Outsourcing, a solution induced by the lack of financing for the economic operators in the clothing industry, turns out to be an extremely profitable business, particularly for those that have managed to build business contacts with the multinationals in this field and offer products up to their quality standards. This is the story of the Romanian-Swedish venture Sorste based in Focsani, which posted $30 million turnover in 2002, twice the 2001 turnover. The company also logged 120bn ROL ($3.6 million) net profit in 2002.
Sorste is one of the largest companies operating on the Romanian clothing market, with its entire output shipped to clients such as Marks & Spencer, H&M, Levi Strauss, Max Mara or the Kenzo and Lacroix fashion houses.
"Our clients' requirements have changed lately. They no longer want "parts" of the product, but the finished product. Therefore we sold more finished products. Our most difficult clients are the fashion houses, as they are very demanding," Stefan Sobota, general manager of the company and the Swedish party of the venture said.
The company's product portfolio includes men's suits - 25%, women's clothing - 50% and jeans - 25%. Sorste estimates to increase production to 5 million units this year, from the four million in 2002. "We are planning to increase the production of jeans for Levi Strauss, as we are one of its most important suppliers in the world, as well as the production of men's suits," Sobota said.
Established by two partners, Stefan Sobota and Sorina Placinta, in 1996, the company had taken up more than $25 million until last year. The investments were made with the company's own cash, and aimed at equipment mainly.
"Sorste now comprises 65,000 sqm of land, the factory, the equipment, the Fashion Center Hotel and the Medicover Clinic. The investment plans for this year include buying new equipment to increase the jeans production, building a gym and a swimming pool for the hotel. All these are estimated to cost some $5 million," Sobota says.
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