The economic and political crises in Russia have led lingerie brands in Latvia to expand into European markets, including the UK. Sarah Blackman visited some of these brands to find out where they would fit into an already competitive customer base.
UK buyers, get ready; there’s a wave of lingerie brands preparing to export their garments from Latvia, and their products are set to meet your expectations for quality, fit and price.
For years, Latvian manufacturers have depended on post-Soviet states for trade, but growing concerns over Russia’s struggling economy have forced these companies to cut their losses and explore new markets.
The textile sector is the cornerstone of Latvian industry, contributing to 4.4% to the country’s GDP. And, an integral part of textile production in Latvia is lingerie manufacturing, especially in the seaside city of Liepaja, which alone hosts more than 50 manufacturers. In fact, France is the only other European country with a higher concentration of lingerie manufacturers.
Who knew that Latvia had such a deep-rooted history in lingerie production? The Lingerie Insight team certainly didn’t when we were invited to visit the country by the Investment and Development Agency of Latvia (LIAA), whose objective is to promote business development by facilitating foreign investment.
There, we discovered a market that has the potential to compete for China’s share of the lingerie pie, and intimate apparel brands that could one day stand alongside some of the most well-known brands in Western Europe.
Our trip began with a visit to Amoralle, a luxury brand that combines prêt à porter with lingerie. The company, based in the Latvian capital of Riga, develops all garments in house, from the initial concept, to the end product.
There was an air of excitement about the place as we toured the building’s workshops and, from speaking to Amoralle director, Polina Nazarova, we got the feeling that this healthy work environment would be shared among other brands we would visit during our trip.
“There are big roots for producing lingerie here. It’s kind of a landmark,” she told us. “Everyone has a passion for it and people feel that its part of their history.”
Amoralle launched as a legwear brand called Sockbox in 2008 and renamed in 2012, after it began to produce lingerie. And this month, it is set to make its debut at Salon International de la Lingerie alongside fellow Latvian brands Gracija-Rim, Vipa, Glora and Rosme.
At the moment, 60% to 70% of the brand’s customers are based in Latvia, but it hopes to reach new audiences by exporting to the UK, Italy, Germany and Arab countries.
“In the UK, Harrods is where we would like to be,” said Nazarova. “Initially, we wouldn’t want to have a big stand where we wouldn’t be personalised. That’s why boutiques work for us because they offer that personal touch.”
When asked why the UK is an attractive market for the brand, Nazarova explained: “I lived there for one year and women really know how to dress there. Combined with the economics of the country, both things click.”
Capital of lingerie
On day two, we travelled to Liepaja to meet with Lauma Fabrics; the company that is arguably responsible for the level of textile and lingerie know-how that exists in Latvia today.
The company was founded in 1971 by a group of engineers whose aim was to buy yarns and produce fabrics, laces, narrows and lingerie in one place. At that time, during the Soviet era, it was the only fabrics producer in existence and so it targeted customers in neighbouring countries such as Russia, Belarus, Lithuania and Ukraine.
By 1980, the company’s 100,000m2 factory was at its most active, with 5000 people churning out stock. But, as the company was owned by the Russian state of Moscow, it was restricted in how far it could grow. Back then, competition didn’t exist and demand was far higher than the company could produce.
“Moscow controlled everything,” Lauma Fabrics general director and member of the board Edijs Eglins told us, as we sat down in his office. “What we produced, how much we produced and where we had to deliver; a sales department didn’t exist.”
In 1991, Latvia became independent from Russia and three years later, the company was finally privatised.
“Slowly, the company started to change its thinking from Soviet times to a new way of thinking, launching a sales and marketing department and focusing on quality and efficiency to compete with competition in Europe,” said Eglins.
Lauma Fabrics realised that it didn’t need 5000 people to run a successful company and so many workers were made redundant. With that, several former employees set up their own small factories and within 10 years, more than 50 companies were set up to produce approximately 8 million bras per year.
“We can see that within each small company there are some old employees from Lauma. The biggest one is VOVA, which started as a small company and now they produce 1.5 million pieces per year,” said Eglins.
“This was really good for Lauma because it could then sell materials to these small companies.”
In 2005, Lauma was split into two companies; Lauma Fabrics and Lauma Lingerie. “We didn’t want to make lingerie and fabrics under one company because then we’d be competing with our customers,” Eglins explained.
Last year, Lauma Fabrics recorded around a €40 million turnover and, currently, the company works with about 530 people. The business now only uses 65% of its 100,000m2 building, but the rest of the space is rented out to textile-related firms, including Lauma Lingerie.
Lauma’s biggest customer is Milavitsa, a 100-year old brand based in Belarus. “Despite all the difficulties in the Russian market, they still produce 16 to 17 million pieces,” says Eglins.
Lauma also produces fabrics for big European names such as Triumph, Chantelle, Van de Velde, Wacoal Eveden – now known as Wacoal Europe – and Naturana. And its European market share is slowly increasing, thanks to the acquisition of a 60 year-old elastics producer in Germany in September 2014.
“It’s much easier to step into a European business if you have a presence there,” explained Eglins.
Lauma Fabrics has also recently invested €7 million into updating its dye house with new machines.
“We see that to work with big names in Europe, you need a very competitive dye house because standards are very high and the colours are changing all the time. Black, white and nude garments used to make up 70% of the market, now they make up 30%,” added Eglins.
But the dye house isn’t only expected to benefit European brands; the small lingerie labels in Latvia, which make up 15% to 20% of Lauma Fabrics’ business, according to Eglins, also stand to reap the rewards.
Many of these Latvian brands, like Amoralle, are seeking to gain European customers and so keeping up with the trends will be vital.
The Russian market is still very important to the Latvian textile industry, insisted Eglins: “We want to keep what we have – we don’t want to destroy anything. We are not happy with the sanctions between Europe and Russia, but due to these difficulties we are forced to develop into new countries and reduce risk.
“I believe that small companies in Liepaja will start to work with customers in Europe. Fifteen years ago, everything they produced was sold to Russia, but now they are attracting European business.”
Targeting Europe and competing with China
So how can Latvian brands attract European buyers? “It isn’t easy, but we are in the European Union, so deliveries to Europe are shorter and faster – faster than they would be from the Far East,” explained Eglins.
Indeed, and Latvian companies also have a competitive advantage over certain Chinese manufacturers in terms of the fit and quality of bras they produce.
“Due to the fact that China takes away the 75p segment, which is easy to produce, our customers are forced to produce bigger sizes, which are much more complicated to develop,” added Eglins.
“To produce bigger sizes, you need fabrics with more durability, more functional narrows, laces with more power and fitting is not so easy.”
VOVA is one brand that designs fashionable and classical lingerie and swimwear up to a G cup, including its Snejana bra made with three-piece cups and a diagonal seam. This is one of the most exported bras in the region, according to VOVA development director Ints Hamanis.
“Every bra size has a different construction. We have a fitting competence that many lingerie companies don’t have. A lot of companies have tried to copy the Snejana bra because it’s easy to sell and looks good on everybody,” he said.
VOVA has been growing rapidly in the last three years thanks to a recent rebrand and the development of new catalogues that target the European market.
“Our strategy is to have the best product with the best quality, but also with a good price. We know you have a low-end and a high-end market in the UK. We sit in the middle,” said Hamanis.
“Eighty percent of our products are going to Russia, so it’s important to diversify. We don’t want to be under the influence of the market.”
Another brand interested in targeting the European market is Orhideja, which is also based in Liepaja.
“We are working on coming up with a new name that European buyers can relate to and we hope to be in the UK in about six month’s time,” Orhideja project manager Andrey Prijma told Lingerie Insight.
“Russia is our main market, with 75% of our products exported there, but we are ready to expand. We are grown up, our factory is up to date and everything is European standard,” he explained.
Established in 1993, Orhideja produces shapewear and lingerie up to a G cup, and three years ago, it launched a swimwear line. It also develops private label lines for brands such as Myla and Amoralia.
Lingerie Insight’s Latvian excursion concluded with a final visit to Riga, where we met with Rosme. The history of this brand dates back to 1952, when employees produced lingerie from Monday to Saturday and, astonishingly, helped to build Rosme’s factory, which is still standing today, every Sunday.
The brand came under control of the Russian government during the Soviet era but was bought by Swedish company, Swegmark Invest, in 1993.
Investments in state-of-the art machinery at that time made it possible for Rosme produce 15 fashion collections per season. The label also produces nightwear, swimwear, maternity lingerie, shapewear and sportswear.
“We are well known for our patterns. We have special patterns for the smallest sizes and there is another group, which is best fitted for medium sizes, and then there is a group for the larger sizes,” remarked Rosme product development division manager, Anta Pra??vi?a.
“We are very proud of our patterns because they fit women’s bodies beautifully. A woman’s comfort is the most important factor, but it’s functional only if it’s beautiful and it’s beautiful only if it’s functional.”
“We were the first company to introduce the one-piece bra in this region around 10 years ago. This is still very successful and we are just looking at how to expand it more and improve it with new technologies,” added Pra??vi?a.
In 2010, Rosme opened its own retail chain – it now has 15 shops in Latvia – and since then Rosme has started to expand into other countries.
“We changed direction; we started to develop our own store chain and expanded into other republic states and the West. Up till then we were mainly exporting to Russia,” said Pra??vi?a.
“It is amazing how excited women are when they find out that one of our stores is opening in their local era. They have heard about it, they have known about it for years and now it is available to them.”
“It is such a satisfying feeling when women come in to store and they say ‘wow, this quality, this design – and I can afford it’.”
To find out more about the Latvian lingerie industry, business opportunities or to express your interest to join the British lingerie tour in May 2015, please contact the Investment and Development Agency of Latvia office in London.