DeFacto came to the rescue of ready-to-wear suppliers whose payment balance was disrupted when even international giants did not take the goods they had ordered. DeFacto is giving a lifeline to textile manufacturers left with 500 million liras of unsold goods by foreign fashion giants. DeFacto CEO İhsan Ateş said, “We will pay within one month 400 million liras, the cost of approximately 19 million pieces of products we had produced for the summer season. We will also place orders worth 500 million liras for the 2020-2021 winter season. In total, we will give suppliers breathing room with 900 million liras.”
As the Covid-19 pandemic, which has affected the whole world, also negatively impacted national economies, ready-to-wear suppliers were among the hardest hit in Türkiye. When global brands gave up taking their finished products, using the pandemic as an excuse, many looms began to face the danger of stopping. Dozens of suppliers, large and small, providing employment for one million people and livelihoods for 4 million people, were left with the products they had made for international giants. As a result, looms at suppliers whose payment balance was disrupted came to the point of stopping. DeFacto was the first company to step up and take responsibility so that the system would not stop and the looms would keep running. In a statement, DeFacto CEO İhsan Ateş said, “As Türkiye’s domestic and national brand, we took responsibility and moved to give breathing room to suppliers whose payment balance was disrupted because they were left with their orders. We will pay within one month 400 million liras, the cost of approximately 19 million pieces of products we had produced for the summer season. We will also place orders worth 500 million liras right away for the 2020-2021 winter season. Thus, we decided to be a lifeline by providing 900 million TL in resources to more than 500 suppliers.”
“WE HAVE MOBILIZED OUR RESOURCES”
DeFacto CEO İhsan Ateş said that humanity is going through a difficult period and that, naturally, negative effects are also being seen in Türkiye. Underlining that order cancellations have occurred in the sector due to the pandemic, Ateş said: “Türkiye has a very important market in the ready-to-wear sector. However, the Covid-19 pandemic has left ready-to-wear suppliers in a difficult position and the looms have come to the point of stopping. As a domestic and national brand, we decided to step up and do our part. During this process, our government implemented an economic support package, but as a sector we also need to stand in solidarity. As a global brand born in this land, to share the strength we have for this land, we have mobilized all our resources so that ‘the looms don’t stop.’”
“IT WILL BE PAID WITHIN A MONTH”
İhsan Ateş explained their decision as follows: “The stopping of looms in the supply sector will have a chain effect and negatively affect the textile sector, which provides employment for 1 million people and is a livelihood for 4 million people. At this point, as DeFacto, we decided to make the payment for the spring-summer collection we ordered within one month. In other words, we will pay 400 million TL for the 19 million products we had produced. We also decided to place an order worth 500 million TL for the winter collection. Thus, by the end of this month we will have provided 900 million TL in resources to more than 500 suppliers. This amount will help them both catch their breath and plan for the future, serving as a lifeline in a way.”
“WE ARE INSEPARABLE”
Ateş said, ‘The pandemic will end and people will go out again. We must all be prepared together for that period’: “The most important strategic issue for achieving our future goals is the sustainability of our suppliers. Demand is declining and production is falling, but our production looms need to keep running. At this point, keeping 900 million TL in the bank and staying liquid may seem more correct to financiers, but a supplier and a brand are inseparable. It is impossible for one to survive without the other. We retailers will run campaigns to bring shopping back to its former level. As shopping returns to normal levels, our manufacturers will also return to their former capacities.”
“WE ARE ALSO A GLOBAL COMPANY, AND WE DID NOT CANCEL PRODUCED AND CUT PRODUCTS”
DeFacto, which has reached more than 500 stores in 30 countries and 14 thousand employees, also did not cancel the products it had produced and cut at its suppliers abroad. DeFacto CEO Ateş said, “We currently have more than 500 stores in 30 countries, including, together with Türkiye, Oman, TRNC, Azerbaijan, Tajikistan, Jordan, Tunisia, Bosnia and Herzegovina, Moldova, Palestine, Lebanon, Kyrgyzstan, Afghanistan, Algeria, Armenia, Dagestan, Kazakhstan, Morocco, Iraq, Egypt, Belarus, Russia, Georgia, Albania, Kosovo, Serbia, Pakistan, Malaysia, Ukraine, and Romania. At this point, some of our production takes place abroad. However, during this period we did not cancel cut products for either domestic or overseas production by using the Covid-19 pandemic as an excuse.”
‘WHITE SUPPORT’ CONTINUES, MASK DELIVERY HAS BEGUN
DeFacto also provided 1 million masks in support of the “We Are Enough for Ourselves, My Türkiye” campaign. DeFacto has begun delivering 1 million antibacterial masks, produced in accordance with international standards, free of charge to the Ministry of Health. The masks will be distributed to citizens aged 20-65 under the coordination of the Ministry of Health and the Ministry of Transport and Infrastructure. DeFacto is also continuing to distribute clothing sets to hospitals to meet the daily needs of healthcare workers. In this context, 3 thousand products have been sent to hospitals in Istanbul so far. Product sets are delivered every day to more than 500 healthcare workers across Istanbul. DeFacto CEO İhsan Ateş connected live to the Focus program hosted by Güzem Yılmaz Ertem on Bloomberg HT and answered questions on current affairs.
“WE AIM TO BE A ROLE MODEL FOR GLOBAL BRANDS”
Saying that with stores closing all over the world, global brands and local brands have stopped purchasing products, Ateş said, “Because of the uncertainty, suppliers and manufacturers are now in a very difficult position. They expect a solution from companies. They expect them to clarify when and under what conditions they will buy these products. They will pay their suppliers and their employees’ salaries with the payments they receive. Some global brands say they will buy these products but offer to do so with high discounts, and some say they will not buy them at all and that you should find a solution yourselves or that they will buy next year; we see many proposals like these that do not befit the stance of global brands. There is a serious air of panic among global brands and retailers.”
İhsan Ateş continued his remarks: “As DeFacto, we told our suppliers, let us buy from you approximately 19 million products worth 400 million TL. For this, we rented an extra warehouse. Perhaps we will sell them next year, because we do not know exactly how the course of retail will unfold. Therefore, within a month there will be a cash inflow of around 400 million TL into the market. The looms need to run and production needs to start. Capacities have fallen to as low as 10 percent. As of May, we will place an order worth 500 million TL for the coming winter. In total, we aim to revive the market with an input of 900 million TL and to be a role model for global brands.” he said.
