Iran’s garment industry and exports to Europe

Exclusive interview with Akbar Rezaian

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If they tell you that one day clothes would be exported from Iran to Europe, or that Turkish businessmen regretted the credibility of Iranian businessmen; Can you believe it?! A part of the history of the garment industry in Iran is so brilliant that it seems incomprehensible compared to the current situation. This period is from the mid-50s to the early 70s. An era that maybe few people know about and we don’t even believe that these achievements in the field of clothing belong to Iranian artisans. Mr. Akbar Rezaian is one of these influential industrialists who even in the middle of the war caused the growth of Iran’s clothing exports to Europe. In the interview we had with him, we got information about Iran’s garment industry and active people in this field during the second Pahlavi period. We also inquired about the conditions of this industry after the 1957 revolution, which we will share with you along with their experiences in the rest of this article.

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The start of activities related to the field of clothing industry before the revolution

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“A few years after graduating in the field of social sciences from the University of Tehran, together with Mr. Mehdi Tolaei, we entered the field of selling sewing machines and in addition to selling “Mary Flower” sewing machines, we established “Suban Iran” and represented the brand. We got Janome from Japan.

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His next step in the garment industry before the Islamic Revolution of Iran was to import industrial sewing machines. Therefore, they established “Adler Iran” company and took over Adler’s agency. Adler is a well-known German brand that operates in the field of sewing equipment, including all types of sewing for clothes, sofas, curtains, shoes, etc. This step made Mr. Rezaian more familiar with the field of clothing.

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He said about the extent of his company’s educational and research organization: “We used to do the project writing of the factory setup for the clients; Because the technical issue was an important issue. An industrialist must have a complete understanding of the production process in order to build a factory and increase production circulation. That’s why we take our customers to Germany to get to know the process of their similar collections closely.”

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Garment industry on the second side

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According to Mr. Rezaian, during the years 1345 to 1355, the industrialists in Iran did things that the Turkish industry had not even dreamed of. Literate capitalists had a research team and knew that the growing garment product is profitable for export in every way. Due to this potential, the field of clothing attracted the attention of Iranian capitalists and many activists invested in the clothing and textile industry.

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for example Lajurdi family They started their activity in textile and became known as the largest industrial group during Pahlavi II. “Iran Jika”, “Jinmed” and “Behpoosh” factories belonged to the Lajordi family. Other well-known capitalists who entered the garment industry before the Islamic Revolution; It can be called the company. The company has, they represented 16 prestigious companies in the world such as Seiko, Japan Toshiba, General Electrics, Germany Dual, Italy Olivetti, etc. They established the “Poshsh” factory in Rasht, which had five hundred thousand square meters. Khayami brothers Also, their main field of activity was the automobile industry (Iran Khodro and Iran National); They established “Jamco” factory. also Herandi familyone of the famous pistachio exporters in Iran, set up the “Barak” factory in Rasht.
After the revolution, all these factories were confiscated under the headings B and C and came under the authority of the National Industries Organization and the Mustafafan Foundation.

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Activity in the field of clothing after the Islamic revolution

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“After the revolution and the changes that took place, the working conditions in Iran became difficult and complicated, but I refused to give up on my goals; Therefore, I established a factory with the aim of exporting and launched “Jamgan Company” in February 1360.
He, through his influence and the advisors he had; chose Germany as the target market. At the beginning of this path, he got guidance from the brand manager “Zayden Stiker”. Zeiden Stecker was the largest shirt supplier and manufacturer in Germany, which had about 17 shirt brands and produced and exported about 90,000 men’s shirts in Germany every day. With constant advice and efforts, the Jamgan factory was established, and after that they produced clothes for various brands in the C&A store chain in Germany.

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Garment export at the height of the Iran-Iraq war

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“Mr. Heine came to Iran on behalf of Zule & Zulka company to visit our factory and he was surprised by all the machines and technology we had for production in Iran. This matter made them agree with us regardless of the war conditions and we produce 4 thousand shirts for them daily.
In the midst of the war with Iraq, there was a lot of antiquities smuggling from Iran, that’s why the process of clearing goods and gaining the trust of the customs has been very difficult. “To solve this problem, our products were packed in polyethylene bags that are small and visible and do not cause any disruption in the speed of sending orders.”

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In addition to this order and transparency, in order to speed up the transfer of products from Iran, orders were sent directly to the address of the stores in Germany, not to the address of the ordering company!

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Iranian clothing branding in the German market

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“After reaching the standard quality of the German market, we established Rezaian Import Export with a very experienced sales manager. After that, in cooperation with an Italian designer, we launched the TOKTOK clothing brand in Germany in 1986. Our sales manager launched the first tuk tuk collection in the German market together with a number of expert marketers.

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In those years, despite brands like ZARA, fast fashion had not yet entered the German market; Therefore, the products were often presented to boutiques at exhibitions and men’s fashion week in Cologne. Proper knowledge of the market was very important for product presentation so that as a result, the boutique owners could sell the products well. This issue was very effective not only in sales but also in introducing the brand in Germany; Because in Germany, there was a research institute called “Market Intern” that did research work after each season. The result of this research was based on eight elements, such as: the extent of monitoring the market by the brand, the profitability of the brand for the boutiques, the reaction of the brand to failures, etc., and was sold to the boutique owners in the form of a report. About 100 brands participated in the clothing market of this country, and this group only conducted research on the top 29 brands in this list. In line with the importance of this issue, Mr. Rezaian said: “It was very important to be able to get to those 29 brands first; Then show a good performance according to those eight factors. Of course, we gradually reached the top of this table and one year we won the first place of the most profitable brand for boutiques.

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The vitality of the Iranian brand in the competitive European market

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In order to compete in the European market, important factors must be taken into consideration and in order to ensure the survival of the brand in the European market by observing them. Factors like Quality And Knowing the needs of the target market are from this category.
“In spite of the German and Italian designers, we were getting assignments from our sales manager, Mr. Rubel; Because he had a very good understanding of the market and the needs of our audience. He came to Iran twice a year for these two collections and closed the factory for 10 days to prepare the production line for the new collection. Each collection included 120 to 130 articles. We had to ensure the final quality of these clothes; So that each article can be produced in accordance with the orders and standard quality we want. Nevertheless, the control unit had full authority; It was very strict and rejected up to 22% of the products. For this reason, I founded a company in Moscow called “Caspian” and I used to sell these 22% products in Moscow, and because the products were quite trendy, they were quickly sold in Russia.

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Communication and its effect in introducing to the global market

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Media is always a powerful tool; A tool that sometimes becomes a way to escape from the intrigues of competitors in the narrowness of the business world.
When Tuk Tuk was recognized in the German market; His competitors tried to prevent him from entering the hall number 3 of Cologne Men’s Fashion Week. A hall where only well-known European brands were present and the introduction of tuk-tuk in this hall was very important.
“We finally managed to find a way to enter hall number 3 with the high quality of our products; But competitors were trying to change our hall. For example, they wanted to prepare a sign for us to show that we are Iranians. Until then, many of our customers did not know that Tuk Tuk products are produced in Iran. Mr. Rubel, our sales manager, was also a journalist. He prepared an interview with the prestigious German sportswear magazine and determined the title of the article himself; “Mullahs make fashion for Germany!” The effect of this interview was extremely good for our audience.
under the pretext that Iranians cannot produce fashion products; Competitors still wanted to change the Tuk Tuk showroom. At this time, the support of the then government of Iran opened the doors of hall number 3 to tuk-tuk. Mr. Rezaian further said: “Mr. Hashemitaba (the then head of the Development and Export Center) sent a letter to the organizer of the German International Exhibition with the content that the Tuk Tuk brand is as valuable to us as Mercedes Benz to you. If for any reason the presence of this brand is prevented in hall number three; We will not allow Germany to attend Iran’s exhibitions. This letter was very effective and since that day, our conditions in the German market have been stabilized and our activities have expanded due to the quality level of our products. Even after that incident, we were involved in shirt fashion in Germany.”

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Warning before failure!

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“One day, one of the professors of the London School of Economics (LSE) called our company and said a shocking sentence to me: You will fail 100%!”

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Professors of the London School of Economics had noticed the progress of Tuk-tuk in the German market through marketing research. According to previous studies and the similarity of the development process of Tuk Tuk with a failed Indian brand, they predicted failure for Mr. Rezaian. “They told me: You are companies that produce in the third world and sell in the first world. Your organization and personnel are not familiar with the tastes and subtleties of the first world, and you don’t have a proper management system for this. They even defined a project worth three million marks for me to take over the management of the company in Germany and Iran. At that time, I had an undue bias in trying to localize everything and refused to change the management system. Although this fee was not a heavy amount for me at that time, I did not accept it, but later I regretted this decision thousands of times.

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Due to the large number of customers (about 700 boutiques) and the quality standard of its products, Tuk Tuk is having trouble re-delivering orders. On the other hand, due to the disturbances, it was only able to respond to fifty percent of the customers’ market capacity. At that time, publications that estimated the sales of brands according to their target market; They predicted the sale of Tuk Tuk brand up to 80 million Deutsche Mark. Tuk-tuk sales were much less than this amount. Mr. Rezaian considers the reason for this inability to be the lack of an expert manager in their system and the lack of experience and cooperation of the country at that time.

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What happened to the great Tuk Tuk brand?!

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“In addition to our own mismanagement and the inexperience of the country at that time as the background of failure, the government’s decisions regarding the export exchange rate in 2014 also disturbed the financial balance of our company. In those years when Iran was facing inflation; To curb it, they reduced the exchange rate once by 300 tomans. This was when we had a large amount of material delivered to the customer or in production, none of which we had yet received payment for. With this decision of the central bank, our company suffered a loss of one billion two hundred thousand tomans in just one night, which was a very heavy shock for us.”

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Mr. Rezaian continued his activities after this wrong decision and despite the heavy financial pressure. Even in 9 months of their last year of activity, they exported eight million dollars and they did their best to maintain this collection. After that, there were talks by government officials to compensate the exporters, but nothing happened in practice. Two years after this decision and with the wrong remarks of the ministers, unfortunately, his collection stopped its work.

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A final word of advice

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“I am generally optimistic. If I wasn’t there, I wouldn’t have started such activities during those war days; But I never ignore reality. I still believe that the way out of the current situation for the garment industry in Iran is to export. But this happens when the government stands behind the artisans, not against them! Iran has lost its export share in the world market due to the wrong decisions of the statesmen. We must make them realize their mistakes. This global market is profitable for Iran in every way. Today, with all the problems, retail is ahead of our industry, which is very valuable; But the design, retail and industry sectors must prepare themselves for the global market.
The day when the doors of the world market will be opened for us is not far away. be ready!

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