Eastern promise
Italian footwear group Sergio Rossi is betting big on Asia with a new direction in its 70th year. Its CEO has placed great emphasis on sustainability, with the factory now running on green energy.
On the first anniversary of the death of its founder from complications due to covid-19, footwear brand Sergio Rossi has announced a new direction in its 70th year. Speaking at MicamX, the digital version of the Milan footwear show, its CEO, Riccardo Sciutto, said he will pull the company closer to its growing markets in Asia. “We always want to find a new strategy and new direction. Asia is the present and the future,” he said. “You need to fly very high and very low. Very low is touching the quality of the shoes, the concrete way, but very high is to follow the dream and try to move the company over there."
There is no word of a relocation in either company statements or the press, so perhaps the comments are merely a demonstration of how crucial Japan and China are deemed to be to sales growth. The company has been focusing on China for a few years: at the end of 2018 it partnered brand management and distribution house Luxba Group to boost sales among Chinese millennials. Luxba manages the Chinese strategies for companies including Moschino and DSquared2, and Chinese press has reported that the group can be key to cracking a market already filled with luxury offerings.
“We relaunched the brand aiming to stay true to the DNA and heritage of Sergio Rossi, keeping in mind the modern woman of today and allowing us to communicate to a new, fresh audience: it is crucial to keep in mind the tastes and preferences of the Chinese millennials,” said Mr Sciutto. At that time, Sergio Rossi had 10 locations in China, but has since opened stores in Beijing, Shanghai, Hong Kong and Chengdu.
Pulsating heart
Founder Sergio Rossi began making shoes in the 1950s in San Mauro Pascoli in Italy, following in his father’s footsteps, and created his brand with his brother in 1968. In the 1970s, he provided shoes for Gianni Versace’s catwalk shows and became renowned in fashion circles and synonymous with ‘Made in Italy’ excellence.
While the headquarters and offices are based in Milan, the “pulsating heart” is the factory in San Mauro Pascoli, where more than 1,000 shoes are created by hand each day by 150 skilled artisans, 65% of whom have been with the company for more than a decade. Ninety-five per cent of suppliers are based in Italy, a quarter are from the local district and all leather is from Italian tanneries. “Leather is the most important material of our production, not only for quantity and value, but also because it defines the style of Sergio Rossi’s shoes,” said the company.
The plant, inaugurated in 2003, is equipped to sketch, design, develop and produce all types of women’s luxury footwear, from flat styles to high heels, as well as to shorten the time-to-market, increasingly oriented towards a “see now, buy now” model. The plant includes two production lines, two warehouses, a prototype department and a logistic hub, capable of dispatching up to 5,000 pairs of shoes per day all over the world.
Private equity
The company was bought by Gucci in 1999, by luxury group Kering in 2005, and then sold to private equity firm Investindustrial in 2015. The firm brought in Mr Sciutto and Andrea Morante (as president) from Kering jewellery brand Pomellato to change its direction and renew a push into international markets.
Mr Sciutto reshuffled the head office teams, from the design to communication, and says he put San Mauro Pascoli Factory back “at the centre of the story”. He instigated seasonless collections and launched the sr1 collection based on classic designs. The sr1 slipper, the first model introduced, recalled the daily flat shoes that marked the first success of Sergio Rossi, while the sr1 pump was a tribute to the allure of the 90s’ supermodels.
“The greatest challenge when I arrived was rethinking the factory at the centre of the process,” explains Mr Scuitto. “We need to balance heritage and innovation. My motto is ‘think heritage, play digital’. The magic of the artisan makes me very proud, but at the same time we need to work on the digital side, selling online.”
The brand relaunch also included a new store concept, replicated around the world, to create an “experiential environment” for customers, as well as a huge marketing push on Western and Chinese social media. He introduced the first sneaker collection in 2019, hiring new artisans and developing new manufacturing expertise to keep the quality in line with the other styles.
Part of the men’s collection and the cutting phases were internalised to centralise the production, adding new cutting machines so 70% could be done in-house. “By doing so, we ensure to pass on the knowhow from generation to generation, spreading a sustainability mindset among our artisans while having an almost complete ownership of the cutting process,” he says.
Green energy focus
Mr Sciutto introduced sustainability measures and reporting, focusing on three angles: human capital, local community and energy. In the company’s 2019 sustainability report, it sets out its human targets as: training, attraction and retention of best talents, and welfare, health and safety. Local community goals are stated as: preserve local artisanal traditions, quality of living and socio-economic development of local communities, and philanthropic activities. In 2019, representatives from the Lineapelle exhibition directed a leather course at the factory, teaching technicians and other employees about the tanning process and chemistries to deepen their knowledge.
Sergio Rossi is also a signatory to the United Nations Global Compact and the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development. It has worked hard over the past few years to reduce energy consumption, investing in its infrastructure and installing 3,500 square meters of photovoltaic panels on the roof, as well as substituting all halogen lamps with LED models.
The company reduced energy consumption by 18% in 2019 compared with 2018 (29% compared to 2015) and cut greenhouse gas emissions linked to business travel by air, train and rented cars by 30%. Since January 2020, all energy used in the factory has been from renewable sources. “Sooner or later, customers will ask for this,” adds Mr Sciutto. “It’s impossible to do everything, but if everyone can do their best, we will make a better world.”
Changes afoot
The company now has a worldwide distribution network of 65 stores, of which 50 are directly owned flagship stores in prime luxury locations, and ships to 85 countries. Revenues in 2019 were €67 million, 14% higher than the year before.
Mr Sciutto says that partly due to the coronavirus pandemic, the future looks very different. “The market has changed drastically, so have we. We will never come back as before, we will be different. My goal is to be ready for the restart. We need to be much more flexible and quick.”
Despite the changes, staying true to the company’s heritage and roots appears to be key to success, building on the legacy of the founder and the strength of the name. His death in April 2020 was met with sadness and tributes from footwear greats around the world, praising his generosity, drive and vision. “The great maestro is always our reference,” concludes Mr Sciutto. “We want to take his incredible heritage into the future.”
Image: There are up to 120 steps required in the production process.
