Cosmetics plus clothes
“Faberlic” was engaged in the manufacture of women’s clothing, said Vice-President of the company Vladislav Davankov. The first collection of “Faberlic” started to sell through distributors and its online store in the fall of 2015, and this spring has released a second collection. The range includes, for example, women’s dresses and turtlenecks from 1 to 3 thousand rubles.
The company has expanded the range of household chemicals and accessories in 2011. “We saw good response from our sales consultants and consumers and began to develop the category of household chemicals and products for the home,” explains Davankov. In 2013-2014, “Faberlic” was added to the range of children’s clothing, hosiery products and underwear for women. According to British established a settlement there, each new position caused a surge of interest from buyers, so the company decided to engage seriously in the direction of apparel.
Now “Faberlic” produces clothing under contract primarily on foreign exchanges in China, Bangladesh and Uzbekistan; less 10% orders for domestic plants. But decided to find a site for building garment factory in the free economic zones in Russia, in particular in the Kaluga region, told Davankov. “The cost of labor in Russia and China is quite comparable, and the final cost of products will be virtually identical,” he said.
Vice-President did not name the planned volume of production, but noted that the company is going to invest in a factory is $10 million of their own funds and hopes to launch it in early 2017.
Due to the devaluation of the rouble production costs in Russia are now almost on par with China, said in November 2015 Deputy Minister of industry and trade Viktor Evtukhov: “In some cases, the effective cost of the Russian products could be even below Asian by 10-15%”. Tuesday, April 5, Evtukhov told reporters that officials are now trying to convince Russian and international retailers to place production in Russia. “We want to interest them to locate production in Russia, — he said. — Taking into account the devaluation of the ruble, I believe, we have great prospects”.
In particular, he said that the Ministry proposes options for Zara, Benetton, “the Decathlon” and “Sportmaster”. The representative of “Sportmaster” confirmed that the company is now looking for new sites in Russia for the placement of orders, including with the Ministry of industry and trade. Last fall found that Bosco di Ciliegi Mikhail Kusnirovich plans until 2018 to build in the Vladimir region factory for sewing sportswear, investing about 1 billion rubles.
Sales above the market
In “Faberlic” I expect that the share of clothing in circulation will gradually increase, but don’t call the forecast. According to British established a settlement there, now about 20% of the company’s sales in the money necessary for clothes and linen. In 2015 the revenues of “Faberlic” was increased by about 50%, to 14.2 billion rubles, he said.
Total sales of the Russian MLM companies (multi level marketing, multi-level/network marketing method of distribution of goods or services from one person to another for a Commission; this scheme is used, for example, Avon and Oriflame) in the past year, sank 5.5% to 154.2 bln rubles, said President of the direct selling Associations Tamara Shokareva: “We are accustomed to the fact that during crises the rotational speed drops, but for the first time, we do not observe the inflow of new consumers and distributors”. However Faberlic last year showed high growth in sales, confirms it: “Faberlic found a good niche. Find today cheap light industry products difficult.”
However, sales of clothes for the members of the Association in 2015 increased by 21%, says Shokareva. In addition Faberlic clothing deals, for example, Avon. The Avon representative Maxim Rakov said that now the goods for the house, articles of clothing and accessories for Avon made in factories in Turkey, India and China, but the company is considering production of some items in Russia — which he did not specify.
According to the company Fashion Consulting Group (FCG), the smallest impact of the crisis has been the budget price segment of the apparel market. According to the forecast of FCG, the share of the budget segment of the apparel market in 2015, sank no more than 6-10% in monetary terms. The volume of the upper segment of apparel market has decreased by at least 15-20%, and average 35-45%. In General, Russian clothing market, by the end of 2015 decreased by approximately 20%, to 1.1 trillion rubles.