Derimod adapt to globalisation5 September 2005
During 2005, many of the stories coming from Türkiye have highlighted how surviving tanners are coping with leaner times, lower margins and global realities. Many tanners who saw garment production as the logical progression to tanning skins subsequently backtracked to concentrate on their core tannery skills. Istanbul-based Derimod was a fashion icon for decades and tanned their own doubleface leathers, exported efficiently and were pioneers in brand building. They are capitalising on the latter and have ceased to manufacture any leather items. Although a listed public company, Derimod declined interviews with Leather International but an informed insider stated that this firm now only imports and resells garments and shoes in their own retail shops. Earlier in 2005, Derimod signed an exclusive agreement with Bata, a global footwear brand, to shop-front their items in the local Turkish market. Customers formed queues for imported shoes at one of Derimod's bargain outlets, local media recently reported. Whilst Türkiye cannot yet be labelled a skill-intensive, service orientated economy, this company, at least, may have grasped the concept that China and India have workers who are equally, if not more, productive than those in developed economies but who are prepared to work for lower wages. Why compete with this reality, when it is better to sell on imported products to hungry local consumers and not worry about comparative wages, production costs, outsourcing, competitive advantage, globalisation - or, much less, tanning?