EXPAT CAPITAL

EXPAT CAPITAL

We are aggressive in terms of not missing opportunities

Cem Boyner told Capital about recent developments in the retail sector, how the group was responding to these developments and how they were preparing for 2012

Boyner Holding is preparing to complete a year of growth, which has been filled with innovations, and predicts further growth of 6-7 percent in 2012. Boyner Holding Board Chairman CEM BOYNER is optimistic about next year but also wary. He says that the measures they have taken have created a "very light structure" against both the global crisis and the risks facing Turkey. "We are extremely aggressive when it comes to ensuring that we don't miss any opportunity," he says. Cem Boyner told Capital about recent developments in the retail sector, how the group was responding to these developments and how they were preparing for 2012

Capital: What are the most important developments in the sector today?
- The most important change is that, in parallel to the role that Istanbul and Turkey have secured in the world, there has been a very significant increase in our sales to tourists as a proportion of our total sales. Our group's sales to foreigners stood at around 2 percent of the total in 2008 but have now risen to 7 percent. This figure is the result of Istanbul and Turkey becoming a very attractive tourist destination and we expect it to rise to 30 percent by 2014. Sales personnel working in our stores who can speak different languages have been added to our staff and we are under significant pressure to become a more international retailer. I think that this will be an important cushion against fluctuations in Turkey.

Capital: It has been said that retail prices have not risen for some time. What is the current situation?
- Since 2007 prices have not been rising. They have been falling. The most important factors behind this are the exchange rate remaining stable, the absence of any major fluctuations, the surplus in supply from China. Between 2007 and 2011 prices have really fallen not risen.

Capital: How much have they fallen?
- They have fallen by 4 percent each year. This is the first time this has happened in our sector in Turkey. Coming to 2011, there has recently been a major appreciation in foreign exchange. Cotton and wool prices have risen. And on top of this has come the customs levy on imports from the Far East. When all of these are put together, there is a significant pressure on costs which cannot be ignored. We see that, after a five years period in which prices fell, for the first time prices are rising in all sectors as a result of an increase in costs.

Capital: How much will prices rise in the future?
- I think we can get through the seasons by keeping price rises to a maximum of 10-12 percent per season. This is what the figures on the market suggest. However much prices rise, it will be retailers who shoulder some of the cost. It is not right to pass all of it on to the customer.

1 2