Lebanese fashion sector ready for the runway, but lacks access to financial market
Huwaida, daughter of Lebanese diva Sabah, poses next to her mother's dress upon arriving for the Beirut International Awards Festivals (BIAF) on June 12, 2015, at Zaitunay Bay in Beirut. (AFP/Anwar Amro)
Lebanon’s fashion industry benefits from the local quality of life and availability of human capital but remains hamstrung by a lack of market accessibility, weak professional support and limited access to finance, a survey has shown.
The survey, conducted by Endeavor Lebanon, covered 57 local fashion and accessories designers for women, as well as five experts from the fashion industry. It only covered companies whose founders are the designers themselves.
Also, 30 percent of surveyed participants specialized in ready-to-wear items, 25 percent in both couture and ready-to-wear garments and 11 percent in couture only, while 34 percent specialized in accessories.
Endeavor noted the lack of official statistics on the number of fashion houses in Lebanon and on the market’s size.
The survey indicated that Lebanon’s reputation as a fashion hub encouraged several Lebanese designers to set up their companies in the country.
It also noted that many designers view the small size of the local market as a positive factor, given that it facilitates contacts with suppliers.
In addition, fashion designers said that the availability of contacts in Lebanon through word-of-mouth and a strong social network constitute advantages for establishing their businesses in the country, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group.
Overall, 70 percent of fashion designers believe that the local culture provides a favorable environment for their business.
Further, the survey pointed out that the perception of fashion designers about the availability of human capital in Lebanon varies across subsectors.
It noted that most accessories and couture designers said that talent is available in Lebanon.
In contrast, only 38 percent of designers in ready-to-wear items believe that talent is available in the country, given that the majority of workers are not trained to manufacture this type of garments.
Also, 17 percent of surveyed participants had a degree in architecture, interior design or graphic design, but later pursued a career in fashion design.
In parallel, the survey indicated that fashion designers face challenges with their supply chain and with their access to customers locally and abroad.
It said that most fashion designers get fabrics from local suppliers, but they consider that they do not have a wide choice and that the merchandise is overpriced.
Also, it noted that designers who outsource their production to craftsmen, ateliers or clothing factories face several challenges that include failure to deliver orders on time, inconsistent quality, lack of transparency in terms of pricing and theft of ideas through design copying.
The survey showed that about 60 percent of participants indicated that the production costs in Lebanon are high, which is leading to high retail prices.
Further, designers who specialize in ready-to-wear garments said that they have difficulties accessing Lebanese boutiques, given that boutiques are often reluctant to offer Lebanese designs.
In addition, designers indicated that their most important market is the Gulf Cooperation Council economies, but added that they have a presence in other markets as well.
As such, 32 percent of designers are present in GCC countries, 25 percent in Europe, 15 percent in Asia, 13 percent in the United States, 11 percent in Russia and 6 percent each in North Africa and South America.
Also, 34 percent of designers have a presence online, but most of them said that online sales have not yet picked up in the region.
The survey indicated that regulatory issues deter access to foreign markets, including inadequate customs regulations.
In addition, more than 75 percent of designers noted the limited availability of professional support. Also, 50 percent of designers consider that their type of business lacks proper access to finance, while 17 percent of designers consider that access to finance is available.
The survey revealed that most designers have relied on their personal or their family funds to finance their fashion business, and that they have decided to grow their business organically.
It noted that 7 percent of designers benefited from a subsidized loan from the Kafalat corporation, while most designers said they did not qualify for such a loan but had access to personal loans from their banks. It added that only one designer received an investment from a professional firm and three companies had investments from angel investors.
Further, the survey showed that 33 percent of designers had between one and five employees relative to 31 percent who had no employees at all.
Also, 18 percent of designers had between 6 and 10 employees, 10 percent had between 11 and 20 employees, 3 percent had between 21 and 50 employees and 5 percent had more than 50 employees.
In addition, 66 percent of designers established their business between 2008 and 2013, 27 percent formed their company between 2000 and 2007, and 7 percent established their firm before the year 2000.
Endeavor Lebanon, which is part of the international nonprofit organization Endeavor Global, identifies and supports promising entrepreneurs and firms in Lebanon.
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