Turkish brands are beginning to reconsider their strategy for working in the Russian Federation

Turkish clothing brands, which entered the Russian market after the departure of some Western brands, are beginning to reconsider their strategy for working in the Russian Federation. Thus, the distributor Jamilco closed the only Ipekyol and Twist stores in the country a year later. Experts say that new Turkish brands are poorly known due to low marketing activity, high competition with Russian clothing chains and the growing popularity of online shopping, including from abroad.

The stores of the Turkish clothing brands Ipekyol and Twist, which opened in the fall of 2022 in the Afimall shopping center in Moscow, have stopped operating, Kommersant noted. Both brands are part of the Ayaydin Miroglio Group and are represented in the mid-price segment. In Russia, their development was carried out by the Russian distributor Jamilko, which mainly works with premium brands (see “Kommersant” dated October 4, 2022). Now, instead of Ipekyol, Afimall has a store of the Italian brand from the Jamilco portfolio, Elena Miro. And in place of Twist, a store of another Turkish brand, Daniel’s Paris, is preparing to open. Jamilko did not answer Kommersant’s questions.

Nadezhda Tsvetkova, head of retail space rental at the CORE.XP retail department, says that Jamilko initially opened Ipekyol and Twist stores in pop-up format to test interest in the brands from customers. And Fashion Consulting Group (FCG) CEO Anna Lebsak-Kleymans claims that the owner of the Ipekyol and Twist brands decided not to renew the distribution agreement with Jamilco, but to open his own office in order to work directly on the Russian market. Ayaydin Miroglio Group could not be reached by email.

Turkish brands have become more actively interested in the Russian market after the suspension of work and the departure of some Western fashion brands from the country due to the outbreak of Russian military operations in Ukraine. In particular, the Swedish H&M Group, the Spanish Inditex (brands Zara, Massimo Dutti, Pull & Bear, Oysho, Bershka, Stradivarius), and the Japanese Uniqlo stopped working. According to NF Group estimates, in the first half of 2023, six new brands from Turkey appeared in Russia, which accounted for 58% of the total number of new foreign retailers. For example, Fiba Retail, which developed the Marks & Spencer and Gap chain stores in Russia, introduced Turkish Club, NetWork, Mudo, Oxxo to the market.

But, Ms. Tsvetkova notes, due to the large number of brands that appeared on the Russian market almost simultaneously, it has become difficult for consumers to navigate their diversity. A Kommersant source on the retail real estate market speaks of concerns among some shopping center owners about the weak attendance and revenue figures of some stores of new Turkish brands.

Managing partner of Vanchugov and Partners, Alexey Vanchugov, notes that in 2022, many foreign retailers who decided to enter the Russian market thought that with the departure of international players, it would be easy to win local buyers and take a significant market share. But, industry analyst Olga Steinberg points out, competition in clothing retail remains very high, especially from local brands that are actively investing in marketing and expanding the range. According to NF Group, 85% of the space of departed international brands was occupied by Russian brands.

Alexey Vanchugov adds that for consumers, price remains one of the determining factors when choosing clothes, so mass brands have a better chance of successful development. Turkish brands of the mass segment, such as Koton, LC Waikiki, have been present on the Russian market for a long time and have their loyal customers, confirms Olga Steinberg. And in the higher price segment, Mr. Vanchugov continues, the reduction in assortment is less noticeable and buyers are left with an alternative in the form of Western brands operating in Russia through wholesale supplies. In addition, according to the expert, the popularity of online shopping and shopping while on vacation abroad is growing, where all the usual brands are available to Russian consumers.

Alina Savitskaya