While many clothing brands now want to bring their production back to Europe, Löffler has always produced here. The Austrian sportswear brand has just built its own new production facility in Bulgaria with around 100 employees. FashionUnited visited her and was also allowed to ask uncomfortable questions.
This is remarkable for a sportswear brand: around 90 percent of the entire added value of the Austrian outdoor and bike clothing brand Löffler takes place in Europe. Not only sewing is done in Europe, the vast majority of fabrics and accessories also come from there. Because Löffler is not just a brand, but also a producer itself. Specializing in the production of knitwear, Löffler produces around 70 percent of the fabrics used in the collections itself, at its headquarters in Ried im Innkreis. The rest, which are mainly fabrics and special materials such as Gore-Tex laminates or additional material, is bought in. “We go our own way,” says Managing Director Otto Leodolter. “We want to form a counterpoint to Asian production and are convinced that we also need added value here in Europe.”
Made in Europe instead of Made in Austria
Not only are the fabrics knitted in Ried im Innkreis, this is also where product development, design, cutting, manufacture and, to some extent, the sewing work take place. However, most cut fabrics are shipped abroad for sewing. A lot goes to Tryavna in Bulgaria, where Löffler built its own new sewing workshop at the end of last year, but also to external sewing companies in Bulgaria and the Czech Republic. Only one part remains at the headquarters and is sewn there. Löffler advertised for a long time with “Made in Austria”, but producing completely in Austria is no longer possible. “The growth of the last few years makes that impossible, we don’t have the capacity in Ried and we don’t get the number of people we need there,” explains Leodolter and adds: “The goal was never to outsource production, but growth to cope with.” This has actually been something to be proud of in recent years: In the previous financial year 2021/22, the company generated sales of 33.4 million euros. Two years earlier, in 2019/20, it was 27 million euros. This corresponds to around 23 percent.
Commitment to Bulgaria as a location
Leodolter and his team invited a small group of journalists to Tryavna in Bulgaria to explain why Löffler invests there and what production in Bulgaria can look like. Because let’s be honest: Even if many companies like to boast about ‘production in Europe’, there are still big differences between the companies there and the prevailing working conditions. At Löffler, the differences are immediately apparent upon arrival: in the middle of dilapidated industrial buildings with crumbling plaster and broken windows, Löffler built a brand new sewing workshop, entirely according to modern standards, with lots of light, air conditioning and a large lounge with kitchen. It is managed by Angel Leonov, who is a co-owner and has been working with Löffler in Tryavna since 2004. Leonov neither speaks German or English, nor does Leodolter speak Bulgarian. Communication runs almost exclusively via two German-speaking employees who translate and actually work in production. “We do that even when signing contracts,” Leodolter laughs, “if I had everything officially translated, we wouldn’t make any progress.” You can tell that he has a special connection to the country and its people. He used to come here more often when he was still a professional cross-country skier and a member of the Austrian national team.
The difference between Bangladesh, Bulgaria and Austria
And what about wages at Löffler Tryavna? After all, Bulgaria is one of the poorest countries in Europe. Does it still make a big difference whether you produce in Bulgaria or Bangladesh? Very well, Löffler wants to show, and does the math: A single Löffler employee earns an average of 26.7 percent more than the median income of a Bulgarian household. Wages are higher than usual in the region anyway. In addition, Löffler wants the Bulgarian employees to share in the company’s profits, just as Löffler has been doing for employees in Austria since 2000.
All of this has an impact on production costs: a wage minute in Bangladesh costs one cent, in China it’s four cents and in Bulgaria 15 cents, says Leodolter. For example, if Löffler had a hooded jacket made in Bangladesh in a working time of 120 minutes, the total manufacturing costs – assuming the same material costs – would be roughly halved. That sounds attractive, of course, but it also has a downside. Leodolter: “That is why it is currently so difficult for many companies that would like to return to Europe to find suitable companies. They are used to completely different margins. We’ve never done anything other than produce in Europe and that’s how we learned to save.” A pay minute in Austria, on the other hand, costs 50 cents. Leodolter also reveals that.
Continued growth in the bike and outdoor segments
Own production has paid off for Löffler. The company has been consistently profitable since 1982. Together with the sister company Fischer Sports (ski manufacturer), Löffler GmbH belongs to Fischer Beteiligungsverwaltungs GmbH, which in turn is owned by two private foundations. Löffler was also able to cope well with the pandemic: First by shifting production to face masks in Ried, and a short time later when the outdoor boom surprised everyone because the supply chain in Europe was stable and was partly in our own hands.
Assuming that the outdoor and bike boom will continue in the coming years, Löffler is even looking for another location in Bulgaria to open a sewing shop there. The company in Tryavna is supposed to grow to 150 employees, but the place doesn’t give more. “You have to realize that there is only a limited number of workers per region,” explains the entrepreneur. “You can now feel the lack of workers here too.” Löffler also wants to set up a training program in Tryavna. However, buying land to set up companies there is not easy in Bulgaria. This is mainly due to the unclear ownership of many properties and the resulting legal uncertainty. Leodolter: “I suspect that deters many foreign investors.”
Goal: Certification of all own companies
But Löffler wants more. All Löffler-owned companies are already producing in a climate-neutral manner. All unavoidable CO2 emissions are offset by supporting a certified climate protection project in Bulgaria. A photovoltaic system is to be installed in Tryavna soon, also in order to reduce the enormously increased energy costs, which are hitting Bulgaria particularly hard. When everything is ready, the company should be certified. From 2023, all products manufactured in our own factories are to be certified according to ‘Made in Green by Oeko-Tex’. From then on, Löffler will also completely dispense with PFC in the water-repellent finish of the clothing. The proprietary fabrics are already PFC-free, but Gore-Tex will only eliminate ecologically harmless PCFs from 2023.