By Michael Kahn and Silvia Recchimuzzi
PRAGUE/GDANSK (Reuters) - With celebrities such as Rihanna, Justin Bieber and Billie Eilish wearing its designs, Hungarian fashion house Nanushka has stardust many designers can only dream of.
Yet the company is just one of a number of upstart designers from central Europe elbowing their way to the top of global fashion, showcasing their collections on the catwalks of London, Paris and New York as they target lucrative markets such as China and the United States.
Once a struggling local brand, Budapest-based Nanushka has seen annual revenue grow 33-fold to 33 million euros ($38.32 million) since a private equity firm came aboard in 2016.
Focusing on sustainable designs including its vegan leather apparel, Nanushka has become Europe's fastest-growing fashion company, according to the annual FT 1000 list of Europe's high-growth companies.
Other ready-to-wear designers that have emerged from central Europe onto the global scene include Slovakia-based Nehera, worn by Hollywood stars Keira Knightley, Tilda Swinton and Marion Cotillard, and Poland's Magda Butrym, sported by Megan Fox and Hailey Bieber among others.
For these firms, creating a niche in high fashion has been facilitated by Facebook Inc's Instagram and other online platforms which help young, independent designers outside of international fashion centres to be seen by a global audience hungry for something different.
"Without social media probably you know 15-20 years ago it would have been almost impossible to build a global fashion house from Budapest," Nanushka's Chief Executive Peter Baldaszti - married to founder and designer Sandra Sandor - told Reuters.
The brand - which opened a New York store in 2019 and another in London in 2020 despite the pandemic - counts the United States as its biggest market but says China is the future. Parent company Vanguards Fashion Group, of which Baldaszti is also CEO, also snapped up Italian fashion brand Sunnei for $7 million in 2020 as part of a strategy to build a fashion portfolio across Europe.
Central Europe boasts a long tradition of craftsmanship in the textile industry dating back to the First Republic era between the two World Wars when the region was an epicentre of culture and design.
Following the fall of Communism in 1989, Western luxury brands and fashion houses set up shop to produce bags, scarves and clothes in the region, capitalizing on the proximity to west European markets, lower costs and a skilled workforce.
Now local luxury brands in those markets are moving in the other direction to tap into a global luxury goods sector pegged to grow to around $383 billion in 2025 from $309 billion this year, helped by demand in China and among Millenials, according to Hamburg-based database company Statista.
"We started with showing in Paris ... but Instagram is something that really opened the door for brands from countries that are not really on the fashion map at all," Polish handbag-maker Chylak founder Zofia Chylak told Reuters.
A Chylak handbag, made of Italian leather, costs around 200-250 euros and the brand's popularity among some Polish influencers living abroad has helped it become a global name.
DESIRE FOR AUTHENTICITY
Bratislava-based Nehera – named after Czech businessman Jan Nehera who in the 1930s was first in the world to pioneer ready-to-wear clothing - presented its 2022 spring collection in Paris and plans to return to New York after pulling back during the pandemic.
“We are aiming to re-enter the U.S. and European markets," Ladislav Zdut, founder of the brand which last month opened a showroom in Milan and is in early talks with local investors to help fuel expansion plans, told Reuters.
“But we significantly increased orders to South Korea and China and were growing during the pandemic.”
A young generation of designers from smaller countries - many of whom worked or studied abroad - have also accumulated the contacts and knowledge to serve an international luxury market, said Achim Berg, global leader of McKinsey's apparel and fashion group.
"The big luxury brands are dominating the trends in the market but there is a desire for new brands for curation and authenticity," he told Reuters.
Scandinavian brands such as Acne Studios, Ganni and Toteme show how firms from a small region outside the fashion capitals can establish themselves, according to Berg.
In central Europe, rising incomes have also created a stable local customer base able to afford luxury items that help fledgling designers establish themselves before looking abroad, designers and companies say.
Poland's Magda Butrym embraced the local-first approach when starting up in 2014 before going global, Chief Executive Jakub Czarnota told Reuters.
Lady Gaga was seen wearing a short, polka dot Magda Butrym dress in one recent Instagram post and the brand, also favoured by social media influencers, is now present in 40 markets. Asia and the Middle East offer strong growth opportunities going forward but the company will continue to scour its regional roots to create something different, Czarnota said.
"Global consumers are eager to discover newness and this gives brands an opportunity.
"Eastern European designers can look for inspiration to their regional culture and heritage and translate them into distinct products and collections," he said.
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(Reporting by Michael Kahn and Silvia Recchimuzzi, Editing by Susan Fenton)