Today, Nelva has 250 employees, 14 stores and thousands of fans in Belarus, Russia and Ukraine. Deputy Director Irina Rakhmanova recalls how the ambitions of a few students grew into a large-scale business. Her speech is filled with such passion and enthusiasm that it immediately becomes clear why this could not have been any other way.
10 years from reselling knitwear to owning a chain of stores
In 1997, Brest was the epicenter of Belarus’s clothing business. Back then, though, its specialty was reselling ready-made clothes to Russia. Nelly and Ivan Goroshevich, whose names made the brand, were an ambitious young sister and brother like many others in the 1990s. Except that they thought of something bigger than just reselling knitwear.
“It happened pretty spontaneously,” says Irina. “We found a few small businesses, signed a joint venture contract, rented a room – and started sewing original clothes. Ivan was in charge of production and buying, and Nelly handled sales.”
That’s how the Nelva brand was born.
At the end of the day, though, all the clothes were still being shipped to Russian markets. Over time, Nelva expanded and gained recognition. Nelly and Ivan decided to focus on quality and bought some new equipment that nobody else in Belarus had. By 2008, a decade later, it was crystal clear that their high-quality product did not belong in informal markets. The time had come time to pave a new path and develop a retail network.
“Our first store was a small rented room opposite GUM, the department store in Minsk,” Irina recalls. “It caught people’s eyes and our clothes became popular outside the Brest knitwear markets. There were few shopping centres back then, and the competition to get in was insane! But we did it. Once we had four stores, it was time to develop a regional chain. Today, we have 11 stores in Belarus, 3 in Moscow and more than 100 wholesale customers in Russia and Ukraine.
‘Back then, you’d go grey before you opened your own business, but now the process has been streamlined’
Irina joined the company in 2004, when she found herself bored working in distribution law at a state-owned enterprise. She was ready for something new.
“I was looking for a job in Brest, where I come from, and I found Nelva,” Irina recalls. “The company was growing and facing new challenges, and it was just what a relentlessly curious person like me needed. I slowly got involved in all aspects of production and sales, and went from head of the legal department to deputy director.”
Rakhmanova believes that doing business in Belarus is much easier today than 10 years ago.
“About 85% of the team are women – it’s a pure matriarchy in our factory!” Irina laughs.” Actually, I think that being a woman is an advantage. It’s easier for us to negotiate with anyone. Also, private business in Belarus over the past 10 years has become much easier. Back then, you’d go grey before you opened your own business, but now the process has been streamlined. Many people are unaware that there are support programmes for small businesses.”
One such project helping SMEs is being implemented by the European Bank for Reconstruction and Development, supported by EU funding under the EU4Business initiative. In 2019, EU4Business was working on 122 projects to help SMEs in the six countries of the Eastern Partnership, with a budget of over €836 million, including €32 million in Belarus. Rakhmanova learned about the possibility of receiving support from the EBRD ‘Women in Business’ programme from the organisers of Belarusian Fashion Week in 2017. The programme is supported by funds from the EU, Sweden and the EBRD Small Business Impact Fund (Italy, Japan, Korea, Luxembourg, Sweden, Switzerland, Taipei China and the USA).
“We had workshops and I was very impressed with the professionalism of the speakers,” Irina explains. “Then, as part of joint projects, we had help with brand visualisation and strategy. We consulted with specialists in various fields, from social networks to production organisation. It helped a lot to improve the Nelva brand image. Overall, we can see that we have become different.”
The year after the project ended, the company's revenue grew by 20%, and exports grew 45%. The EBRD has set a more ambitious goal: to make the Nelva brand recognised across Europe, to set up Nelva’s own online store there, and to gain access to large online platforms and franchising partners. But the COVID-19 crisis put these plans on the back burner for a while.
Instead of a Summer 2020 collection, masks, protective suits and shoe covers
“In February, the first cases of the virus appeared in Belarus,” Irina notes. “It seemed like the pandemic had nothing to do with us, but the impact was almost instant. In March, sales were down to 60% of what they had been in March 2019, and in April it was only 20%. By May, the weather got warmer and people began going to our stores, so turnover grew a little and we got up to 45% of the sales of May 2019. We were in the heat of preparing a new collection for launch and not prepared for the closure of the borders and of many shops in neighboring countries. In April, it became clear that there would be no one to sell to – which meant no profit. We had to act quickly to survive.”
During the pandemic, the company switched to making disposable medical masks because there was a shortage, not only for ordinary Belarusians, but also for medical personnel. To stay afloat, the company had to reduce working hours and even asked some employees to take leave without pay.
“We wanted to sew face masks, but we had neither gauze, nor calico, nor elastic bands – there was nothing at first,” Irina recollects. “Now we produce high-quality masks not with sewing machines, but with special equipment run by four operators. We make about 15,000 masks a day, which we sell to medical institutions, pharmacy chains and industrial enterprises. We also donate 5% of the personal protective equipment we make to doctors in the Brest region.”
Over April, the company produced only masks, but the market was soon saturated with masks, even if they weren’t always of good quality. In no time, Nelva switched to making disposable suits and shoe and head covers for doctors. During three weeks of May, Nelva sewedmore than 50,000 protective overalls.
“We had shipped the spring collection to stores before the crisis, and the summer collection at the beginning of June,” Irina continues. “The autumn collection had to be slightly revised and reduced. Now the quarantine measures are starting to relax and our customers are starting to reopen. We’re working to get back to normal. We will continue to produce masks after the pandemic, but as a sideline. People will still need them, even if not so much.”
For a small business in a small country, it’s been a challenge to survive in the highly competitive women’s wear environment – and even more so to succeed. But Nelva is keeping up. First of all, the brand focuses on quality, from fabrics and quality control over every line during production to training for shop assistants twice a year. Secondly, Nelva offers clothes not only in the model 42-44 sizes, but also in larger sizes. And they fit perfectly – the secret is to try new styles on live models, not mannequins! And thirdly, Nelva’s not afraid of change.
“The key is to address challenges quickly now,” Irina concludes. “We’ve had much more work in recent months. The Nelva team is also getting ready to enter the European markets and digging deeper into online sales. We can understand those who prefer to lie low for now, but it’s not for us to sit still. We aren’t afraid to try new things.