Increasing costs have prompted another major global brand to distance itself from Türkiye’s textile sector, as The North Face has cut 80% of its orders with long-standing supplier Gelisim Tekstil, shifting most of its production to Vietnam and Bangladesh.
This move by VF Corporation’s renowned brand marks a significant shift away from Türkiye’s position as an essential manufacturing hub for international labels. The North Face production shift from Turkiye underscores the growing challenges faced by local manufacturers.
Major Production Loss
As reported by local media, Gelisim Tekstil, which previously served as The North Face’s second-largest global producer and the largest within the European Union, will now only receive orders valued at €4-5 million ($4.6-5.8 million) from the brand.
“Our largest client was VF Corporation. We manufacture for several well-known brands, including The North Face, Vans, Timberland, Dickies, Supreme, Eastpak, JanSport, Napapijri, Smartwool, Icebreaker, Kipling, and Altra,” stated Mustafa Akcay, chairman of Gelisim Tekstil’s board.
He added, “We ranked as The North Face’s second-largest producer worldwide and largest in the EU. However, starting last year, they opted to move production to Bangladesh and Vietnam. Around 10-20% of our production will remain.”
Akcay further elaborated on the scale of the loss, explaining, “We previously produced about €30 million worth of goods, but now we’re facing a reduction of approximately €25 million. Essentially, out of 4 million pieces, we will only retain around 400,000-500,000 pieces due to soaring costs.”
Employment Concerns
The reduction in orders may result in significant job losses across Gelisim’s facilities. The company employs roughly 300 staff at its Corlu factory, which received a €35 million investment in 2023; 350 employees at its Adiyaman plant, constructed with a €5 million investment; and 500 at its Istanbul facility, with an additional 60 workers focusing on education and energy sectors.
“With 1,200 employees currently, if conditions do not improve, we may have to let some workers go. Starting in May next year, we could see our staff numbers halved,” Akcay warned.
The company’s production capacity, which was fully utilized at 1 million pieces per month in 2022, has now plummeted to between 400,000 and 500,000 pieces monthly just to maintain operations.
Cost Competition Challenges
Akcay pointed out the escalating cost disparity with other manufacturing regions: “A product that we price between €5-€10 ($5.86-$11.72) can be produced in Kenya for just $2.8. Competing brands are also manufactured in socially responsible areas. While China is frequently mentioned, places like Bangladesh, Sri Lanka, Cambodia, and Vietnam are increasingly serious contenders.”
The cost gap has enlarged rapidly over the past three years. “The minimum wage has surged by 302%, inflation has reached 290%, while the dollar has increased by only 132%. This means our costs have effectively doubled in dollar terms,” Akcay explained.
“In 2023, labor costs rose by 110% and the exchange rate by 50%. We managed to absorb the differences in yarn prices but, in the coming years, labor costs soared well above the exchange rate, making us more expensive than even our EU counterparts.”
Domestic Market Challenges
Vedat Yavuz, vice chairman of Gelisim Tekstil, discussed their longstanding relationship with The North Face: “We have been one of The North Face’s top suppliers for 10-12 years, recognized for our quality and timely deliveries. They decided to part ways purely based on pricing.”
The company is exploring opportunities with domestic Turkish brands but faces fresh challenges: “We have started production for a few local brands in Türkiye. However, payment terms can stretch to 180 days. When you factor in that product preparation also takes around 180 days, payment timelines can extend up to a year.”
The North Face production shift from Turkiye exemplifies the wider issues facing the Turkish textile industry and highlights the urgent need for adaptation amid evolving global market dynamics.
