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Arezzo brand
- 1. 1 Arezzo&Co Investor Day ArezzoBrand Alexandre Birman CEO Claudia Narciso BU Director
- 2. The Arezzo brandaccounts for 60% of the Company’s gross revenue Brand Overview Update 2 O F MB EX Trendy New Easy to use Eclectic 16 to 60 years of age R$189.00/pair R$716.7 million 59.5% Brand profile Target Female Public Sales Volume 3 % of Gross Revenue 4 Price at Point of Sale Inception 1972 Distribution Channel POS1 % Gross Rev.2 17 332 994 72% 15%12% 14 1% Top-of-mind brand in the sector, among the 30 most valuable Brazilian brands Points of sale homogeneously distributed throughout the country Largest women’s footwear chain in Brazil Continuous focus on product innovation Improvement of the stores’ layouts, with a high level of acceptance from clients Notes: 1. Points of Sales (2Q13); O = Owned Stores; F = Franchised Stores; MB = Multi-brand Stores; EX = Exports 2. % of gross revenues (FY 2012) 3. 2Q13 (LTM) gross revenues, internal market only: does not include other revenues (not generated by the brand) 4. % of total gross revenues (2Q13 LTM)
- 3. The development ofArezzo, the Company’s flagship brand and the leading brand in Brazil’s women’s footwear market, has been marked by making the right changes at the right time 1970s 1980s 1990s From 2000 to 2013 Founded in 1972, focused on product development and branding, with the launch of its first iconic model. Verticalized manufacturing model. 1.5 million pairs per year In 1989, first franchise Inaugurates its 1st flagship store on Oscar Freire - SP. Transfer of R&D and outsourcing of production in the Vale dos Sinos region. Strong communication and marketing strategy Innovative store concept with a camelion design and expansion of the distribution channels Owned Stores Franchises Multibrand stores Consolidating the position as the market leader 17 332 994 Fast Fashion 7 to 9 collections a year Awarded the Best Franchise in Brazil Arezzo History: Evolution of the brand
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- 5. 5 2014 Summer Campaign Multiplecontact points in order to strengthen the brand and product identity Print and online media advertising in all of the country’s State capitals + 77 pages and 27.322.620 readers + 3.167.463 audience Brand Update Sell-out initiatives Initiatives to attract consumers to the stores and strengthen the brand
- 6. 6 Brand Update Sell-out initiatives Promotethe brand as an icon in the most relevant Fashion Editorials Online Media: broad communication strategy, going beyond the product Brand exposure during several moments and interfaces with consumers Strengthen the Fast Fashion identity through specialized media New institutional website Daily posts with fashion trends, products and lifestyle Partnerships with bloggers and tastemakers Promote the brand in websites of influent journalists High-profile fashion editorials (E.g.. Harper’s Bazaar Brasil and Vogue Brasil) Initiatives to attract consumers to the stores and strengthen the brand
- 7. 7 Brand Update Sell-out initiatives MOBPARTY: Summer invaded Arezzo on August 6th Store Windows: the brand’s greeting card Weekly renovations to constantly stimulate consuming desires Synchronized collection changes – higher impact and anticipating competitors, with high brand exposure in social networks Initiatives to attract consumers to the stores and strengthen the brand
- 8. 8 Trainning inFashion and Retail Support material for sellers Retail operation manual Tranning Motivation Action Monthly motivational sales campaigns Individual goals evaluated National Sales Convention Supporting sales material (e.g. Pocket Arezzo) POS campaigns to stimulate consuming Each selling opportunity has to be treated as unique: it must not be wasted The team needs to be prepared, Motivated in acheiving its goals, And with the right tools at hand Focusing on conversion through the use of consuming stimulation techniques Brand Update Sell-out initiatives
- 9. 9 Loyalty initiatives inorder to strengthen the relationship with consumers and promote unique purchasing experiences Brand Update Sell-out initiatives After Sales Targeted actions Structured telemarketing Christmas CRM Campaign CRM Program Updated mailing Client profile registration
- 10. 10 New strategy offersa better feedback from the stores’ sell-out, higher best- seller frequency in stores and more assertive collections Arezzo Innovative supply-chain structure Collection strategy 1 2 3 Sell-out focus New sell-in dynamics with a suggested purchase map results in a faster process, allowing an even greater focus on sell-out initiatives Supply-chain flexible to the fashion profile Collection quantity and frequence consideres the product’s life cycle, with higher availability of best- sellers More assertive collections Agility to incorporate sell-out information in store restocking and product development enhances the efficiency of collections.
- 11. Arezzo continues tostrongly invest in processes in order to detail procurement development and planning 11 P R E Planning the collection Revising the collection Editing the collection Planning the Volume V Predicting trends, in order to assure collection assertiveness Predicting volumes, in order to identify the size of the ideal procurement for each store Prevent remarking, in order to elevate the average mark-up of stores Prevent inventory shortage, in order to increase sales volumes Arezzo PREV Process = More assertive collections
- 12. Product life cyclesare now planned according to the fashion content that they present 12 Arezzo Flexible supply-chain Life cycle Collection Continuables Classic Showroom Fashion supplement Fast fashion Continuables Classic Supply chain model Major collection changes, with higher fashion content, presented in runway shows Supplements based on recent fashion information, offered through an e-showroom Automatic replenishment of best sellers and their variations based on sell-out feedback Selection of existing models with a good historical sell-out performance in the colors of the collection for automatic replenishment with an open size run Products with a good sales and turnover track record for automatic replenishment with open size run
- 13. The new modelfor serving franchisees enables them to access a greater number of products in a shorter time, reducing procurement lead time 13 Showroom parade dynamic enables a greater number of shoes and bags to be evaluated Procurement map enables franchisee to monitor the mix of products purchased for their store Suggested procurement according to the profile of each franchisee store Attention to related products and the creation of procurement maps result in collections balanced among themes, categories and price marking Arezzo New showroom = Focus in the sell-out
- 14. The e-showroom allowsthe franchisee to build their store more quickly and more assertively, since they are familiar with the entire collection 14 Theme book Related products Product features Procurement map by category and price All information required by the franchisee is provided before the procurement process begins Familirity with all products in the collection Purchase by category and price range Monitoring the store’s map during the purchase More time available for the franchisee and the sales team in the physical stores Greater savings and comfort when presenting smaller collections The purchasing experience is very similar to the physical experience Arezzo Fashion complement + E-showroom
- 15. 100 121 0 50 100 150 Models in the collection Samemodels with automatic replenishment Weekly Sales / SKU2 Basics Products with automatic replenishment assure the availability of best- sellers, enhancing full-priced sales More then 20% of growth in weekly sales 21% MAINBASICSMODELS Arezzo Basics
- 16. 16 The changes resultingfrom GTM Arezzo have started to yield positive results Accelerated growth in handbag sales, due to a better product mix improving average prices Basics Products with automatic replenishment with better then estimated performance Greater markup performed by stores during collection changes Elevated franchisee satisfaction with the new sell-in model Arezzo GTM Results
- 17. Successful partnership: “win-win”Concentration of Franchises per Operator 5 year contracts with na average Payback of 40 months2 0% non-performing receivables 96% of satisfaction from franchisees1 Franchising Excellence Seal de Excelência for the last 8 years (ABF) Best Franchiser in Brazil (2005) and of the segment for 7 years since 2004 4 or more franchises 1 franchise 2 franchises 3 franchises 49% 10% 27% 15% (Number of operators per number of Franchises operated) 17 Notes: 1. 96% of current franchisees mentioned they would open an Arezzo franchise in case they weren’t currently franchisees 2. Annual Turnover of R$2.330 mil + average initial investment of R$ 600 mil + working capital of R$ 414 mil Intensive retail training Constant support: 6 stores per consultant on average and 22 visits per store/year Solid relationship and constant support to the franchisee Mono-branded franchises strengthen the brand in the cities they are located Arezzo GTM Results The GTM Arezzo project is a new step in the healthy relationship Arezzo&Co sustains with its Franchisees
- 18. Arezzo Architectural designs Arezzo’s newarchitectural design highlights our products even more 18 With new shelves and niches, we were able to increase in 50% the number of models exposed in the stores Window relate to the pattern used on our products’ soles, forming the brand’s “ZZ” symbol Suspended shelves around the entire store with lights that highlight the products Products highlighted in the center of stores Next to the cashier, a dedicated shelf for appliances allows us to add units to the sale A better distribution of the furniture offers more comfort for clients in the stores
- 19. 24 Arezzo brandstores are to be expected in the new architectural design for 2013 19 Key Opened Being developed Shopping Iguatemi -SP Diamond Mall - MG Aldeota - CE Shopping Goiabeiras - MT Ilha Plaza - RJ BH Shopping - MG Shopping Moinho dos Ventos - RS Shopping Natal - RN Praia do Canto - ES Pátio Batel - PR Shopping Buriti - GO Iguatemi Ribeirão Preto - SP Manauara Shopping - AM Araras - SP Plaza Niterói - RJ Ipatinga - MG Rua Catalão - GO Salvador Shopping - BA Shopping Metropolitano - RJ Ariquemes - RO Shopping Ibirapuera - SP Cadima Shopping - RJ Shopping Morumbi - SP Shopping Anália Franco - SP Arezzo Architectural designs
- 20. New architectural designof the store on Rua Oscar Freire in São Paulo 20 Arezzo Architectural designs Digital communication allows us to show marketing campaigns inside the POS Highly impacting project reinforces the identity and positioning of the brand 250 m² - largest store of the brand Larger and better exposure of shoes and handbags