the Barclays analysts added.


Gucci Owner Kering Drops 12% as Luxury Braces for Tough Winter

The logo of French luxury group Kering is pictured on the day of the Kering General Assembly meeting at the company's headquarters in Paris, France, May 28. (Reuters)
The logo of French luxury group Kering is pictured on the day of the Kering General Assembly meeting at the company's headquarters in Paris, France, May 28. (Reuters)
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Gucci Owner Kering Drops 12% as Luxury Braces for Tough Winter

The logo of French luxury group Kering is pictured on the day of the Kering General Assembly meeting at the company's headquarters in Paris, France, May 28. (Reuters)
The logo of French luxury group Kering is pictured on the day of the Kering General Assembly meeting at the company's headquarters in Paris, France, May 28. (Reuters)

Shares in Gucci owner Kering tumbled 12% on Friday after the group reported further sales declines, but said it would stick with CEO Luca de Meo's turnaround plan and accelerate store closures, aiming for 125 by year-end.

The recovery long promised by luxury brands seems nowhere in sight, as the expansion of war ‌in the Middle ‌East, along with China's tax crackdown on ‌the ⁠wealthy, piled further ⁠pressure on the world's biggest luxury conglomerates in the third quarter, and executives buckled in for a tough winter.

Riots in Paris, leaving Louis Vuitton shop windows smashed and electric-bike bonfires near luxury shopping hub Place Vendome, threw into sharp relief the political risk faced by luxury brands not just abroad but also ⁠at home.

Shares in LVMH and Hermes were ‌also down 1% to 1.5% on ‌Friday, as crude prices hit their highest level since early May, worsening ‌the squeeze on households that has curbed consumers' ability to ‌splurge on handbags and clothes.

Gucci's decline has continued despite de Meo's plan to make the brand's prices more enticing to middle-class consumers and creative director Demna's new collections hitting stores.

"The progress made on ‌improving brand desirability remains in its very early stages," JPMorgan analyst Chiara Battistini said in a ⁠note. Gucci ⁠sales improved in wholesale, but were down 6% overall as fewer shoppers visited its stores.

While Kering struggles to execute a turnaround against a weak economic backdrop, even high-end Hermes is showing signs of slowing, with its ready-to-wear division falling 2% in the third quarter due to weak Chinese demand. Overall, Hermes reported its weakest quarterly sales growth since 2020.

Across the sector, valuations have taken a beating as investors reassess future growth prospects. After a 40% slide in share price since January 1, Hermes' valuation is its lowest since 2014, while LVMH's is at a 10-year low.


UK's Debenhams Returns to Profit after Five Years, Expects Further Cost Cuts

FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
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UK's Debenhams Returns to Profit after Five Years, Expects Further Cost Cuts

FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

British fashion ‌retailer Debenhams , also known as boohoo, reported a profit for the first time in five years on Friday and expects further cost cuts as a turnaround plan gathers pace, said Reuters.

Here are some more details:

-The company reported pretax profit of £28.3 million ($37.89 million) for the six ‌months ended August ‌31, compared to a ‌loss ⁠of £17.9 million a year ⁠ago, its first profit before tax since August 2021.

-Expects to reduce costs related to depreciation, lease and interest in fiscal year 2028, while a new financial ⁠facility should further cut costs.

-Debt ‌to be ‌negligible by the end of the ‌year thanks to the disposal of ‌Sheffield automation and lease assignment and sale of Nasty Gal brand, the retailer said.

-The company reported steady growth ‌in September and reiterated its previous annual forecast of gross merchandise value (GMV) ⁠growth ⁠and adjusted core profit no less than £59 million.

-It expects to deliver more than £100 million in profit before tax in the medium term and become a multi-billion-pound GMV business.

-The group's turnaround plan has been focused on streamlining its operations to tackle mounting debt and slow demand at its youth brands.