How the EGP shock built Egypt’s homegrown brand wave

There was a time when shopping was, above all else, an exercise in taste. Egyptians didn’t think twice about picking up a pair of jeans from Zara or even a swimming suit from Beymen. Then the EGP devaluation hit, and international retailers, instead of absorbing it, passed it through to the end users. And a demographic that grew up treating global basics as, well, basics woke up to find them reclassified as luxury.

The price vacuum almost handed customers to a wave of local brands whose founders learned production on the job and built businesses from scratch — some of them years before the EGP moved. Century-old manufacturers met the same shock from the other end: a carpet house that says it now sells on service, not price, and a textile mill that imports almost everything it uses.

IN CONTEXT- The EGP was first devalued in March 2022, after the Russia-Ukraine war set off an FCY squeeze — that was arguably already underway — and again that October as the central bank opened IMF talks. The March 2024 move broke the peg: a single-day devaluation of roughly 38%, announced alongside a 600 bps rate hike and the CBE’s decision to let the market set the rate, and accompanied by a larger IMF loan package. Each time, the official rate lagged the parallel market, USD ran short for importers, and the government held the line longer than the market thought sustainable.

USD/EGP now trades around 53.5, up from about 15.7 at the start of 2022. The EGP has lost more than two-thirds of its USD value.

Local brands still paid for the EGP’s fall through imported yarn, dyes, fabric, and spare parts. The difference was in how much of that cost they could absorb and how much they passed on to customers.

Meet the founders

Malak Hany bounced through agency internships in Zamalek before joining the workshop of a Cairo fashion designer who hired her for social media and ended up teaching her garment production. She launched The Front Row Studios in November 2023 with EGP 250k in savings. She kept her Maison Pyramide salary running while the brand reinvested its revenue.

Reem Hamed trained in Italy and launched Ramla in 2017 with a graduation gift from her grandfather and twelve pairs of shoes sold to friends. Part of her family is in textiles, and the family factory still does her embroidery. She kept her interior-design career running for years.

Amr Kawashti studied mechatronics and robotics engineering at the German University in Cairo. He co-founded In Your Shoe in 2018, selling socks online, bootstrapped on roughly USD 2k. The brand’s focus now is GCC expansion.

Amina Khalil trained formally in fashion design in London, interned abroad, and came home in 2009, years before any of this was a trend. She built Amina K after landing a placement order from Beymen. It now has about 15 staff.

Farah El Ashiry made evening gowns before she launched Fufa in August 2014. She paid for its first collection, a 42-piece beach line, with income from that work, and the first batch sold right away.

An ecosystem that didn’t exist

The industry had to be built before it could be joined. Khalil, the longest-running of the four, says that when she started Amina K some 16 years ago, suppliers and factories “were not accommodating to a small brand with small quantities,” she says. Her orders were small but recurring, and some suppliers warmed. Production was another matter: no one would run her quantities, so she built her own workshop, one worker and one machine at a time.

Now, she says, there is “a healthier industry of suppliers and workshops and factories that are accommodating to smaller brands. This is why a lot of brands are able to come up now.” Stylists, photographers, and visual merchandisers have followed, in specialist roles that barely existed when she started.

Part of that came from a weaker EGP. Export-oriented factories like denim mills and basic workshops — suddenly less interested in shipping abroad as the EGP weakened — discovered a domestic market willing to place the small orders they used to turn away, Khalil says. El Ashiry, Fufa’s founder, puts it down to demand. More small brands pushed bigger workshops to adapt to smaller quantities, she tells us, “but the cost of production definitely is much higher.”

A century-old mill makes the same point from the supply side. Hesni Textiles, founded in 1898, works with “a growing number of newer local labels” alongside established brands, says Nayla Tahan, who founded its retail arm Nillens.

Meanwhile, Hamed made full domestic sourcing the entire point. “Nothing is imported,” she says of Ramla, “which is another challenge.” Its tagline is “Born in Egypt.” When materials ran short after the devaluation and people told her to produce abroad, she says Ramla looked into it and decided it was “against my values.”

Local hides a lot of imports

Almost everything Hesni Textiles uses in manufacturing is imported, from yarn and dyes to chemicals, machinery, spare parts, and laboratory equipment. The business is “very exposed to the USD,” says Nayla Tahan, who founded its retail arm Nillens. “Any movement in the exchange rate has a direct impact on our costs.” Exports, which began a few years ago, still make up a smaller part of the business, she says.

Carpets Kahhal Looms sells as “100% local material, 100% hand-made” still carry USD costs. The factories that supply its yarn buy dyes abroad because Egypt doesn’t produce them, CEO Mohamed El Kahhal tells us, and their spinning machines run on imported spare parts. He calls that the suppliers’ problem. “Obviously, these things raise the cost for us, too.”

Even local mills price off the USD, El Ashiry says. She expected lower prices when she worked with a local fabric manufacturer, but one of the inks in the fabric was imported, which “changed the entire pricing model,” she says. Delivery took longer too, because the ink wasn’t always available.

Even Amina K’s local share has imports inside it. Khalil estimates 60% to 70% of her materials are local but says she buys from Egyptian suppliers who, she thinks, import cloth from India and China, and that the thread and dye behind local linen and cotton come from abroad. Zippers, trims, and buttons are not all made locally either.

In Your Shoe sources about 70% of its materials locally and 30% abroad and has pushed the local share up on purpose because “it improves flexibility, reduces currency exposure, and shortens lead times,” Kawashti says. Front Row Studios imports fabric for its marquee pieces from Turkey and France, and once from India. That fabric is “very expensive,” Hany says.

“Materials, by definition, are global; no single market holds the world’s supply of raw inputs,” Heba Makhlouf, CFO of Creative Investments Holding, which invests across fashion, food, hospitality, and lifestyle.

The shock that opened the gap

Ramla posted no positive earnings for at least two years because it chose to hold prices down, Hamed says. “I didn’t want to change the prices dramatically. I still wanted the customer to buy into my product.” She says she couldn’t hold that line for long as losses piled up and chose new products over raising prices on existing ones, adding a bag line.

In Your Shoe has raised prices more slowly than its costs, Kawashti says. “Pricing has increased, but nowhere near the pace of input costs,” he says. “Our philosophy has always been to absorb as much as we reasonably can without compromising quality,” he added without saying by how much.

Meanwhile, Amina K took the other route: it repriced, and its customer changed. Linen that cost EGP 60 a meter can now run EGP 400 to 500, Khalil says, and wages rose as new brands bid for skilled workers. A hire she could once afford at EGP 6k a month, for example, now wants EGP 15k. She raised prices gradually and says some clients stayed through the increases. “If my customer cannot afford it, then I need to change my customer.”

Fufa has also had to rework its pricing “a lot,” El Ashiry says, and planning is the hard part. “We never know how [to] adapt for what’s next,” she added, without specifying how much prices moved.

Manufacturers have less room. “We try to adjust our prices accordingly, but it’s not always possible to do so immediately, especially in the local market,” Tahan says.

Selling on service vs price

Kahhal Looms, a family carpet business operating in Egypt since 1871, says its customers don’t move with the currency. “We are not a product that if you change 50 piasters, or 50 cents, you’ll find a massive jump happened,” CEO Mohamed El Kahhal says. “It’s not a very price-sensitive market.” He puts that down to the clientele: Egypt’s A-class, who might buy a handmade carpet twice in a lifetime and shop on service and craft rather than price.

That doesn’t mean Kahhal’s costs stayed still. Labor is “a huge part of our cost structure,” and electricity and transport have climbed. The company used to reprice once a year. Now, it’s every six months, with limited forward visibility. “It’s not just devaluation against the USD,” Kahhal says. “It’s more inflation than currency.” The two are hard to separate in practice.

The sharper shift is on the buyer side. Hend Kahhal, who runs the business with Mohamed, says that 10 years ago a client could furnish a whole house from the top collection. Now buyers mix and match, decisions take longer, and the company offers freehome trials. Carpets come last in a house, Mohamed adds, “when the buyer has exhausted all that he has.”

Kahhal Looms’ USD revenue is now about 10% of the business, down from 60% a decade ago. The decline, Mohamed says, has more to do with India’s state-backed push into handmade carpets since the 1980s than with Egypt’s currency moves — the London and Hamburg partners that once bought from Kahhal have become design companies that outsource to India. The company now positions itself on brand rather than product to avoid being compared on price with Indian manufacturers.

Salaries and family money funded it

Every founder started on savings, family money, or earlier earnings. Two kept a day job running alongside.

Malak Hany launched Front Row Studios while working at Maison Pyramide and lived on that salary while the brand reinvested its revenue. It covered its costs in about six months, she says, and doubled her EGP 250k within a year. Her father lent her EGP 30k for packaging that ended up costing EGP 45k, on condition that she paid it back.

Reem Hamed’s grandfather gave each grandchild a small gift on graduation, and she put hers into Ramla. She kept her interior-design job for years; she says the brand has run on its own money for about two years.

Khalil started with EGP 50k from her father and put gain back in. She says Amina K has run fully on its own revenue for about four years. El Ashiry put profit from her evening-gown business into Fufa’s first collection.

Investors have come knocking on several of these founders’ doors, but most have turned them down. Hany says she has at least a decade before she’d consider it: “I don’t want to have to perform a certain way and have someone to answer back to.” Khalil says investors “all want a certain growth that I don’t want.” Hamed turned investors down in her first years and took an equity-free Fashion Trust Arabia grant in 2024; what she wants now, she says, is operational help, not capital. Kawashti says he has talked to investors. “Capital only makes sense if it accelerates a strategy that already works.”

Family businesses want to remain just that. Kahhal Looms is entirely family-owned: “to bring in investors, other things will change.” And Hesni Textiles has grown through reinvested profit, family capital and bank financing, Tahan says.

“This is not a category built for venture-style timelines,” says Heba Makhlouf of Creative Investments Holding. “Brands compound; they don’t spike.” Her fund is structured as a long-term platform instead of a fixed-life vehicle. VCs, meanwhile, are playing a different game. And for most VCs, fashion barely registers: It falls outside Plug and Play’s tech- and software-focused investment mandate, while Flat6Labs has made just one bet on the sector — Reform, back in 2014.

What happens when the EGP recovers

Even the founder most committed to local sourcing isn’t sure it’s sustainable. “If we want to grow and expand, you need also to be having the mindset of being developed and up to date with what’s available,” Hamed says. “I’m not sure if we can sustain on having always things from Egypt, but I hope so.”

And a stronger EGP could still tempt some shoppers back to imported brands, Kawashti says, though he doesn't expect a broader shift away from local brands. “Price opened the door, but the product is what keeps customers coming back.” Khalil points to convenience and identity: Buyers who try a local brand tend to come back for the ease of it, she says, and because they want something that isn't what everyone else wears.

For manufacturers, the bigger concern is predictability. “What matters most is stability and predictability, rather than the EGP moving in either direction,” Tahan says. Makhlouf agrees that a predictable exchange rate “matters enormously,” but argues that cost isn't what ultimately makes a brand competitive. “Cost comes second to creativity, authenticity, storytelling and a genuine connection with the target customer,” she says.

What no one put a number on is how much of a brand’s total bill is priced in USDs, or at what exchange rate the math stops working. Khalil and Kawashti gave materials splits, Hesni says nearly everything it uses is imported, but nobody offered a cost breakdown.