Gon lose US orders

15 July 2003




So much industrial and export growth has been spearheaded by the US that the economic downturn being experienced there is being felt by global producers, including Türkiye. Leather belt and bag makers, Gon Deri of Istanbul, who have been making handbags for fashion heavy weights Donna Karan and Coach, have lost orders from both these clients due to Türkiye's relatively high production costs. These orders went to China, where the US can source more economically to suit leaner retailing times. According to Gon's managing partner, Engin Altas, his profit margins are down to about 2-3%, leaving little leverage when negotiating with global luxury producers, where margins touch 60-70%. Producing for luxury goods makers is tough going but Gon are now flirting with a new fashion partner, this time making the initial order for leather skirts and trousers for UK-based retailer, Next. This fashion retailer reported sales of £2.2 million to year end February 2003 and profits increased by 20%. Next employ close to 400 people in Türkiye and many of their branded fashion items are made in this country.



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