From its extremely humble beginnings with just six sewing machines in 1983, Eroglu Holding has consistently increased its production output, expanded its distribution network and developed its own brands. Furthermore, the company has diversified its interests into construction and real estate, starting off by building its own facilities before moving into shopping centre and office construction projects. Today, the group produces over 20 million pieces of clothing annually, employs 6,500 people worldwide and sells its products through 3,000 retail points.

Ms Özkalkanli explains how Eroglu has developed over the last 26 years: “Eroglu Holding was founded in 1983 by five brothers, under the leadership of the then and current board chairman, Nurettin Eroglu. They did not have any kind of experience in the textiles industry, I think they simply saw an opportunity to buy these sewing machines and start up their own business. So, Eroglu Clothing was established in Kumkapi, a district of Istanbul, in a 150 square metre workshop with a team of 15 people, and soon began coat and duffle coat production.

“The Kulis brand was created in 1986, with the initiation of jeans and shirt manufacturing, and the company opened a sales store in Mercan. In 1992, the company relocated to a 10,000 square metre building in Avcilar, with the production of 5,000 units per day. During this period, production departments like washing, buttonholing, ironing and packaging were specialised; marketing, export and finance departments were restructured; and the Kulis brand was renamed Colin’s Jeans. Daily production reached 10,000 units in 1994 and export to many Eastern European countries, with a special emphasis on the Russian market, was initiated.”

Constant growth

The strength of the Colin’s brand led to the establishment of Colin’s Clothing Industry in 1995: daily production was increased to 18,000 units and marketing activities were organised for the thriving brand. Ms Özkalkanli continues the story: “The first Colin’s store was opened in Moscow in 1995 and a company was established for monitoring and managing the Russian operation. Then, in 1997, Eroglu underwent a restructuring period, whereby the Loft brand was added to the range and Ers Knitting Industry was formed for jersey-wear production. In the same year, the construction company was founded, which began its activities by serving the needs of the group. We needed new buildings so we decided to form a company to construct them ourselves, and the company grew from there: it has now built several shopping malls in Turkey and has some major upcoming projects.

“In 1999, the company started to manufacture clothing for very well-known brands like Calvin Klein, Gap, Next and Tommy Hilfiger, in addition to its own brands. A period of very rapid growth was experienced in 2003, in which the factory in Çorlu was turned into the most developed sportswear production facility in the world, we continued to open stores in Russia and marketing activities were undertaken in Europe and the USA. The Aksaray production facility was opened in 2004 and, in 2007, Eroglu Egypt was founded, which has a current capacity of 10,000 units per day and more than 2,000 personnel.”

A family affair

As it has grown and expanded its operations, Eroglu Holding has maintained the same structure which emerged as each division was created. Ms Özkalkanli explains further: “Each division within the holding company is run by one of the brothers who set up the company: one is in charge of denim garment production, both in Egypt and in Turkey; another is in charge of jersey-wear production; two brothers take care of our brands, with one of them focusing on the design side and the other managing sales in the outside market; and the fifth brother, Nurettin, is the chairman of the board.

“The group has overcome the problem of many family-owned companies, in which the family dominates and determines every activity, and turned this into an advantage. Although we retain the spirit of a family company, our policy is one of continuous development using every method at our disposal, and we see training programmes as the key to maintaining the advantages of family orientation. The family members provide a strong management foundation: they are totally dedicated to their work, they are very open-minded and they possess excellent leadership skills.”

In the textiles business, Eroglu has three production companies, of which the denim garments business is the most active. The group’s facilities are highly modern and extremely well organised, as Ms Özkalkanli affirms: “The clothing business is made up of a group of facilities in Avcilar, Çorlu and Aksaray. The facility in Çorlu, which is about an hour from Istanbul, covers an area of 45,000 square metres and is fully integrated to perform cutting, sewing, washing and packing. Aksaray is in the centre of Anatolia, which is where the brothers were born and grew up, so this is why they were keen to invest in the area and to increase employment opportunities. We have a large sewing factory there for denim, which we founded to provide a better service for our customers and to be more competitive. The third site, in Avcilar, is involved in some jersey-wear activity, but has recently been changed to become more of a buying and organisational office, where we acquire orders, make designs and subcontract.

“Our newest facility is the factory in Egypt, which was established in August 2007. The factory is located in the Isma’iliyah Free Zone, which is between Port Said and Cairo, and currently produces about 300,000 units per month. Finally, the headquarters for each production site is in Istanbul – product development, merchandising, planning and buying are all done here, even for the facility in Egypt,” she adds.

A specialist denim designer

Eroglu’s product range includes clothing for men, women and children, and offers a wide variety of qualities and prices, as Ms Özkalkanli affirms: “Thanks to our new facility in Egypt, our range of products has been widened significantly. When we began investing there, the main driving idea behind the project was to be able to offer the customer a wider choice of products at a wider selection of prices. In Turkey, our capabilities and know-how are very high, so we are able to make premium garments with special features – washing treatments are very important for denim garments, so we are specialised in that respect. In Egypt, although our capabilities are increasing every day, thanks to the team which relocated there from Turkey, we are able to offer customers a more moderate level of price, due to overhead costs being much lower. So, we are now able to provide core items, as well as premium products for high street retailers.”

One of the biggest successes which Eroglu has experienced is its foray into the Russian market through the Colin’s brand. The group has made significant investments in Russia, which have certainly paid off. “Colin’s has achieved the position of the number one brand for denim in Russia,” enthuses Ms Özkalkanli, “so it is very well-known there. Colin’s has received many awards in Russia and our efforts have been focused on harmonising Russian personnel with the key management that we brought in from Turkey. The Colin’s brand has also seen success in Eastern European countries such as Ukraine, as well as in Western Europe and even in China, where we have had an office in operation since 2005.”

Ms Özkalkanli notes that one of the keys to Eroglu’s success lies in the strength of its design team, which does not miss a beat in the fast-moving fashion industry. “When it comes to designing the products, this is done in-house and we have separate design teams for each brand and for private labels. Eroglu has always had a very strong and dedicated design team which follows trends very closely – something which is obviously crucial in this business. We constantly prepare new collections according to the latest trends and we visit our customers around the world regularly in order to show them what is new and popular, because this is what they need and expect from us. We are definitely among the industry’s most customer-oriented companies, and I think this is our number one asset – we see customers as partners and we are always there to help.”

Checking for quality

“Quality is the first principle in each phase of production: planning, modelling, cutting, sewing, washing and packing,” Ms Özkalkanli reports. “An intensive effort is made to produce clothes which match international standards, and we run a pilot production for all orders above a certain quantity. We then adapt our patterns according to the results of this, and each quality control process consists of sample checks and feedback. Of course, health and safety issues are also taken into account at every stage of production, and are monitored by our social compliance team – noise measurements, lighting accuracy and air quality tests are run frequently. All necessary health and safety equipment is provided for our workers, and we are very keen on following those international standards that customers expect. Our factories are audited regularly by customers and internationally accredited companies, so it is vitally important that we apply these measures on a permanent basis.”

The Çorlu facility in particular, is a model technological centre inspired by the idea of sustainable development, and sets an example in the extent of its resources. “We actually produce our own electricity in Çorlu,” notes Ms Özkalkanli, “a process during which we are also able to produce vapours for product treatment. Our environmental policy is important to us and we are especially sensitive to matters of waste disposal, which is why we installed the most highly developed waste treatment technology in Europe as part of the Çorlu facility.”

Success starts with research and development

In addition to keeping up with the latest technologies relating to environmental management, Eroglu maintains close relationships with chemical suppliers and machine manufacturers all around the world, in order to make sure it is the first company to be aware of new methods and materials. “Production starts with R&D, because whatever you learn from R&D has to be applied to production. We have strong connections with our suppliers, particularly those in Italy, Germany and here in Turkey, and they are a very valuable source of know-how in the denim industry. We have been working with the same companies for some time now, so they always want to show us new things and allow us to test them in our R&D centre. For example, if there is a new machine for dry processing, they bring it to us and ask us to try it. We make some samples and, if we and our customers are pleased with the results, then we install the equipment. 

“When looking for new fabrics, our geographical scope is unlimited. We actually source a lot of fabric from Turkey because the quality is high and there is a huge range to choose from; but we also buy from China, Japan, Pakistan, India, Brazil and Europe. Essentially our R&D department, while it tests new equipment and materials, is more of a trend awareness team, which travels the world visiting fairs and events, follows trends online and stays in close contact with our customers. One activity that we run for customers is something we call Workshop Days. We arrange dates with customer and they let us know the products they are interested in; we then prepare some samples but we do not wash them. The customer comes to work with us in the R&D centre to develop the washes that they want, perhaps bringing their own ideas or photos, and they have the chance to make it themselves. It is a very interactive way of working, and at the end of the session they leave with the samples that they require.”

Improving and growing

Eroglu Holding, despite its growth year-on-year and enormous successes so far, has not escaped the effects of the recent economic downturn, and Ms Özkalkanli affirms that it has not been an easy year: “We have had to make many adjustments, particularly in our headquarters, production, merchandising and sampling departments, in order to optimise our operations and minimise costs. We have a budget which is strictly adhered to – every month we check to see if our costs are in line with the budget and if they are not, we take the appropriate action so that we reach our targets. We have also started to travel more frequently, given that many of our customers do not have a budget for that at the moment. Someone from the company is away visiting customers every two weeks, mainly those in the UK and Spain.

“Remaining close to our customers is a priority in these difficult times, and when they are looking for something new and different, we have to be there with innovative new designs – designs which are commercial and reasonably priced. Lowering prices is another change that we have had to make, which we have tried to compensate for by reducing our production overheads and bargaining with suppliers. Childrenswear is always the hardest sector in which to achieve target prices, a challenge which is exacerbated by currency issues as well as the economy, so it is becoming more and more difficult,” she adds.

Economic challenges aside, it is clear that Eroglu Holding is a stable, well-established company with a strong management team and products that are in high demand. The next few years are focused on further growth, as Ms Özkalkanli assures us: “The main aim for the short-term future is to keep production stable, but also to grow the business in Egypt. This is our biggest project at the moment, and we are planning to practically double production there over the next two years.”