A tall, elegantly dressed man greets everybody with a smile in the Formens suits factory. His suit jacket fits him perfectly, and his dotted hanky in his breast pocket, matching his dotted socks, gives him a chic, youngish look. He can’t be more than 40. Where is the old confections magnate we were supposed to meet?
When reading Gerard Losson’s bio, one would expect an elderly man, of at least 60. After all, he started a business in Romania in 1997, so he would have had to be already a seasoned businessman back then to make it through the muddy waters of the post-communist transition period.
If one were to bet on that, he’s lose. Frenchman Gerard Losson, who greeted us and now walks us through his Formens factory in Botosani, in Northern Romania, is a different kind of breed. Raised in a family of farmers close to the German border, he got a shot of entrepreneurial spirit at a young age. His father told him he didn’t want him a farmer while his mother gave him the confidence that he could do anything he would put his mind to.
So he became a textile engineer. After graduation, he worked for three years in a French textile equipment company, which has disappeared in the meantime. He had the chance to travel around the world, to America, China and Korea. However, at that time, the French confections industry was dying, as many of the French factories closed between 1993 and 1995, as they couldn’t adapt to competition from cheaper manufacturers in other countries. French clothing retailers started having supply problems, as the foreign producers, although cheaper, were not always reliable.
It is then that he saw a business opportunity that would later change his life. “I and Thomas, my roommate during university, created our firm, Cartex, to organise production outside France. We started in Portugal, but the costs were too high, we then tried in Tunisia, but it didn’t work that well, as they didn’t have the tradition in confections. Then, in 1996, we made the first trip to Romania,” Losson recalls.
With this purpose in mind, the two friends didn’t even bother to enter capital Bucharest. Arriving in Otopeni, they went up north to Focsani, Roman and all the way up to Botosani in the northern Moldova region, one of the poorest in the country.
Why Botosani? The city is not only far from being a tourist destination, but also rather isolated. Not the place a 27-year old to have fun. Only he was not looking for fun; he was set on doing business. 18 years later, the place is his second home.
“We chose Botosani for its tradition in textiles. We knew it because French companies used to import from Romania before the Revolution. Sibiu, Botosani and Focsani were well-known textile hubs,” he explains. His knowledge of the textile and confections industry in Romania would put many of the Romanian textile specialists to shame. The proximity to Ukraine and Moldova Republic also proved to be an advantage, as Losson later expanded his business by subcontracting to factories in these countries.
At first, they acted as intermediaries. They would take orders from French retailers and place them in local factories, some of which were already owned by foreign investors. One of them was his friend Thomas’ cousin, who had a confections factory with 400 employees in Botosani.
“With 12 people, we reached EUR 15 million in sales by 1999. Then, a large group from France made an offer to buy us, but we refused,” he says. However, this was a turning point for them, as they decided to give up their intermediation business and start their own factory. With this in mind, in 1998 they opened their first company in Romania, Cantex Prod. They came with the first design system and trained the first people, and in September 1999 they bought the first 6,000 sqm hall within a large old textiles factory in the city.
Then they went to France to get the necessary production equipment. “Big French industrialists were at the auction staring in awe at two 30-year old youngsters who outbid them and took all the equipment. They must have thought we were crazy.” Losson still smiles when he remembers this. They bought a whole factory at the price of scrap, 27 truckloads of equipment. They started production in May 2000.
In 2002, they opened a new factory in Darabani, the most Northern city in Romania, on the border with Ukraine. They used the same recipe, but this time they bought the equipment from Scotland. “We were 33 and we had 1,250 employees.”
Some three years later they were faced with another challenging decision. Thomas’ cousin, who at that time had EUR 150 million in yearly sales, proposed them to join forces as a group. Another proposal he rejected, as he didn’t want to lose his power to decide on his own business.
So Gerard Losson and his friend Thomas split up their company. Thomas took the factory in Darabani and joined his cousin, while Gerard kept the plant in Botosani. This is how Losson started Formens, which is now the largest men’s suits maker in Romania and the fifth largest in Europe, delivering about 700,000 suits each year.
However, it wasn’t as easy as it may sound. In 2005, the market was very difficult. China just had got the permission to export to Europe and most confections factories in mid-Europe closed leaving a few hundred thousand people jobless.
“My vision was then to target a different kind of clientele, more exclusive. So we started to manufacture made to measure suits (also known as tailor made – e.n.).” As the demand began to grow, he had to expand his factory in Botosani, first to 12,000 sqm and then to 17,000 sqm and to increase the number of employees to 870. He also bought a 6,000 sqm trouser factory in Dorohoi with 160 employees. With more than 1,000 employees, he is now the largest private employer in Botosani county.
Losson also continued to invest in the design and technological process. In 2010, when a French factory that was producing made to measure suits closed down, he took one of their top specialists and brought him to Botosani for six months to help him improve the production in this segment.
In 2013, he brought an Italian expert to help him build the new sartorial line, which produces traditional jackets (both made to measure and ready to wear), a EUR 6.5 million investment. The manufacturing process for these jackets is more complex and costly, and the added value is much higher. Top level brands he works with – but Losson is bound not to reveal their names – sell these suits for thousands of euros.
Formens currently manufactures some 25,000 made to measure suits each year, which is only about 3.5% of the company’s total output. However, this segment generates 15% of the company’s turnover, which last year reached EUR 43 million, up from EUR 3.2 million in 2005.
But Gerard Losson is not the man to settle for the success he’s had so far. His ambition is to create a business that will outlast him, a business that he can leave to his 15-year son. He has invested too much of his time and made too many personal sacrifices to get here.
He has been spending more time in Botosani than with his family back in France. Every week he is in Botosani, keeping an eye on things and making sure they run smoothly. To make things easier, he set his Botosani home base in an apartment on the top floor of the factory. He could have stayed in the local luxury real estate compound he invested in, but preferred being close to the factory instead.
A perfectionist, Losson gets involved in looking for new fabrics and even in something as trivial as choosing the best buttons for a suit. He admits his managing style is hands on and that Steve Jobs inspired him for his focus on details. He wants to control every department, to make sure he gets the best product. But this requires him to talk to 15 to 20 of his people every day, which can be very stressful and demanding. However, he doesn’t have any white hair. “This is because I also can pass on the stress very easily,” he jokes.
After more than 15 years of producing suits for others, Losson feels he has learned enough and that he has sufficient experience to start putting his own brand on men’s suits. This is his newest challenge, to make the leap from manufacturing to retail. His ambition is to have his name on the suits. Well, not his, but rather his son’s: the Louis Purple brand he launched a few years ago was named after his son Louis.
Pushed by his will to continue to grow his company, as well as Jack Welch’s learnings related to setting up complementary business lines, Losson decided to launch the first shops under the Louis Purple brand, in Romania, in March this year. As margins for manufacturers are constantly under pressure from retailers and opening a new factory is almost impossible due to the steadily declining labour force, retail seems to be the more suitable way to take the business to another level.
“In production we are already big and it is harder to grow. In retail, the possibilities for development are almost limitless,” Losson says. He has set up an ambitious target: to reach 60 shops and EUR 30 million in retail sales by 2019. This should help his company increase its turnover by at least 10% each year and to reach EUR 65 million by 2019.
“If I put all my energy into this business, at least I want to see this in the results,” he says.
Losson could talk about his business for hours on end: he is proud of his achievements. He knows all sorts of details about men’s suits and about the manufacturing process, such as the fact that moonlight affects the colour of the fabrics. This is why the fabric warehouse has no natural lighting.
Still, he is somewhat shy and hates publicity. The thought of appearing on the cover of a magazine upsets him: “I am not for sale, my suits are!”
Andrei Chirileasa, [email protected]
(Photos by: Andrei Chirileasa)