Russian textile companies want to become part of the fashion industry. To reach this goal they will have to perfect their products and set up up-to-date garment manufacturing.

Lina Kalyanina and Lilia Moskalenko

For the first time on the Russian textile market, manufacturers have started to appear that are thinking about fashion. Their first steps demonstrate that their strategies for breaking into the fashion industry make sense. Despite the industry’s low efficiency, the turnover at the most progressive companies is increasing 30-40% each year and profits have exceeded 10%. Two Russian textile companies, Russian Textile Alliance and Guta Textile, are demonstrating that their strategy is working.

No quick profits

The Russian Textile Alliance and Guta Textile were created as their owners bought up old textile companies. However, after they had already started buying up textile manufacturing facilities, the managers at both companies realized that they would not make any quick profits. The factories were either losing money or making minimal profits. At first, the holdings’ factories continued to produce their standards assortment of simple, cheap fabrics in the form of unprocessed gray goods. This fabric was exported, sent to fill Ministry of Defense orders, or sold in crudely finished form to regional garment factories. The new owners soon realized that making a cheap product meant competing with the Chinese to lower costs while constantly sacrificing quality. This strategy would not bring the expected dividends. It was obvious: the companies needed to change their product.

Shifting patterns

This new product had to be different from the old one in every respect, from spinning quality to final finishing. It was clear that this would require the companies to reequip their facilities at every stage of the production process. Russian companies’ outdated and worn equipment is one of the main reasons foreign manufacturers can beat Russian companies in terms of quality. The companies’ managers thought their most important task was to modernize their fabric finishing equipment and increase the pace of product introduction. “Until recently, fabric was printed in Russia using copper rollers. If you wanted to change the pattern, you had to do it by hand and the chances you wouldn’t match the patterns up were very high. Obviously, it isn’t possible to keep up with fashion with equipment like that,” recounts Mr. Akhabaev, Chair of the Board of Directors at Russian Textile Alliance. New equipment allows the ideas of artists and designers to be printed precisely on fabric. This ability will play a decisive role in both companies’ new strategy. “Patterns sell fabrics. 70% of the time consumers buy fabric for its design and only 30% for its technical properties,” argues Mr. Popandopula, General Director at Guta Textile. Designers are now charged with creating the trendy, contemporary products demanded by the market.
It is fairly difficult to become a fashion textile manufacturer, as world fashion begins with textiles and there is no point in competing with the Europeans in this area. “Yet we know Russian taste well,” says Lyubov Perkova, a designer at Russian Textile Alliance. “We know what consumers in Ryazan need and what people want in the Far East. This is our advantage, because foreigners can’t figure all this out. That’s why Chinese sheets and bedding sell really poorly in Russia.” Artists were able resolve yet another issue crucial to manufacturers, how to change patterns and product lines quickly. Apparently, the demand for bedding textiles changes with the seasons, just like the demand for clothing and for garment fabrics.

A textile supermarket

Today’s textile companies are forced to solve more than manufacturing problems. While modernizing their factories, managers at both companies began to create a system for selling and promoting their products. The question of how to reach consumers became one of how to expand product offerings. Russian Textile decided to create its selection according to supermarket principles. “Today, garment makers go where there is the widest selection of fabrics,” notes Mr. Volkov, the company’s General Director. To create this selection, the company supplements its products with various other fabrics and notions from other Russian and foreign companies. “We include a lot of imported fabric in what we offer. By doing this, we hope not only to expand our selection, but also to get a place on the market as textile dealers. Thanks to this expanded assortment of fabrics, our products sell for more,” Volkov states.
The situation on the garment-oriented fabric market is more difficult. The majority of Russian garment makers still prefer imported fabrics. “Currently, we send most of our linen to Turkey and the US. They are the easiest markets. Turkey has a very developed cheap garment industry and in the US fashion is a very relative concept, in contrast to Europe,” says Mr. Aliev, Commercial Director at Guta Textile. Experts at the two companies believe that there is a fairly high potential demand for Russian fabrics among Russian garment companies, if the fabric is of reasonable quality. Expanding Russian clothing companies such as Paniter, Tvoe, and OGGI are facing stiff competition from Western brands and are looking to lower costs. That’s where Russian fabrics come in.

Just sew it yourself

Textile companies see that their work with garment manufacturers is in its initial stages, but they admit that there are few garment companies today operating according to market principles. “We are building large finishing facilities with cutting-edge digital equipment and are filling orders rapidly. But 85% of Russian garment factories are small regional companies that prefer to sew the same old thing. Almost to the point of absurdity. For example, we can produce wider fabrics on our new machines that make better-quality bed sheets without the infamous center seem. But factories refuse to buy these fabrics because they would be required to change something in their production process, like buying bigger cutting tables. As a result, imports have captured another ten percent of the market,” relates Akhabaev.
Difficulties with garment manufacturers have forced textile companies to start sewing on their own. Russian Textile has already started to offer entire sheet sets, bathrobes, and shirts to retail consumers. The company gives its best and most exclusive fabrics to the sewing division with patterns not available on other fabrics for sale. “We think it would be better to expand our garment division then to retrain garment factories. The entire world uses cloth with a three meter bias, which is why it makes sense for us to move in that direction. At the same time, it is more profitable to make and sell complete sheet sets because we gain another 10-15% in added value. This will be our main direction for the near future,” states Akhabaev.
By autumn, Russian Textile Alliance plans to launch its own brand name on the market and sell finished products to retail consumers.

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