Turk­ish cloth­ing chain LC Waikiki is a mod­est suc­cess

LC Waikiki pleases con­ser­va­tives with­out turn­ing off lib­er­als “The se­cret is to un­der­stand the Ana­to­lian cus­tomer”

Bloomberg Businessweek (Asia) - - CONTENTS - −Devon Pendle­ton and Iso­bel Finkel

At an LC Waikiki store along­side a six-lane high­way in cen­tral Istanbul, throngs of cus­tomers pe­ruse the racks, weav­ing among man­nequins sport­ing full-length evening dresses, sweat­pants, and belted trench­coats. Un­like most shop­pers at nearby Zara andd H&M out­lets, many women at Waikiki­ikiki are wear­ing head­scarves and tu­nic­scs that skim the floor. The re­tailer “hasas a great range for cov­ered women,” saysays Semiha Ko­caturk, a 53-year-old fromm a nearby work­ing-class neigh­bor­hood who’s buy­ing trousers for herr grand­daugh­ter. “I can find the kindd of blouses and cardi­gans I like veryy eas­ily here, and that’s just not the case in ev­ery store.”

Waikiki has built Turkey’s most suc­cess­ful fash­ion brand by sell­ing styles that ap­peal to ob­ser­vant Mus­lims with­out alien­at­ing sec­u­lar buy­ers. The chain’s lineup is “very ap­pro­pri­ate for the sen­si­bil­ity of con­ser­va­tive cus­tomers,” says Maria Com­fort, Waikiki’s head of mer­chan­dis­ing and a vet­eran of U.S. brands Wet Seal and Hot Topic. “We are unique in tar­get­ing the wardrobe needs of a broad range of peo­ple.”

Founded in France in 1985, named for a Hawai­ian beach, and rein­vented in Turkey by con­ser­va­tive Mus­lim own­ers, Waikiki is crush­ing lo­cal and for­eign ri­vals in the Turk­ish fast-fash­ion mar­ket. It has al­most four times the share of its clos­est com­peti­tor and says 80 per­cent of the coun­try’s con­sumers have vis­ited its stores, a pen­e­tra­tion ap­proach­ing that of Wal­mart Stores in the U.S. Af­ter blan­ket­ing Turkey with out­lets, Waikiki seven years ago be­gan a push abroad, mostly into Rus­sia, the Gulf states, and Cen­tral Asia. The com­pany has 413 lo­ca­tions in Turkey and al­most 200 in cities as farflung as Al­giers, Baku, and Tehran. This year, Waikiki says it in­tends to open more than 30 out­lets in its home coun­try and 100 abroad. “We’ve taken our mis­sion of ‘ev­ery­one de­serves to dress well’ be­yond the bor­ders of our coun­try,” Chair­man Va­hap Ku­cuk said in an e-mail.

Like Wal­mart, Waikiki is fa­mously in­ex­pen­sive— a pair of women’s jeans sells for as lit­tle as 27 lira ($10)—which helps draw young shop­pers and those who might oth­er­wise choose knock­off ap­parel at out­door bazaars. Even as Turkey’s econ­omy fal­tered last year, Waikiki’s rev­enue

jumped 24 per­cent, to 7 bil­lion lira. That’s made Ku­cuk’s brother Mustafa, Waikiki’s chief ex­ec­u­tive of­fi­cer, a bil­lion­aire. The one­time sheep­herder’s 39 per­cent stake in the com­pany is val­ued at $1.7 bil­lion, ac­cord­ing to the Bloomberg Bil­lion­aires In­dex. Va­hap’s 9 per­cent stake is worth about $400 mil­lion. The Ku­cuks de­clined to com­ment on their wealth.

Orig­i­nally a French brand (the LC stands for les copains, or “friends”), Waikiki de­vel­oped a rep­u­ta­tion for ec­cen­tric de­signs and bright col­ors. In the 1980s it started buy­ing tex­tiles from the Ku­cuk fam­ily’s com­pany. The Ku­cuks and a hand­ful of part­ners be­came the brand’s lo­cal whole­sale dis­trib­u­tor in 1990; seven years later they bought Waikiki from its founders. Mustafa and Va­hap are em­blem­atic of the so-called Ana­to­lian Tigers, a gen­er­a­tion of en­trepreneur­s, mostly con­ser­va­tive and hail­ing from the coun­try’s east—the equiv­a­lent of the U.S. Bi­ble Belt when com­pared with more sec­u­lar Istanbul—who have thrived un­der Pres­i­dent Re­cep Tayyip Er­do­gan. Once asked by a so­ci­ol­o­gist to ex­plain Waikiki’s suc­cess, Va­hap said, “The se­cret is to un­der­stand the Ana­to­lian cus­tomer.”

Few other mass-mar­ket brands in Turkey ap­peal so di­rectly to con­ser­va­tive dressers. Ayse Nil Kirecci, a pro­fes­sor at Mal­tepe Univer­sity in Istanbul who’s writ­ten about Waikiki’s role as a “de­moc­ra­tiz­ing” force in Turk­ish fash­ion, says its fab­rics tend to be thicker than those used by Zara or Mango, and the neck­lines are typ­i­cally less re­veal­ing. Still, Waikiki plays well to sec­u­lar con­sumers, with pen­cil skirts and sleeve­less blouses, tread­ing a del­i­cate line in a coun­try where pol­i­tics are some­times ex­pressed in con­sumer pref­er­ences. “It’s not for con­ser­va­tive peo­ple, it’s not for lib­eral peo­ple,” says Murat Er­gene, a retail con­sul­tant who ad­vises the com­pany. “It’s for ev­ery­one.”

The bot­tom line Waikiki is bring­ing fash­ions that ap­peal to the sec­u­lar and the ob­ser­vant to coun­tries across the Middle East, Africa, and Asia.

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