Iran used as production hub by Turkish clothing brand

Turkish company, LC Waikiki (LCW) has been in negotiation with Iran’s Ministry of Cooperatives, Labor and Social Welfare and the Ministry of Industries, Mining and Trade for the past eight months and the Turkish side has so far surveyed over 70 apparel factories and manufacturing units in Iran, said Director General of Textile and Clothing Department at the Ministry of Industries, Mining and Trade Afsaneh Mehrabi.

Iranian clothing company Ronak Jean has been shortlisted. LCW has already placed order and the Iranian company’s production line has been making clothes for the Turkish brand labeled “Made in Iran” tags for the past few months. LC Waikiki has become the first major foreign apparel manufacturer to officially start cooperation with domestic garment players in Iran.

Most of the apparel ordered by LC Waikiki are produced [in Iran] for export purposes and only a small share has been considered for distribution in domestic stores. The first phase of the collaboration will see LCW place orders with selected Iranian apparel makers worth around €20 million in the next year and a half.

Planning and implementation of next phases depend on the result and success of the first phase, but the ultimate goal is the establishment of an independent apparel factory in Iran by LC Waikiki.

All the exports will be done under the parent company’s supervision and management. The apparel, labeled “Made in Iran” under LC Waikiki brand, will be exported to LCW branches in other countries. The official noted that the whole project is expected to create about 5,000 jobs in Iran.

According to Mehrabi, considering Iran’s geographical position, the export destinations are highly likely to target Russia, its neighbors and regional countries such as Iraq. Steps have been taken by the Ministry of Industries, Mining and Trade recently to revive the domestic apparel industry and regulate clothing imports.

The ministry has decided that foreign brands willing to sell their products in the Iranian market are required to directly apply for permits to acquire representative sales outlet in Iran without taking recourse to middlemen.

In addition, the representatives are required that 20% of the value of their imports (in rial terms) be produced inside Iran during the first two years of their business activities. After two years, the authorized representatives are obliged to export 50% of the apparel produced domestically.
Deputy minister of industries, mining and trade, Yadollah Sadeqi, recently said that 14 companies have accepted the new regulations and conditions and they are in the process of registering their representatives.

LC Waikiki was launched in France in 1988. After 1997, it operated as a Turkish brand under the umbrella of LC Waikiki Magazacilik Hizmetleri Ticaret A.S. Today LC Waikiki trades in 821 stores in 36 countries, offering a wide range of clothing for men, women and children at reasonable prices.