Monday, 13 January, 2020

Turkish Fashion Retailer Opens New Store in Tehran as Sanctions Lifted

Leading Turkish apparel brand D’S Damat announced it had opened a new store in Tehran just several days after the world was informed about the dropping of the sanctions, Turkish daily Today’s Zaman reported .

Last week, the landmark decision was made to end the embargoes imposed by the United Nations, the European Union and the US on Iran in return for the latter agreeing to close its nuclear program. Pinning their hopes on the 80-million-person economy’s return to global markets, businesses from all industries in Turkey have shown an appetite for improving relations with their counterparts in the neighboring country. However, it has been the ready-to-wear retailers who have spearheaded the expected investment move.

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Turkish Retailer D’S Damat opens a new store at Mirdamad Street, Tehran (Photo Credit: Milliyet)

Even though Iran pledged to curb its nuclear ambitions last summer, encouraging the companies who had already been poised to expand into the country, the timing of Damat’s opening of its Tehran branch and announcements by similar textile firms have revealed the industry’s desire to seize possible opportunities in Iran in the absence of sanctions. Another Turkish retailer, Mudo, has also said it is considering commencing operations this year.

During the years of sanctions, companies experienced quota restrictions, difficulties in obtaining loans and, most importantly, the weakening purchasing power of Iranians, Bilgin Aygül, the head of the Turkish-Iranian Business Council under Turkey’s Foreign Economic Relations Board (DEİK), told Sunday’s Zaman.

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D’S Damat store in Tehran (Photo Credit: Turkish media)

On the back of sanctions-driven woes, Turkish exports to Iran fell from $9.9 billion in 2012 to $4.1 billion in 2013, $3.8 billion in 2014 and $3.68 billion in 2015. “Iran has become an attractive market for Turks after the sanctions, but it is challenging as well,” Aygül said, before adding that three-fourths of the Iranian economy is run by the state. “Also, Iran has yet to become a part of the World Trade Organization, which leaves companies vulnerable to, for example, unfair competition,” Bilgin said.

Turkey’s Tepe-Akfen (TAV) consortium won a tender in the early 2000s to run the Imam Khomeini International Airport in Tehran but was later denied the opportunity by the Iranian government after local airlines refused to work at an airport managed by foreign nationals. In a similar incident, Turkish mobile operator Turkcell was left out of a state tender to obtain a mobile phone license in 2015. On multiple occasions Turkcell filed complaints against its South African rival MTN in the tender, accusing it of bribing both Iranian and South African government officials to ensure the contract.

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