Zeis Excelsa has dropped all its licensing agreements to concentrate on the development of its own footwear brands - Docksteps, Cult and Virtus Palestre - and its participation in the international development of Dirk Bikkembergs, a brand whose ownership has fallen under the control of its Chinese distributor.
The Italian company is stopping its licensing deal with Samsonite for a footwear line that covered a few European countries but was distributed by Zeis mainly in Italy, resulting in sales of only between 40,000 and 50,000 pairs per year. The big international luggage brand is apparently no longer interested in a diversification in our sector.
As previously reported, Zeis Excelsa will also stop acting as the Italian licensee for Merrell at the end of this year, feeling that it cannot compete with big players like Salomon in the outdoor market. A distributor, Premiere Distribution, is taking over Merrell's sales in Italy. Zeis had already put an end three years ago to another contract with Wolverine Worldwide as the Italian licensee for Harley-Davidson footwear.
Including the retail sales of six Merrell stores owned by Zeis, the two licensing deals were generating annual sales of about €10 million. One of the Merrell stores has been closed. The others, which are in excellent locations, have been converted to the Docksteps banner.
Zeis' president, Maurizio Pizzuti, feels that the lifestyle portion of Merrell's collection, which was doing particularly well in Italy, can be taken over by the company's own Virtus line of sneakers, targeting the numerous Italian retailers who were buying the Merrell line in the past years. Similarly, some Samsonite models can be integrated into the Docksteps collection, which is also sold mostly in Italy.
The Italian company operates more than 30 stores now under the Docksteps brand name in its home country, plus 15 franchised stores. This line of casual shoes was mostly male-oriented, but Zeis has managed to expand its women's segment in reaction to the crisis of the medium-priced segment of the men's footwear market, boosting overall sales. Docksteps is now generating annual sales of around €10 million.
The younger Cult line, which consists mainly of women's shoes, is doing very well, approaching the same turnover as Docksteps. It has a wider international distribution, with sales in 7-8 foreign countries.
Pizzuti is quite bullish about the international development of Bikkembergs, a fashion label in which Zeis still holds a 24.5 percent interest. It also remains as the global footwear licensee of the brand, with annual sales of more than 350,000 pairs. The volume was higher before, but the brand has been upgraded and its distribution has become more selective.
Bikkembergs generated total revenues of €92 million last year, almost twice the level reached when Zeis invested in the brand. By losing control over its apparel line, Zeis' revenues will be reduced from about €110 million to €70 million this year. The termination of its licensing deals will further cut down its revenues in 2016, but Pizzuti is optimistic about the future of its house brands.
Anyhow, Zeis has made a nice capital gain of more €24 million on the sale of its stake in Bikkembergs to Guangzhou Canudilo, the Chinese company that was distributing the brand in its own country. Canudilo currently operates 20 Bikkembergs stores in China, and it has big plans for it in the important accessible luxury segment of the market.
New Bikkembergs stores are being opened in Russia and Ukraine, targeting the top bracket of the population, but Pizzuti sees a strong potential for its development through the internet, particularly in countries like the U.S., where Bikkembergs is only sold online, with good results.
Pizzuti has no particular plans to expand Zeis' own network of physical stores for any of its brands, focusing mainly on e-commerce for their international expansion. The company is already selling about 280,000 pairs a year online, the majority outside Italy.
The development of e-commerce should allow Zeis to maintain its staff of nearly 500 people, including 150 workers at its factories in the Marche region of Italy and in Romania, but Pizzuti feels that this will only be possible if the company manages to re-invent itself. Pizzuti, who was a president of the Italian shoe industry federation when it was still called Anci, attended last month its convention in Venice on “The Digital Artisan.” He has posted notices in Zeis' offices banning its staff from coming up with expressions such as “We have always operated like this before” or “Others are acting like this instead.”