With the 2016 Summer Olympics Games just around the corner the Latin
American market is under the looking glass, creating new opportunities for
fashion businesses both domestic and from abroad. FashionUnited takes a
closer look at fashion companies to watch in Latin America.
After the economic slowdown negatively impacting the fashion industry
in both North America and Europe, Latin America and the Caribbean are
slowly emerging as potential growth markets driven by increasing domestic
demand, economic growth and purchase power. No wonder investment
possibilities in Latin countries such as Brazil, Mexico, Argentina,
Colombia, Venezuela, Chile, Peru, Ecuador, Dominican Republic and Uruguay
are abundant.
The popularity of the American lifestyle and the strong influence of
the United States on culture and consumption in Latin America first wooed
fashion names like Tommy Hilfiger and Nike to launch retail operations in
Mexico and Brazil. Later in the 90’s Spanish fashion verticals like Inditex
and Mango changed the way people in Latin America shopped, pushing domestic
fashion retailers to focus on product quality and offering.
While well-known global fashion companies began establishing a strong
presence in the Latin American market, local fashion brands have also been
able to create a solid foothold elsewhere. These include Brazilian shoe
brands Melissa and Havaianas, which are now some of the biggest Latin
American brands in the world.
Let’s dive into the world of the most important and internationally
active brands that originate from Latin America.
Company: Alpargatas. Became world leader by fashionising the humble
flip-flop.
Founded: 1907
Headquarters: São Paulo, Brazil
CEO: Marcio Luiz Simoes Utsch
Brands: Havaianas, Topper and holds a 60 percent stake in Osklen
Manufactures shoes for: Dupé, Rainha, Mizuno, Timberland and Sete Léguas
Turnover: 1.2 billion dollars or 4.1 billion real (2015)
Retail footprint: 686 stores and products sold in 106 countries
Way back in 1883 two immigrant Argentines, Juan Echegaray, who hailed
from Spain’s Basque region, and Robert Fraser, a Scotsman whose family was
in the textile business, formed a partnership to manufacture low-cost
footwear. In 1907, the company set up a unit in Sao Paulo, Brazil. It
produced Alpargatas Roda (espadrilles) and Encerado Locomotiva (boat shoes)
in its plant based in the Mooca District, in São Paulo.
Today São Paulo Alpargatas Company S.A. is known worldwide for a whole
different type of shoe, namely the colorful flip-flop branded under the
name Havaianas. According to the 2015 best companies in Brazil survey
listed on Istoé Dinheiro corporate guide, Alpargatas is among the largest
companies in Brazil and placed at number 169 of 1000 companies based on
revenue. Among the best evaluated companies, Alpargatas received two
trophies for Corporate Governance and Clothing, Textile and Footwear.
The mother company of Havaianas currently boasts an operating income of
652 million reals (198 million US dollars) and is about to open doors to
five new stores in Miami, Los Angeles, New York, New Jersey and Las Vegas.
Meanwhile the company is pushing European distribution of its Havaianas
sandals at well-known department store chains like Selfridges, Galeries
Lafayette, KaDeWe and El Corte Inglés. This year Alpargatas expects to
report an increase of 20 percent on last year’s revenues of 4.1 billion
reals (1.2 billion US dollars) and aims to expand retail presence of
Havaianas and its other footwear brands in 80 international markets.
But it’s not only blue skies in Brazil. Last year the company slashed
product prices to boost domestic demand amid stiff competition. With new
launches and competitively priced product styles under the Havaianas label
the company is now trying to get consumers back.
Analysts consider Alpargatas a safe investment thanks to its
cost-cutting strategy and solid international expansion. Alpargatas’
initiatives to increase sales of other brands under its portfolio including
Rainha, Topper and the licensed Japanese Mizuno label seem to be paying off
as well. J&F Investimentos SA, which manages investments for Brazil’s
billionaire Batista family, recently acquired a controlling stake in
Alpargatas.
For the Olympics season, Havaianas has created a series of Rio-inspired
flip-flops. Brand marketing opportunity at the forthcoming Rio 2016, where
Havaianas will enjoy an official presence, can further boost its
international recognition and possibly exceed the number of 12 million
pairs of slippers the company sold last year.
Company: Grendene. One of the world’s largest footwear manufacturers.
Founded: 1971
Headquarters: Brazil
CEO: Rudimar Dall’Onder
Brands: Melissa, Zizou, Ipanema, Grendha, Zaxy, Rider, Cartago,
Grendene Kids.
Turnover: 804.9 million dollars or 2,630 million real (2015)
Retail footprint: 60,000 international sales points and 65,000 in Brazil
Grendene was founded in 1971, also in Brazil, and today is one of the
world’s largest footwear producers. Although the company name might not
immediately ring a bell, you will surely have heard of brand names like
Melissa, Ipanema, Cartago and maybe of Grendha, Zaxy, Rider, Pega Forte and
Zizou as well. The company has integrated its operation completely and owns
six production locations and 11 footwear factories with a combined
production capacity of 250 million pairs of shoes per year.
Named after its founders, twin brothers Alexandre and Pedro Grendene
Bartelle, Grendene is known for its shoes made of PVC and EVA and endorsed
by the likes of supermodel Gisele Bundchen. She joined hands with the label
in 2002 to launch her own line of affordable flip-flops called Ipanema
Gisele Bundchen. The line became a hit in Brazil as well as abroad and
proved to be major competition for the Havaianas brand.
Almost 25 million pairs of Bundchen’s jelly sandals are sold each year
and accounted for more than 60 percent of Grendene’s annual exports valued
around 250 million dollars last year. The company has been focusing on
wooing not only the middle-class domestic consumers but also high-income
clients with the Melissa brand that has become a fashion-icon because of
collaborations with designer Karl Lagerfeld and architect Zaha Hadid.
The company reported a 7.1 percent rise in revenue in the second
quarter of fiscal year 2016, with net profit increase of 4.9 percent.
Grendene has approximately 60,000 international sales points and 65,000 in
Brazil.
Company: Lojas Renner, second largest Brazilian department store and
clothing company
Founded: 1912
Headquarters: Porto Alegre – Rio Grande do Sul, Brazil
CEO: José Galló
Brands: Renner, Camicado, Youcom
Turnover: 1.8 billion dollars or 6.1 billion real (2015)
Retail footprint: 284 stores, 72 Camicado units and 52 Youcom stores
In 1912 Antônio Jacob Renner founded the A. J. Renner Group, also in
Brazil. The factory manufactured and sold wool overcoats. Soon the coats
became a wardrobe staple in Gaúcho de Campanha (the pampas area of the
state of Rio Grande do Sul) for both traveling salesmen and urban citizens.
Lojas Renner opened its first shop in 1922. With the introduction of a
broader product mix in 1940 the shop became a department store. In 1965,
Lojas Renner S.A. was founded and in 1967 became publicly listed.
Lojas Renner underwent a complete restructuring at the end of 1991. The
full line department store model was substituted by the concept of a
department store specialising in fashion goods. In 1994 the company
ventured out of the state of Rio Grande do Sul, by opening stores in
Florianópolis, Joinville and later in Curitiba, Paraná. Followed by
openings in São Paulo, Sorocaba and Guarulhos.
In 1998 American retail company J. C. Penney acquired a controlling
stake in Lojas Renner. In May 2011, Lojas Renner acquired Camicado, a
company in the home decor segment and in 2013 launched Youcom, a new
business model focused on the younger generation in a specialised store
environment.
Today Lojas Renner operates 284 stores, 72 Camicado units and 52 Youcom
stores. A large majority of those stores are located in shopping centres.
Renner designs and sells apparel, footwear and underwear, accessories and
cosmetics. Lojas Renner organizes its collections according to lifestyles,
offering a wide range of clothing which include formal and casual product
lines. The brand offers current fashion at accessible prices in order to
reach the middle class.
After the Senate voted to suspend President Dilma Rousseff in May 2016
paving way for a new government, shares of Lojas Renner SA rose to the
highest in seven weeks after announcing an increased expansion target and
the commencement of operations in Uruguay. In its second quarter results
announcement, the company said it recorded 8.2 percent growth in net
revenue to 1,464.7 million real (449.6 million dollars).
Company: Liverpool, leading department store chain in Mexico
Founded: 1847
Headquarters: Mexico
CEO: Graciano Guichard G
Brands: Liverpool, Fabricas de Francia, Liverpool Duty Free
Turnover: 4.3 billion dollars or 81.2 billion Mexican pesos (2016)
Retail footprint: 113 department stores in Mexico and 25 shopping malls
El Puerto de Liverpool S.A.B. de C.V. or Liverpool was founded in
Mexico and is one of the largest department store chains in Latin America.
The company now operates 25 shopping malls including Perisur and Galerías
Monterrey. There are 113 department stores of which 80 are Liverpool format
stores, 29 Faìbricas of France, four Duty Free stores and 91 specialty
boutiques.
Liverpool – which was called The Cloth Case at first – was founded by
Jean Baptiste Ebrard, a Frenchman who started selling clothes out of
suitcases in downtown Mexico City’s. In 1872, he started importing
merchandise from Europe, which was shipped via Liverpool, England,
prompting him to change the company’s name.
In July 2016 the company announced that it reached an agreement to
acquire Chilean retailer Ripley in a deal that values the company at 813
billion Chilean pesos (1.2 billion US dollars). The acquisition of Ripley,
which has 69 stores in Chile and Peru, is an expensive one but according to
analysts the deal offers an opportunity to improve operations and add value
for Liverpool.
Company: Arezzo – Leading Brazilian women’s footwear brand
Founded: 1972
Headquarters: Belo Horizonte, Brazil
CEO: Alexandre Café Birman
Brands: Arezzo, Schutz, Anacapri and Alexandre Birman
Turnover: 349.8 million dollars or 1.14 billion Brazilian real
Retail footprint: 488 franchises and 48 owned stores
Founded in 1972 by the brothers Anderson and Jefferson Birman in Belo
Horizonte, Brazil, Arezzo enjoys a leading position in the women’s
footwear, handbags and accessories segment.
The company sells over 10 million pairs of shoes per year, besides
handbags and accessories and has a strong portfolio of brands like Arezzo,
Schutz, Anacapri and Alexandre Birman under its fold.
The company’s retail network consists of 488 franchises in more than
160 cities in Brazil and 48 owned stores, of which 11 are flagships. Now
Arezzo has planned an aggressive retail expansion in the US market and
opened a first Los Angeles store of the Schutz brand in April. After
gauging response to its debut launch, Arezzo aims to make a nationwide
rollout of at least 30 stores in 2017.
Witnessing a slowdown in demand in the Brazilian market, the company is
keeping its focus on expansion in foreign locales, after combined export
revenue of its four brands rose 67 percent in 2015.
pictures:havaianas,facebook/melissa,schutz,facebook/lojas
renner,facebook/liverpool