Sevdalin Spasov is founder and CEO of „M Holding“, Chairman of the Bulgarian Association Circular Textile (BACT) and Co-President of the newly established American-Bulgarian Business Association (ABBA). Sevdalin Spasov also owns Green Team Worldwide Environmental Group, an American company that collects and trades in second-hand clothing and has its own containers and warehouses on the East and West coasts of the USA, as well as in Vancouver, Canada. In Bulgaria, the „Mania“ brand operates 43 stores, 70% of which are franchised. The holding company also has one store in Greece. The number of employees in Bulgaria is 500, and in the USA and Canada - about 80 people.
"M Holding“ brings together several companies to collect, sort and sell second-hand clothing and outlet products. "Tex Team“ is engaged in the import, processing and wholesale of second-hand clothing sourced from Western Europe, the USA and Canada. The company has warehouses in Sofia and Varna, where the main sorting center is located. "Mania Team“ manages the Mania stores business, while „Mania Online“ handles internet sales. For the last three years the group of companies has been joined by "Fashion Brands" with the main business of import and wholesale of new outlet products and home goods.
Mr. Spasov, tell us first about the path of the clothes we can buy in one of the 43 stores in Bulgaria and online at www.mania.bg. Where do they come from, how are they sorted, how many people are behind the whole process?
The clothes are collected by specialized companies for separate collection in Western Europe and the USA. After arriving by sea and land at our textile ecocenter in Varna, where over 200 people work, they are sorted into more than 30 categories and qualities. Depending on the fashion of the garment and its seasonality, as well as how well it has been preserved, the items are allocated to the different markets. About 20% of the goods (the best part) are sold in Bulgaria through physical stores and online, and over 70% of the sorted production is exported to countries in Asia and Africa. These are mainly lower quality and summer clothes and shoes. We can proudly state that we manage to recover nearly 99% of textile waste, with the landfill level already below 1%.
What should be the path of a fashion find once the consumer has decided they no longer wish to wear a particular garment, bag or shoe?
Fashion finds, the desire for frequent wardrobe changes and so-called "fast fashion" have a serious impact on consumer habits. Buying ever larger quantities of clothes and then throwing them away ever more quickly has serious environmental consequences. Studies show that on average a garment is worn only 7-8 times and then thrown away. Annually, Bulgarians buy and use about 15 kg of new clothes and shoes, which generates over 100 thousand tonnes of textile waste. Until very recently, almost all of this went to landfill, along with the rest of the household waste. 5 years ago, our companies started a pilot collection of textile waste on the territory of Bulgaria, and we currently operate more than 300 containers in over 30 municipalities. After the subsequent treatment of this waste, the reusable clothes are redirected for sale mainly in African and Asian countries, while the lower quality part is used to produce cotton rags for industry, wadding or used for energy recovery. Unfortunately, the material collected in Bulgaria is of very low quality and so far, this activity has only brought us losses.
Do your customers in Bulgaria, Greece and overseas differ in their attitude towards textiles?
Consumer habits in different countries have their own peculiarities, but customers always prefer to buy quality goods, if possible, and to be cheap. This is a rare combination, but in fact we offer our customers exactly that - quality clothes and shoes at very affordable prices.
Nearly 5 years ago we started working with outlet products, which are customer returns and goods with damaged packaging from major European online sales sites. In Germany, two out of every three new garments bought online are returned back to the retailer. A large proportion of these are with damaged packaging, torn labels or slightly used. We purchase these products and, after the appropriate processing, offer them to our customers in Bulgaria, Greece and, from very soon, Romania. This kind of trade is also part of the Circular Economy, because otherwise these goods would be destroyed or thrown away in landfill.
Speaking of the US, how did you take the step of doing business there?
After the great financial crisis in 2008, the consumption of second-hand clothes has risen sharply not only in Bulgaria but also worldwide. At the same time, people's incomes in Western Europe fell significantly and this led to an insufficient supply because they simply stopped disposing of their clothes and shoes. Then one day I said to myself that since there is no supply in Europe, why not look to America. There, the consumption of goods is much higher and, at the same time, the separate collection of textiles is only 12%, compared with nearly 30% in Europe. There is no way that these indicators will not make you take a risk. And we did.
12 years later, how do you survive on the US market, what is the attitude towards an entrepreneur from Bulgaria?
They say that "in America, money rolls on the ground, you just have to bend down and pick it up." In our case it was exactly like that. With nearly 90% of used clothing being disposed of in general waste containers, you just have to "bend down and pick it up" - that meant positioning special containers to collect unwanted textiles, then providing the necessary processing and preparation for reuse. In this sense, we are a high value-added business because from something unwanted, we produce a 'new' product with almost the same performance qualities, and without generating carbon emissions or any other kind of negative environmental impact. Of course, starting overseas was very difficult. A new continent, a different culture and a completely different way of doing business, but to date I would say it has been worth it. In 12 years, our US business has overtaken the European business in terms of revenue, while EBITDA for 2022 is three times higher.
You are one of the most active members of the BIA on the topic "Circular Economy" through BACТ, but at our last meeting we found out that you have a new role - President of the American-Bulgarian Business Association. How did the idea for ABBA come about?
Flying almost every month between Bulgaria and the US, I realized at one point that I could be useful to many other entrepreneurs like me who are just looking to start a business overseas. Over the years, I've gained a lot of experience and contacts, and I decided it was time to share them with young people who need them. So, together with Ms. Elise Nestoroff, who is based in Washington, D.C., we gathered 10 friends and associates with whom we've worked actively over the years, and created ABBA. The fact that these people are of established integrity - lawyers, consultants, lobbyists, business people, and are proven professionals in their field - makes me optimistic that our venture will succeed.
What are ABBA's goals and objectives in the short term?
We want to develop a working and efficient platform for doing business from Bulgaria to the US and from the US to Bulgaria. We will help our members - small and medium-sized companies on both sides of the ocean - to develop successfully and sustainably. Among our goals is also to attract successful Bulgarians from our diaspora in the US to return to our homeland, invest and live here again. Last but not least, we will actively work to strengthen the rule of law and Euro-Atlantic values in Bulgaria.
Who and how can become a member of ABBA?
Any individual or company that accepts the Statute, shares the values and helps to achieve ABBA's goals is welcome. We want to maintain good "hygiene" regarding our members, so we want them to be people of integrity and good image in the society. We in turn offer a kind of boutique service. One of the advantages for all who become members of ABBA is that they will have access to people with real practical experience and established reputations developed on both sides of the ocean.
