Turkish lira plunge: How Zara could gain from Turkey’s economic pain

Everybody is freaking out about how Turkey’s currency is in a tailspin. The lira plunged 17% against the dollar and 18% against the euro on Friday. This instability is causing anxiety in Turkey, which sees an economic crisis brewing.

But Turkey’s pain is clothing-brand Zara’s gain. Its parent company, Inditex, which also owns Bershka, Pull & Bear, and Massimo Dutti, makes an estimated 15% of its products in Turkish factories, which means its cost of manufacturing just went down. (You may remember how angry workers at Zara factories in Turkey went into stores to sew notes into clothing saying that they had not been paid for making the very clothes on those shelves.)

On the other hand, as Bloomberg points out, Inditex has more than 200 stores in Turkey. In the long run, a Turkish economic crisis could result in fewer Turks purchasing products from the company.