Textile ready-made clothing centers in Istanbul, which were directly affected by the Russia-Ukraine and Israel-Palestine wars, negatively affected the trade activities from regions such as Laleli, Merter and Osmanbey. Shop closures began in regions where sales fallen dramatically by nearly 70 percent.
While there is an increase in the number of stores closed due to high inflation and increasing costs, as well as the astronomical increase in rents, in line with this reality, many companies are dividing large square meter stores into smaller shops. While emphasizing on the trade activities in other textile and apparel centers, especially around Laleli showing a decrease around 50 to 60 percent, Laleli Industrialists' and Businessmen's Association (LASİAD) President Gıyasettin Eyyüpkoca noted that business closures have started in Laleli due to rents and heavy expense items.
In addition, Eyyüpkoca said that when the inflation environment in the country, energy costs and labor costs are added, those doing business in the region have difficulty in surviving, and said, "Due to the huge downward trend in businesses, the tradesmen in the region can no longer manage their shop rents. So, the natural consequence of this is closures. This is not the case only for Laleli but also a reality in Merter, Osmanbey and Bayrampaşa."
Russian Market Shrinks
The adverse impact of the Ukrainian-Russian war started to release its negative effects around Laleli which known as the suitcase trade center to Russia especially in leather garments for a long time. LASİAD President Eyyüpkoca emphasized on the critical reduction in scheduled retail sales as well since the conflict continuing to reveal its effects and said, “There is a noticeable decrease in per capita expenditures in the world. Unfortunately, this decline is greater in Russia. The fact that we cannot make an assumption on the ceasefire, this uncertainty also have an impact on the conditions. Also, very significant issues are on stage regarding ongoing flights to Russia in spesifics due to the embargo. As known, everyone who wishes to connect to the world from Russia travels via Turkey. Therefore, there are scheduled flight problems with the planes arising from this reality."
Israel's Aggressive Attitude Affects on Regional Trade
Eyyüpkoca said that when all of these problems were combined with the global recession, the impact of the economic crisis started to reveal its effects much more severely and said, “We had experienced an aircraft crisis with Russia before, but this only caused a slowdown in trade for that country. However, today, that is not the case." While stating that the crisis started in all export regions along with Russia, Eyyüpkoca said, “In our region, the Iranian, Libyan and Lebanese markets are experiencing anxiety. The fact that Israel is conducting an uncontrollable action, this causes a pressure on the Gulf countries. All concerns and worries remain in the region. Due to the impact of the Russian War, the Polish, Romanian and Moldova markets are negatively affected. As an implication of all these, there is a visible and perceptible crisis apparent in trade. When all of these come together, it becomes quite usual for them to close down their businesses in Laleli and in other regions."
Small-Scale Production Facilities Beginning to Close
Closures have also begun in the workshops operating in the textile and apparel industry in the region. Industry representatives state that the rate of closures in workshops is around 20 percent, and that companies employing a large number of workers are downsizing by laying off workers. It is further stated that some manufacturers have started to move their production to distant places outside of Istanbul.
Suitcase Trade Decreased by 50%
While pointing out that there has been a decrease of nearly 20 percent in Turkey's apparel exports, Eyyüpkoca noted that there has also been a decrease of around 60 percent in trade from these regions with passengers. While commenting on the increase in tonnage in the official export data to Russia as an insufficient rate, Eyyüpkoca said, “In a period when the country is in crisis and the whole world is experiencing a halt, this increase is not very momentous. If there was an increase of up to thousands of percent for Russia, then there would be business. While only the share of Russia and Ukraine in Laleli's exports was around 70 percent, today this figure to have dropped to nearly 40 percent. The 46.8 percent decrease in Turkey-wide suitcase trade based on 10 month data is noteworthy. Suitcase trade between 2023 January-October was recorded as 2.1 billion dollars.
