MESSAGES

In the recent years, the retail sector has been one of three main business sectors in which international capital investments have been observed in our country. According to the recently available data, the number of the foreign players and their dominance in the market are increasing gradually within the sector estimated to have annual volume of 70 billion dollars. Especially this rapid change experienced in the last decade creates a big challenge for the unorganised local retailers.

The capital owners have gained confidence when any disruption was not observed in the markets before and after the elections made in 2007. The fact that foreign capital has entered and made investments in several sectors within this process sets the most concrete example of this confidence gained. 2007 was recorded as a year in which both positive and negative events were experienced. The developments that we can consider as positive events include the institutionalisation attempts of the conventional corporations and their efforts toward expanding their businesses in respect of both physical and quality characteristics. The negativities can be listed as the decrease in the profitability as a result of high competition rate, increase in costs and the lack of high increases in the turnovers like those observed in the previous periods. The recessions in the market have influenced the collection performance of the companies. Furthermore, the bad check rate at the end of 2007 has increased by 25% compared to 2006 and the bad loan rate in the various loans extended by the banks has increased. The companies engaged in import-export activities have been negatively affected by the instability in the foreign exchange rates. The medium scale enterprises were also negatively influenced in respect of competition as a result of foreign capital inflow and the establishment of big shopping centres in every region. This situation led the real sector to surrender to the foreign capital and the elimination of competitive powers to a considerable extent.

As Değişim Group, we have specified our new strategies in the beginning of 2007 and clearly consolidated our position in relation with the globalising world and the growth in the national economy. The year of 2007 was a successful year for us. We have achieved our target of growth by 30% that we have determined for 2007 at the end of 2006. This is of course a satisfactory result both for us and our distinguished business partners. The support of our business partners remaining on our side and their stable presence have also enabled us to gather strength. The required actions have been taken for 2008 and our target of growth has been determined as 25%. As Değişim Group, we will continue to provide high quality services up to high standards and raise the bar.

"Değişim Group will continue to grow in this path of progress together with all of its employees and the distinguished business partners."

Haydar EKİNCİ
Değişim Group
Chairman of the Board of Directors