International -- European Business: ITALY
PULLING SUPERGA UP BY ITS BOOTSTRAPS (int'l edition)
Can a Swatch veteran make the shoemaker a global player?
Acrobats cavort onstage, while stylish Milanese visitors nibble chocolate strawberries and examine displays of footwear in imitation crocodile. It's the opening of a flagship store for Italian shoemaker Superga, and at the center of the scene is the company's 46-year-old chief executive, Franco Bosisio. The former marketing director for watchmaker Swatch is channeling his creative energies into remaking the $72 million company. "There is very little difference between selling a watch, a pair of shoes, or anything else," he says.
Such confidence is driving Bosisio's Superga strategy. He's betting he can turn the tiny company's mundane product into a hot global brand, just as he did with plastic Swatch watches more than a decade ago. Superga's canvas sneakers have long been known in Italy. For decades, they were manufactured by a unit of tiremaker Pirelli. Then, Milan's Sopaf investment-banking group bought the company and invited Bosisio to become CEO in 1995. After halving the workforce and shifting production to lower-cost Asia, he has set a firm goal: to double sales within the next four years by boosting exports to the rest of Europe, the U.S., and Japan.
To liven up Superga's range of sneakers, Bosisio is relying on the design system he pioneered at Swatch. Every six months, he forms teams of artists who work out new footware designs. He also has developed a sportswear collection, which now accounts for 20% of sales. And he soon expects to sign agreements with sunglass, perfume, and children's apparel manufacturers to produce Superga lines.
"LOVE US." The company is building an international chain of stores to showcase its shoes, which run from $40 to $80 a pair. After opening seven stores in Italy this year, Bosisio plans to open wholly owned outlets or franchises in France, Spain, Germany, and Japan in 1998. He's also rolling out an advertising campaign under the slogan "Superga: Hate us. Or love us." One ad shows a woman and a python nose to nose above the caption "I hate sin. I love the original."
That marketing subtlety may be lost on some consumers, Bosisio's skeptics say. Indeed, for all his flair, Bosisio faces problems. Sportswear giants such as Donna Karan and Ralph Lauren are expanding into shoes. And doing battle with cash-rich companies such as Nike Inc., which expects to spend $1 billion
on advertising next year, could prove suicidal. Says Stefano Mascioni, a director of Milan's National Chamber of Italian Fashion: "If Bosisio intends to go head to head with big names, he should save time and shoot himself right now."
What's more, Superga's margins are weak. The company earned 9% on sales last year--up from less than 1% in 1995 but below Bosisio's target of 20% by 1999. Some analysts doubt the Swatch strategy can be repeated in such a basic item as shoes.
Nevertheless, Bosisio insists he'll be able to spread his passion for Superga shoes around the globe. "People all over the world like the same things," he argues. Now it's up to consumers to vote him right or wrong--with their feet.By Tom Mueller in Milan