Menswear firm from Turkey aims to sew up shoppers in China

Kigili, a Turkish menswear brand, aims to open at least 500 stores around China within five years, targeting middle and high-end shoppers.

The first store opened in the upmarket Zhujiang New Town business area in Guangzhou in August. Next on the list are stores in Shenzhen, Beijing, Shanghai, Hangzhou, Qingdao, Hong Kong and Macao, said Selcuk Alperen, chairman and owner of Kigili Asia.

Kigili, named after its founder Abdullah Kigili, got its start in 1938 by selling fabric for men's clothing. In 1965, it began to sell menswear under the brand Kigili, and it opened its first store in Istanbul in 1969.

It runs 230 stores and has 600 shops within larger stores in Turkey and other countries, including Germany, Austria, Belgium, Cyprus, Azerbaijan, Egypt and Georgia.

"We aim to sell a European brand at an affordable price with a variety of styles, fabrics and designs adapted to Chinese customers," Alperen said.

Alperen said that there's a gap in the Chinese market between luxury labels like Giorgio Armani SpA and Chinese brands.

He sees strong purchasing power in China, even though the growth of the world's second-largest economy is slowing down.

"The growth is still higher than in many other countries. ... I travel a lot and if you see China from the outside, you see a hugely dynamic economy. The government is stable and the [size of the] population is also very important.

"The European market is full. You have every brand in Europe. In China, people want to try new things."

Turkey is the world's 15th biggest economy with many strong brands, factors that are behind the company's confidence in entering the Chinese market, Alperen said.

Competition in the middle to high end of the menswear market in China has intensified, with domestic and international brands battling for a share, said Xiong Xiaokun, a researcher with market research firm CI Consulting.

Imported international labels sell at high prices and generate "rather high" gross margins, Xiong said, adding that middle- and high-level business menswear is selling pretty well.

Among domestic brands, Romon, Septwolves, Seven, Firs, K-Boxing, Hailan Home and Peace Bird enjoy relatively high recognition. Some brands from overseas, which target only the Chinese market, have also gained share, he said.

The experience with the first store in Guangzhou has been "very positive and better than expected," Alperen said, adding that the clients include employees of banks, the government and corporate management.

Within China, Kigili aims to own 100 stores, with the remaining 400 to be franchised.

It will invest $200 million in the retail business in China in the next five years, hiring 6,000 to 7,000 employees.

Alperen is envisioning $1 billion in annual revenue when all 500 stores are open.

Another ambition of Alperen is to import more Turkish leather into China. This business, which was launched two months ago, is expected to generate $700 million a year within five years.

China is the third-largest trading partner of Turkey, after Germany and Russia, and its 11th largest export market.

Turkey exported $2.96 billion worth of products to China in the first 10 months of this year, up 35.8 percent year-on-year, and imported $20.47 billion in products from China.