With 700 stores in more than 300 cities, Gloria Jeans (GJ) is Russia’s largest vertically integrated fashion retailer offering apparel and accessories for adults and kids. It has design and production centres in the Asia-Pacific region and 25 per cent of its assortment is produced in its Russian factories. Bangladesh also contributes significantly to its sourcing with a variety of products like sweaters and knit denim from basic to difficult styles with washes. GJ was planning for an IPO but put it on hold, first due to Covid and later due to the Russia-Ukraine crisis. As things are improving now, the company is again preparing for IPO. Apparel Resources gets into a candid discussion with Moyeen Ahmed, General Manager, Bangladesh and India – Gloria Jeans, who has been in the RMG trade for the last three decades. Here are the excerpts from the interview.
Growth in sourcing
Moyeen joined Gloria Jeans in 2015 at a time when the company used to source apparel worth US $ 5 million per year and had only seven staff members but realising Bangladesh’s potential as a good business sourcing platform, the company approved 52 staff, new office at the end of 2016, and the very next year, it achieved US $ 80 million business turnover. Last year, the company sourced a total of 13 million pieces and it is forecasted to increase the same by 10 per cent – 15 per cent this year. This can increase even more if the brand gets better prices than Vietnam.
Product requirement
Because of innovation and quality development in the high-end category, GJ is shifting some of the high-end products from Turkey, Vietnam and China to Bangladesh. Moyeen believes that in the last few years, many denim products have been shifted from GJ’s Russian factories to Bangladesh.
Moyeen further averrs, “All these products come with critical washes – grinding, whiskering, destroy, PP spray with acid wash, overdyeing, snow wash using different qualities of denim fabrics, ready for dyeing (RFD) fabrics. Thanks to our vendors and my team, we developed Turkey, Chinese and Pakistani fabric in Bangladesh and used it for GJ styles.”
Expansion in finishes
In knits, GJ’s Bangladeshi vendors are using heavy washes like dip dye, snow wash, acid washes, spray dye, cool dye, garment dye with print, applique, embroidery, indigo dyed fabric, laser destroy and overdye etc. This season, fashion products have increased compared to last year in Bangladesh.
High duty disadvantage
The growth in sourcing of the company could take place due to several efforts by its vendors as well as the thrust of Gloria Jeans on transparency. Its suppliers submit open costing – component costing with actual marker and consumptions. GJ uses its software where vendors have access to submit their prices.
And all this is despite that compared to Vietnam, Bangladesh has an average 12 per cent – 35 per cent duty disadvantage in Russia and the FTA between Bangladesh and Russia has a long way to go.
“Duty disadvantage is impacting hugely to grow Russian business volume in Bangladesh. Russia’s product duty depends on the weight of products, so it varies from 12 per cent (light knit products) to 35 per cent (on heavy denim). Bangladesh government has a good diplomatic relationship with Russia, however they need to initiate discussion for FTA through Bangladesh government stakeholders and of course our BGMEA leaders. As and when FTA takes place or duty is removed, orders will start flowing from Russia,” says Moyeen.
Sustainability at the core
GJ motivates its vendors to use fabrics made from recycled materials, consume less water and electricity and control the emissions of harmful substances during production. The thrust is on products made by BCI Cotton, organic cotton using bio-finish. All its knit factories are OEKO-TEX certified and use
Blue Sign chemicals. As a traceable tool, it uses QR code in all product hangtags as it is made mandatory by the Russian Government.
Sustainability is reflected in the retail operations of GJ also as its stores have implemented the electronic receipt system and use hangers made from recycled materials. It accepts clothes for recycling in the most high-tech store in Europeisky Mall in Moscow.
Advantage Bangladesh
In his three decades of working, Moyeen has witnessed how the industry has evolved a lot on all fronts like now, Bangladesh has good merchandisers, QCs, technicians, compliance managers and sourcing professionals with outstanding qualities while earlier the industry used to depend on foreigners.
“Back in 2004 when I became Country Manager, there were few local country managers in the Bangladesh market and most of them were foreigners. But today, many capable local country managers are managing the top brand offices in Bangladesh as well as regionally. I worked as a Sourcing Director in Toronto with two renowned Canadian companies for six years which is also an example of Bangladeshi professionals’ growth,” he proudly says.
On the infrastructure front also, the industry has evolved and today boasts of state-of-the-art machinery in woven as well as knit segments right from weaving, (air jet machines with 800-1100 RPM), dyeing (using Thermosol 5 chamber continuous process), washing plants with robotic PP spray, whiskering with laser to value addition like advanced digital fabric printing machines.
Moyeen suggests that to further improve, the factories need to increase production efficiency to have better prices and to increase profit margin, besides focusing on seasonal R&D and giving continuous product design presentations to customers to select and place orders. Courage to accept critical fashion items to move to the next layer from the average products is also required.
