Stuck in a bottleneck in recent years, Ceylan, a leading children’s wear brand in Turkey, is now "empty" as it has lost contact with the global firm that used to purchase 65 percent of its production.
The company, which has faced tough times due to accumulating loans and consecutive payback orders, has now just one staff, after Lale Karaoğlu, the firm’s managing director, resigned this week. The headquarters of Ceylan Giyim, which was founded by Özdoğan Family and went public with a market value of $18.7 million at the Istanbul Stock Exchange in 1997, was confiscated by state-owned Halkbank and has been hired out to several firms.
During a board meeting at the end of 2008, board members agreed that "the operations are at an unsustainable level." Now, a security guard at Ceylan headquarters answers the phones for the firm.
Losses pile up
In the recent years, the firm has lost not only its financial power but also labor force due to a lack of production as well as leavings and dismissals. With the director’s leaving, Ceylan Giyim has lost its breath completely.
Company management consists of third-generation family members. They objected to the confiscation launched by Halkbank on grounds that it eroded confidence, but in fact, signaled the recent situation in financial statements belonging to 2008. "It has been decided that the firm’s sustainability is not possible due to the emergence of serious risks in case of the continuation of activities," the members had said then. Ceylan Giyim, which was hit by confiscation by Halkbank following the suspension of production in November 2008, was facing tough times also due to its 2.9 million Turkish Liras debt to İşbank.
Halkbank enforced a lien on the Ceylan brand registered at the Turkish Patent Institute in January, due to its debt of 6.5 million liras. In favor of Halkbank, an Istanbul court confiscated more than 1.3 million liras worth of stocks from Abdurrahman Zeki Özdoğan, who owned 19.2 percent of the firm. There was also Özdoğan’s personal surety on the loans the firms obtained from Halkbank. Ceylan’s management then announced that the confiscation procedure had destroyed the firm’s standing in the market, burdened the conditions of the deals concerning the firm’s service and goods purchases in the market and increased costs.