Croatian quality Galeb

CROATIAN QUALITY

Croatian manufacturer of underwear and other apparel Galeb d.d is capitalising on a period of expansion and great opportunities both in its domestic market and across Europe. Emma-Jane Batey spoke to CEO Mr Pezo to find out more.

Founded in Croatia in 1951, Galeb d.d is very well known across the region as a manufacturer of high quality underwear for men, women and children. Initially active in the field of home textiles, the company started to focus on underwear in predominately natural fibres in the early 1960s. Since then, the company has steadily expanded to become one of the country’s leading and best known underwear manufacturers, and has boosted this reputation with an expanded portfolio of apparel of equally high quality.

CEO Mr Pezo told Industry Europe how the company’s history has shaped its success over the past 60 years. He said, “Even though we are more than pleased with our current market-leading position and broad product range of high quality garments, it is fair to say that our most successful days for production were the late 1980s. We were manufacturing 11 million pieces each year! When the war started in the early 1990s, of course there was a massive impact on our business, and many others. Thankfully Galeb survived but there was certainly an impact, as we were located in the south of Croatia and were cut out of commercial activities in north Croatia. For many years we could only access it by sea which of course had its challenges in terms of logistics. All of these experiences have helped to create our dynamic, tenacious company and have played a part in our ongoing success.”

High quality apparel

Today, Galeb is a privatised company with more than 350 employees. With its focus still firmly on manufacturing high quality underwear, its product portfolio has expanded to include swimwear, sleepwear, outerwear, knitwear and homewear.

Galeb sells its products under three core brands – Galeb, Adriatic and GLB – as well as producing garments for other brands. Mr Pezo continued, “Around 60 per cent of our €8m annual turnover is achieved through sales of our own branded garments. The remaining 40 per cent is from third-party manufacturing contracts; we manufacture using our own facilities for other brands at the same high quality point as Galeb. We work closely together with chosen partners to produce their garments to their exact specifications and we expect this area of our business to grow alongside our own brand activities.”

A carefully-developed network of sales channels supports Galeb’s ongoing suc-

cess. The three Galeb brands perform well in the domestic Croatian market as well as neighbouring countries, particularly Slovenia and Bosnia Herzegovina. The company currently operates 16 retail stores across Croatia and has ambitious plans to expand over the coming years. Mr Pezo said, “We have a number of new stores planned. We expect to operate around 43–45 Galeb retail stores or concessions in Croatia, with a further 15 stores or concessions in Slovenia and Bosnia Herzegovina within the next three years. We are clear that our growth strategy is well planned to utilise the opportunities available in our region as well as the potential when Croatia joins the EU. We are prepared for further growth beyond our neighbouring countries but will probably start with our closest markets of Austria and Switzerland – they both have stable economies and a good level of average national wage, which offers ideal conditions for retail growth.”

Underwear with added technology

Current trends that are impacting on Galeb include the increase in demand for garments with additional functionality. Galeb is working hard to develop clothing with functionality including greater moisture wicking and moisture management capabilities and anti-

allergy clothing. Furthermore, the company is predicting an increase in demand for fire retardant underwear. With studies proving that two thin layers of fire retardant clothing is far safer for people in emergency services than one thick layer, as well as the $7bn annual cost of payouts to firemen in America following accidents, Galeb is aware that this is an interesting market with truly global opportunities. Galeb’s production capabilities reflect the company’s dedication to high quality garments. It has the three core processes needed for manufacturing high quality garments in-house, with knitting, dying and cutting and sewing all available, meaning that Galeb can produce clothing from ‘yarn to garment’ without outsourcing any aspect, keeping costs relatively low and quality high.

Galeb expects to grow in two different ways over the next five years. Firstly, it predicts its own brands of clothing will develop with new product lines and possibility a fourth brand joining the portfolio. Secondly, Galeb’s focus on R&D within the field of greater functionality will see it join new markets for high-tech clothing primarily in the safety garment sector. Mr Pezo concluded, “We are well-positioned both commercially and geographically to maximise our excellent potential over the next few years.” n