Baldinini, which recently won an Italian contest for brand equity, is trying to reduce its overexposure to the difficult Russian market, which still generated about €90 million out of its total sales of nearly €120 million in 2014.
It is now taking all the necessary steps to open its first seven stores in the U.S. in 2016. Four of them will operate in Manhattan, with good locations in prime areas such as Madison Avenue and the SoHo district. Three others will be in Miami. In addition to that, the company will open two outlets in the Long Island district of New York and two others in Miami.
After winning a case against a company that was using its name illegally in China, Baldinini has already opened 12 stores in the country, and their number should grow to 30 in the next four to five years. Like Fabi, another Italian shoemaker from the Marche region who has invested strongly in Russia and China, Gimmi Baldinini, the Italian entrepreneur who owns the eponymous company and has been running it since 1970, is also looking at Iran as a potential market for its future development.
He is also considering a stronger involvement in e-commerce, where Baldinini's sales are more or less similar to those of its three largest stores, with customers all over the world. The company currently trades through about 150 single-brand physical stores, 70 percent of which are franchised and 40 are factory outlets. Of those, about 100 are in Russia, where the store count has remained more or less constant. Instead, Baldinini has reduced the number of its stores in Ukraine from 25 to eight.
The company's footwear sales in Russia have declined by about 20 percent so far this year in terms of volume, but the total turnover should be more or less stable or down slightly after a compound annual growth of 10.1 percent between 2010 and 2013, when it reached a level of €110.9 million. One of the positive factors has been a good response by the market to the beautiful, higher-priced Gimmi Baldinini line, which was launched one year ago, and the brand's diversification into handbags and other products.
Baldinini's operating margin before and after amortization averaged 11.5 percent and 8.7 percent, respectively, between 2011 and 2013. The margin after amortization (Ebit) grew steadily from 7.5 percent in 2011 to 9.7 percent in 2013, but it has been tapering down lately.
These figures are not consolidated and come from a recently published report by ICM Advisors and Legal Community, called “Save the Brand,” that gave Baldinini a brand equity score of 3.9, the highest among 50 Italian small and medium-sized companies analyzed by these consultancies in the fashion (including footwear and leathergoods), furniture and food sectors that make their products in Italy. The concept of brand equity involves brand strength, as perceived by customers, and potential. Baldinini's brand value is estimated at €51.5 million.