Can Budapest become the Paris of the East?

There was more discussion about luxury and fashion in Hungary in the first half of the year than ever before. The reason why even those otherwise not interested in fashion started paying attention to the subject was thanks to the Birkin bags of Antal Rogán's (head of PM Orbán’s cabinet) wife worth tens of millions of forints, the highly expensive accessories worn by Ádám Matolcsy (of MNB scandal fame) and his wife, or the million-forint Dolce & Gabbana pants worn by Andrea Várkonyi (wife of the wealthiest Hungarian, Lőrinc Mészáros, who is also PM Orbán’s childhood best friend), and Ráhel Orbán's 2.8 million-forint bracelet.

Wearing expensive pieces of world-famous French, Italian, and American high fashion brands is clearly a sign of one's luxurious lifestyle, but Hungary actually has its own state fashion agency and an official strategy called the National Fashion Industry Strategy 2030, which, incidentally, has reached its halfway point this year, in the sixteenth year of the NER.

The objective is precisely to direct attention to the work of Hungarian designers. It was for this purpose that seven years ago, the government established the Hungarian Fashion and Design Agency (MDDÜ) and has so far poured a total of 11 billion forints into the domestic creative industry, which, according to Ministerial Commissioner Zsófia Jakab, who heads the agency, accounts for nearly 3 percent of Hungary's GDP. We looked into how useful Hungarian designers have found the programs of the state fashion agency.

How will Budapest become the Paris of the East?

The strategy for the period between 2020–2030 was approved in July 2021. It aims to completely revitalise Hungarian fashion and is headed by the friend of the prime minister's eldest daughter, Ráhel Orbán. In an interview given five years ago, the head of the Hungarian Fashion and Design Agency, Zsófia Jakab, who has since last year also served as Ministerial Commissioner for the Development and Coordination of the Creative Industries, said, that "we intend to play the same decisive role in the region that Paris has to the west of us." (Of course, the creative industry is not limited to fashion; it includes all activities based on individual creativity, talent, and intellectual property, such as design, film, music, and architecture.)

Jakab's original vision was for Budapest to become a center for fashion in Central and Eastern Europe by having the state fashion agency organize events in which many up-and-coming, younger brands could participate. However, according to them, the basic idea behind the concept reaches beyond fashion: according to the national fashion strategy, fashion – as part of the culture – can strengthen the country's image and has the potential to attract tourists, which will contribute to domestic economic growth in a way that will be clearly visible in financial data.

In other words, according to this strategy, if Hungary has cool fashion, design and creative industries, this will increase its appeal as a tourist destination, which justifies state involvement and makes it well worth spending money on.

The government seems to believe in this, otherwise the Minister of National Economy, Márton Nagy would not have appointed Zsófia Jakab as ministerial commissioner. Jakab has, since then, also been tasked with overseeing the Hungarian Design Council (Magyar Formatervezési Tanács or MFT). They have already organized a creative industry forum, where the minister said that the government's goal is for Hungary's economic development to reach 90 percent of the EU average by 2030. In his view, "dynamically expanding and developing sectors such as the creative industry will have a key role to play" in this. Márton Nagy believes that this is the industry of the future and could be one of the drivers of economic growth. He justified this by saying that the gross value added by the related sectors doubled between 2010 and 2022.

What was the money spent on?

MDDÜ has so far received 11 billion forints (nearly 28 million euros) in state subsidies. We reviewed the publicly available 200-page list of expenditures to find out where the money had gone. It shows that most of the money was spent on communication, primarily on advertising.

The state fashion agency has signed 21 communication contracts with Antal Rogán's preferred companies for such purposes: New Land Media and Lounge Group, as well as Mediator Group, which also regularly wins state tenders. The combined value of these contracts over the past six years amounted to 7.4 billion forints. The MDDÜ signed contracts worth a total of HUF 1.5 billion with Gyula Balásy's companies, New Land and Lounge, and HUF 5.1 billion with Mediator. One of the contracts included in the latter is worth HUF 1.5 billion and is valid until July 2026. Surprisingly, we found a HUF 155 million contract and an HUF 8.7 million item from 2019 for one of the state fashion agency's favoured events, the Budapest Central European Fashion Week (BCEFW), with the latter amount spent on the rental of the venue, Várkert Bazár.

According to the MDDÜ, the primary tool for promoting Hungarian fashion is the annual Budapest Fashion Week, but the staging of this event only accounts for a fraction of the huge expenditure. Among the more significant items, however, is the monthly rent of 3.1 million forints for the agency's office on Istenhegyi út. Compared to this, the rent for the Hungarian pavilion at the 2019 Milan Fashion Week seems almost trivial, at EUR 30,000, or roughly HUF 12 million.

Other notable items are the 363.5 and 399.5 million forints paid to Antenna Hungária, totaling 763 million forints. The published list also reveals that hundreds of millions of forints were spent on car rentals, travel arrangements, office rentals, and recruiting interns.

A grandiose vision and immeasurable arrogance

This means that three quarters of the 11 billion forints of state funding were spent on communication. The agency commissioned more than twenty communication projects altogether, with the majority of the framework agreements awarded to two advertising agencies that regularly win state tenders for state and government advertisements with political content.

These advertisements, announcements, and activities are currently not visible on either agency's public platforms, even though both like to boast about the work they’ve done so far on their websites. We contacted both agencies through various channels, and although they promised to respond to our questions, this has not happened even after a very long wait, so it remains unclear exactly which Hungarian brands' and designers' work was advertised for billions.

According to one of our sources familiar with the advertising market, a budget of 1.5 billion forints would allow for the creation of an advertisement that could win a prestigious international advertising award. "This is how one should imagine this: if the budget for an advertisement is 100 units, 15 of those are spent on creativity and production, and all the rest is for media appearances," another source who also asked to remain anonymous said: “If there were 1.5 billion forints' worth of media appearances on objective platforms behind this spending, I would consider that realistic. In this case though, I’ve seen no such thing.”

In their opinion, the above amounts are not out of line with the market, so this is not where the problem lies. "Rather, the problem is that there was a grandiose idea combined with immeasurable arrogance. On top of that, they managed to round up all the self-appointed experts who felt they had insight into this market, but then the free money killed the competition." Our source also acknowledges that advertising and communication expenses do not only mean advertisements, but can also include inviting celebrity guests to the Budapest Fashion Week or other events.

Even though the results of advertising expenditure are not yet visible, a mentoring program for fashion designers has definitely been launched, and the Fashion Weeks held in the capital have also continued. To find out how much these events have been of help to the brands, we spoke with leading Hungarian designers to find out how they have been benefiting from the national fashion strategy and what changes they have noticed. We spoke in person with Péter Baldaszti, co-owner and CEO of Nanushka, and reached Dóra Abodi, the designer behind Abodi, and Kati Zoób by email. Several Hungarian designers either rejected our request for an interview or did not respond, while a few asked to remain anonymous and shared their experiences that way.

“What they're doing is bullshit,”

one of Hungary's most successful designers said, who prefers to stay away from the MDDÜ because they consider both the strategy and the whole agency unnecessary. "Hungary hasn't had any exports in the area of the light industry since the 1990s, there's no textile industry, and the current setup just isn't suitable for the country to become a fashion superpower.

The idea that it is possible to make up for decades of shortcomings in just a few years is completely detached from reality, and what the MDDÜ is doing is just window dressing. Bringing up the Budapest Fashion Week at a dinner party in Paris might sound good, but in reality it doesn't contribute anything to the success of Hungarian designers or fashion. And those few appearances in the press also aren't worth much."

All too often, the trips abroad that the MDDÜ sends designers on are completely useless. "They dragged us around month after month to various showrooms and exhibitions that did nothing to help us build a successful brand. But these trips cost the agency – and therefore the Hungarian state – a lot of money" – a designer who participated in the program for a while and wished to remain anonymous told Telex.

What's more, designers are expected to be 100 percent loyal. It is well known in professional circles that a Hungarian designer was kicked out of the mentoring program because they were approached by a newspaper labeled as "an opposition outlet" for an article which ended up never being published. "This made it clear to everyone: you do not talk to non-government-friendly media," another designer recalled.

It is delightful that Budapest has been able to join in on this

Not everyone is so critical of the program. "The international fashion market is complex and involves many components; success depends on numerous factors, thus, any strategic support is extremely important for domestic designers in this industry. It is a long process in which one can only move forward step by step, and it's good that we have embarked on this path," fashion designer Kati Zoób, who has won multiple awards and is the creator of the Katti Zoób fashion brand, and is currently a member of the Hungarian Design Council opined. Zoób's company previously received 811 million forints of funding from the Hungarian Tourism Agency for the project of a museum of fashion, but the decision-making process was criticized by many as it lacked transparency. Last year the fashion designer told Alinda Veiszer that she had received a lot of heat on account of the state funding and added that she had not expected this kind of criticism. In her opinion, the public funds used to finance the Hungarian Fashion and Design Agency are helping promote the country.

According to Zoób, the fashion industry is no longer concentrated in only one city; it has countless important centers, from Seoul to Copenhagen to New York. "It is delightful that Budapest has also been able to join in on this, for example with the Budapest Fashion Week," she said. According to Zoób, Hungarian designers are becoming more and more visible abroad, "one only has to consider that more and more A-lister celebrities have been wearing the creations of Hungarian designers on the red carpet.”

Why did Nanushka and Abodi succeed?

It is not at all impossible for a small country to produce a globally influential brand within a few years, or even to connect a nation with fashion. The Danish brand Ganni has done just that. While until the mid-2010s only insiders knew about the playful, unique, sustainable, and easily recognizable brand, today it is worn by stars like Taylor Swift or Bella Hadid, and thanks to its affordable prices, by multitudes around the world. Ganni's success has also been good for the Copenhagen Fashion Week, and has helped put the Danes on the fashion map.

We also have some brands which are globally visible. Pécsi Kesztyű is one example in the niche market, with their products having been worn by the likes of Rihanna or Lady Gaga. The son of Will Smith chose to wear a vampire castle hat made by Abodi to the Grammy Awards, while Aimee Lou Wood, the star of The White Lotus was recently photographed in a Nanushka piece, but Nicola Coughlan and Bella Hadid have also worn their designs.

Nanushka is the only Hungarian brand that is known and recognized worldwide in the world of fashion. After all, to achieve long-term global success, it is not enough for a designer's pieces to appear on the red carpet once or twice. The brand must regularly be featured in influential fashion magazines and be available worldwide, even in major online stores such as Farfetch (Other than Nanushka, Dóra Zsigmond is the only one who has achieved this for a time; she mainly designs and manufactures men's clothing), and it also needs to have stores in a few major cities in addition to its flagship store. This is because beyond a certain point, success doesn’t only depend on the designer's talent, but also on the capital invested, perseverance, luck, and business planning. This is where MDDÜ would step in to assist.

Péter Baldaszti, the CEO of Nanushka, told Telex that they are cooperating with the MDDÜ, "because Budapest plays a very important role in Nanushka's identity." They would like to emphasize this by bringing even more foreign partners here for the BCEFW shows.

He added that the BCEFW advisory board often asks for his opinion on brands invited from abroad, and at a previous event in Milan, they tried to mobilize their network of contacts.

"This is how we collaborate: they are a state actor, and their job is to try to elevate all businesses in this market. We are much bigger than those they are working with. So we collaborate strategically, but helping us is not part of their job”.

That being said, there are some opportunities created by the MDDÜ that are also useful for Nanushka. According to Baldaszti, the agency's work is very important, and other countries are doing the same thing – only with much bigger budgets. “Naturally, if we convert it to forints or compare the budget to average salaries, it's a lot of money. But if we look at how much it costs to organize a market-based event in Paris, the numbers are pretty shocking. Compared to international players, MDDÜ is operating on a much smaller budget.”

When we asked about the billions spent on marketing and communication, Baldaszti said that the annual marketing budget of a brand such as Nanushka is around €5 million, which is roughly HUF 2 billion at the current exchange rate. "It's a lot of money indeed, but it's not that much by international standards. I think the impact of this can't be measured directly by how many successful Hungarian brands there are today, because the MDDÜ only has a limited influence on how many successful brands there will be in Hungary." According to Baldaszti, while the Budapest Fashion Week has succeeded in consolidating the Hungarian capital's role in the regional fashion industry, it is disappointing to see how much better Prague's luxury product line-up is compared to that of Budapest.

According to Baldaszti, Budapest Fashion Week is seen as a good example in Prague. "There is no similar event in Bratislava or Prague, and I don't think there is one to the east of us either. Although there is the Mercedes-Benz Prague Fashion Week, that event is far less relevant regionally," he said.

It would be good for the brands if the elite spent their money at home. Besides Nanushka, another Hungarian brand visible abroad today is Abodi. It was Lady Gaga who brought recognition to the creations of Transylvania native Dóra Abodi in 2013, when she posed in the Hungarian designer's earrings for her Saturday Night Live promotional photos.

We asked Abodi where she, as a designer, thinks the Hungarian national fashion strategy currently stands, and whether Budapest can ever be the Paris of Eastern Europe, and if so, how."

“Perhaps this has always been an exaggerated idea, I mean, many Eastern European and Asian cities would like this title, but Budapest doesn't necessarily have to be the something of something,”

Dóra Abodi replied.

She believes that it is always good when the potential significance of the industry is recognized – just as it is in other European countries – but added that the sector is currently in a particularly difficult position. She agrees that there are two or three Hungarian designers who are known abroad, but every segment of the international scene is increasingly dominated by major international brands, such as the Parisian conglomerates.

Given that one of the key elements of the national fashion strategy is for the agency to assist Hungarian designers in establishing a presence abroad through the sharing of know-how and connections, as well as through specific support programs, we also asked Ms Abodi about the role the agency played in helping her brand become globally recognized. " We did bring in an investor 12 years ago (it was not a grant), but that chapter has ended, so now we are a brand that is independent of everyone, we have no investors. We were awarded a small EU grant two years ago. I believe that the brand's recognition is due to the many years of our professional work and the unique artistic world the brand represents. Both the investment and the grant came with certain obligations, and managing these also took a lot of resources away from the actual work.

Looking back, I feel that – given their negligible size in terms of the fashion industry – they only provided the illusion of opportunity," Abodi said. According to her, it was mainly her own obsessive professional commitment and the few people close to her who have stood by her from the very beginning that provided her with an opportunity.

According to the designer, the foundation for the success of designers in each country with a serious fashion industry is a supportive commercial sector. "We do not have this," she said. In her opinion, there should be a stronger and more professional business support environment, and in the absence of it – or in addition to it – there should be more predictable, professional, larger-scale support programs that can be tailored to specific brands, as well as a stronger international focus, both professionally and in terms of attitude.

"It would certainly be good for the (Hungarian – ed) brands if the leading figures and the economic elite associated with them stopped buying French, Italian, and American brands and would instead spend their money at home, on Hungarian brands, proudly representing and supporting the Hungarian industry with their purchases.

In my opinion, civil servants should be required to spend their clothing allowance with domestic brands. And when it comes to performing artists, the producers and film studios should place a greater emphasis on this and allocate a bigger budget on the public image of local artists," Dóra Abodi said.

Budapest Fashion Week is not a solution in and of itself

We also contacted the state fashion agency to find out whether they think Budapest is getting closer to becoming the Paris of Eastern Europe, and if so, what evidence there is to support this. They wrote that the objective of the national fashion industry strategy is for Budapest to become the leading center of fashion of Central Europe by 2030, and in their opinion, progress has been made in this direction in many areas, for example, with the Budapest Fashion Week.

“One of the most significant indicators has been the development of the Budapest Central European Fashion Week, which clearly reflects the strengthening of the domestic fashion industry. More than 150 Hungarian and regional brands have been showcased at the event, which attracts 5,000–6,000 visitors each season. In recent years, the event has attracted journalists and industry professionals from a total of 27 countries, resulting in more than 250 press appearances in the international media. In addition, more than 1,600 articles have been published about the event in the domestic press," they wrote. According to the MDDÜ, these appearances primarily put the spotlight on the brands, and according to them, the BCEFW created real visibility and opportunities for the designers to enter the market. They believe that the event has made Budapest a major player on the European fashion scene and has also become a solid connection point for professionals such as journalists, distributors, industry players, and designers from the region.

We asked fashion editor and stylist Anikó Molnár about the role of the state agency and fashion week. She believes that the BCEFW might even be effective, as there are indeed influencers and well-known fashion editors attending it.

“Unfortunately, it is doubtful that they are actually interested in what is going on in the region's fashion scene. They merely produce posts about the event – sometimes even misspelling the name of Budapest – and enjoy themselves for free in hotels owned by the organizers.”

In her opinion, there is also no visible evidence that the designers or the Hungarian fashion industry are making any serious profit from these events. Fashion shows are most useful to the invitees. If there are bigger, better-known brands involved, such as Chanel or Jacquemus, the invitees don't need to be persuaded to attend; those who get in are the lucky ones. Even though these events are much less relevant today than they were 10-20 years ago, they are still exciting affairs, with celebrities, interesting ideas, and venues.

However, countries that want to make it onto the fashion map need to put together a serious invitational package. They have to cover airfare, five-star hotels, fine dining, and other activities, as well as provide gifts for the attendees. The guests that come to these events are not the most influential players though, but rather B-listers, so they are not starting with Vogue USA or the French or English editions, but with a less important player, hoping that the main players will also take an interest in the event.

It can also happen that organisers aiming to make a name for themselves in the fashion world will pay influencers to attend an event. For instance, Bryanboy and Anna Dello Russo have visited such a Hungarian event before, but we don't know whether these were paid appearances. What is certain, however, is that those who benefit from this are without doubt the professionals whose hosts spend a few days spoiling them at a staggering cost, which, in the case of the Budapest Fashion Week, is covered from the state budget.

It cost a lot of money and it was completely pointless

Most of the designers we spoke with said that "Zsófia Jakab truly believes that this will work," but there is no fully developed strategy, and so far no one has been able to make a big enough splash to attract international interest.

"Furthermore, it is also unclear which designers are being given such prominence and on what grounds, and whether they actually have a distinctive enough identity which can be exported abroad," added one of them.

According to those involved in the industry, the problem is not a lack of drive, but of expertise. As one of them put it, the MDDÜ's activities can best be described as follows:

"It's as if a doctor had been tasked with fixing a region's pediatric emergency services, and money was no problem, so they started to plan which Disney princess should be featured on the band-aids, and focused solely on that, and nothing else."

According to insiders, many Hungarian fashion brands which have participated in the MDDÜ mentorship program are struggling to survive. Despite having received a one-time injection of capital, they were not necessarily free to manage the money as they wished, as the contract they had to sign was extremely strict. Many are predicting that certain brands are going to disappear: some believe that instead of the promised ascent of Hungarian fashion brands, their situation has actually become worse in recent years. "It cost a lot of money and it was completely pointless, at least not for us," one mentee said about the fashion strategy.

Based on the financial results of the companies distributing the creations of Hungarian designers, it appears that these firms are not exactly making waves. According to their publicly available financial reports on Opten, Dóra Tomcsányi's company, MyGarden Kft., saw its net sales decline last year (from 73 to 58 million forints), and its after-tax profit was only 1.2 million. Daige's results remained unchanged, while Nanushka generated net sales worth HUF 6.9 billion in 2023, but posted a loss of HUF 3.3 billion after tax. There was a slightly positive change at Mono Concept Kft., the company behind Nubu, which generated a profit of 8.8 million forints on sales of 167 million forints.

Our conversations with several independent actors in the industry revealed a largely unanimous opinion that Hungarian fashion would be sustainable if the country had a proper textile industry with real manufacturing capacity (our previous series found that this is currently not the case) and if all the truly influential Hungarian "power women" decided that buying and wearing Hungarian apparel was cool. In any case, the MDDÜ's next Budapest Central European Fashion Week, where several regional and Hungarian brands will present their spring/summer 2026 collections is being held in the Hungarian capital between September 1 and 7.