East European fashion labels aim for the world stage

Thu Sep 6, 2012 2:07pm EDT
 
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By Marton Dunai and Dagmara Leszkowicz

BUDAPEST/WARSAW (Reuters) - The winding flower embroidery of the Matyo folk is a living traditional art form in the tiny Hungarian village of Tard, where Rozi Vaczi spent time as a child.

When Vaczi had a T-shirt decorated with the embroidery two years ago for her boyfriend Ervin Nagy, a well-known Hungarian actor, it sparked intense interest in her company, Matyo Design. Urban hipsters now readily fork out $45 for a Matyo T-shirt.

After opening a showroom in Budapest earlier this year, Vaczi now hopes to build a fashion design business on the ruins of Hungary's communist-era textile factories.

"We'd like to create a company that sells internationally," said Vaczi, earning a global "place in fashion design" in a first for a Hungarian firm.

Around emerging Europe, where garment assembly for Western brands has been a thriving business for years, there is a new confidence that local designs also have a chance on the world stage.

With wages still low compared to other regions, including Asia where costs have ballooned, retailers are moving business back to eastern Europe, meaning a big influx of orders and a new investment in infrastructure, fashion company executives said.

Local manufacturers are also helped by the potential for expansion in domestic markets such as Poland and Russia which, though huge, are a lot less saturated than in the West.

"I think that clothing companies from (central Europe) have big growth potential," said Kamil Szlaga, a retail analyst at KBC Securities in Warsaw. "The region still has room to catch up with western Europe... Surely, Russia is their key target."   Continued...

 
Fashion designer Bori Vaczi, co-creator of local label Matyo Design, presents the traditional clothes of the Matyo people in the village of Tard, 148 km (92 miles) east of Budapest, May 30, 2012. Around emerging Europe, where garment assembly for Western brands has been a thriving business for years, there is a new confidence that local designs also have a chance on the world stage. With wages still low compared to other regions, including Asia where costs have ballooned, retailers are moving business back to eastern Europe, meaning a big influx of orders and a new investment in infrastructure, fashion company executives said. Local manufacturers are also helped by the potential for expansion in domestic markets such as Poland and Russia which, though huge, are a lot less saturated than in the West. Picture taken May 30, 2012. REUTERS/Bernadett Szabo