Luis Chico de Guzmán, from the third family generation, is the CEO of Hispanitas and its majority shareholder. The Hispanitas brand, which belongs to the company Emboga S.A., is one of the main international references today in the market of ladies’ footwear and accessories made in Spain.
Hispanitas is a family brand associated with values such as quality and comfort. How do you consolidate and take care of your brand image and its association with these values?
We are, indeed, a family business, now in its third generation. The firm was set up by our grandfather, and later, my father developed his own project, by setting up two plants. He was one of the first to export shoes and later, in the 1970s, I joined the family business. Then we had to close down the two production centres and we started a reinvention process. From that point on, we spent about 10 years struggling and working hard, without finding anything to inspire us and lead us to success until 1989, when we created the Hispanitas brand as a shoe designed for young people. They were ballerina shoes, known at that time as “francesitas”, but my father wanted them to have a Spanish name. So that is how the Hispanitas brand was born.
As you rightly said, our brand has two values that are greatly appreciated by our consumers: quality and comfort. That is why it is so important for all our collections to include and consolidate those values. To do this, we emphasise the quality of the materials we use to make our shoes: leather, heels, lining, soles, etc. and all our shoes are designed during the initial phase and the insoles are made attaching great importance to flexibility, which makes them very comfortable to wear.
Our brand has a third fundamental value which is essential for guaranteeing our successful present and an even better future, and this is design. The interpretation of trends with the Hispanitas touch, which we express through the construction, finish, details and colour combinations associated with the Hispanitas brand, which always make it a modern proposal.
This whole conception and manufacturing process of our shoes, together with a carefully-studied communication and customer relations strategy, enable our brand to gain ever greater recognition and appreciation.
How would you define the value proposition of Hispanitas?
Our value proposition is linked to our slogan or claim, JOY IS A CHOICE. It sounds good and is powerful. Our ideal consumer is a woman who is independent, has her own opinion, enjoys travelling and takes an interest in all that surrounds her. Above all, she is looking for comfort with a fashionable component. She chooses Hispanitas because she wants to feel good, look attractive and feel comfortable at the same time. She also knows that she is buying a quality product made in Spain, in Europe.
Most of your production comes from Spain. What benefits does this have for the brand versus its competitors?
Manufacturing the products here has many advantages over our competitors, who make them in Asia or countries from Eastern Europe. Firstly, the standard of quality and regularity is undeniable.
Through twelve production plants, all of them in Spain, with 75% of them in our town of Petrer, we can generate an extensive product catalogue, create fast fashion and fill orders quickly. We cover the market and its demands immediately and we constantly improve product quality.
Spanish workers are specially prepared for and aware of these strengths. They know how important their jobs are and their impact on the end result, and we make sure these brand and company values are transferred to all our direct and indirect employees. We create a sense of belonging, something that motivates and inspires workers, and ensures their loyalty.
In the past, we have gained considerable experience with China and India, and we ourselves have had to face unexpected problems such as irregularities in the quality of the materials and delays in services, not to mention problems with containers in transit being retained or delayed. All this has serious effects on our sales and distribution channel, generating considerable uncertainty, which is difficult to sustain.
You export more than 60% of your products to more than 50 countries. What export model do you use and why? (Own stores, multi-label stores, franchise stores, etc.)
We export to more than fifty countries, which accounts for 60% of our production of more than 1,000,000 pairs of shoes and handbags per year. Most of the exports are made through our traditional multi-label channel.
We also have three of our own Outlet stores in Spain and one in Portugal, and a store in Romania, 19 shop-in-shops in China and in relevant shopping centres in the main cities, and 27 corner areas in El Corte Inglés.
All the above distribution is handled through our sales network, which is made up of more than 30 reps and distributors established throughout the world.
What criteria does the company use to select its export markets? What are the markets in which you expect the highest growth in the coming years?
Our main international markets have traditionally been European markets, specifically, Central Europe, and especially France, Benelux, the UK, Austria and Germany. Logically, factors such as proximity, a common currency, cultural similarities and the relevance of Spanish brands in those markets have made it easier for us to penetrate them.
From there on, given that we manufacture footwear that meets the needs of a wide range of consumers and is extremely marketable, we have always attached greater importance to larger markets where the consumers have an appropriate per capita income, in which our shoes will be sufficiently appreciated. Luckily, this occurs in a large number of countries.
However, I should stress one important criterion in selecting a new market; in my opinion, finding the right partner to take on the project is just as important as the market size or its appropriateness for our products. Whether they are sales reps, a distributor or any other type of commercial representation, we think it is very important for them to know the markets and for their values, philosophy and approach to the commercialisation of our brand to be similar to ours.
As I said earlier, our international business is based on European markets. These are mature markets which we know well and, although we still have the potential to grow, they are not as relevant as those of other markets that we consider to be strategic in the medium and long term, such as China and the USA.
What are the main challenges facing the company in its internationalisation process?
With respect to the main challenges, we could mention consolidating sales agreements in the USA. We have just started operating in the USA, with an excellent partner, a company similar to ours, with a family tradition and a distribution network throughout the whole of North America. We must learn more about the needs and preferences of that country and decide whether we can manage to introduce our product and price concept. This task is difficult, but by no means impossible.
As I already commented earlier, in China we now have 19 shop-in-shops for our label, and in association with our Chinese partner (a lady with a very European mentality who lived in Denmark for 14 years), we are making progress and the project may grow at an increasingly fast pace, as the brand is gradually recognised in Asia.
Simultaneously with the above, we have continued to invest in Spain, which is still our main market, and in Europe, France, Belgium, Germany, the UK and Portugal, among others, since these are very important market for our company. We take care of our image in the retail outlets through communication, image and photographic campaigns that are extremely creative and well designed. Our brand image is global and is very well defined.
How important is the online sales channel for Hispanitas? What percentage does it contribute to the total sales of the brand?
We know full well that online sales now play a very important part in fashion sales in general, and footwear sales in particular. It has done so for many years now, and our company has always been aware of its potential and its strategic role, not only in terms of sales but also in terms of promotion.
In fact, in 2015 we have allocated a very important percentage of our marketing budget to different online projects, including the complete updating of our website, and important campaigns in social media networks. I say this because in a consolidated company such as ours, with such a mature market, the weight of online sales seems irrelevant, but that does not prevent us from considering it and treating it like it is – a channel with a great present and an even more important future, and the one which best enables a brand to relate to its public.
We have no doubt that the importance of sales in this channel, via our website and via all the other online platforms and shops of our customers will continue to grow, to the point of competing directly with more traditional channels.
Nonetheless, we are also aware that the online channel is affecting offline actions, such as our traditional / multi-label channel, and we are very conscious of this situation.
The question we ask ourselves is: how can we manage to attract our public to the multi-label market through the online channel? Knowing how to reconcile both channels is a matter of great concern to us and something that is well worth studying.
What are the challenges facing the company over the next five years?
Over the next five years we intend to make every effort to take a qualitative step forward in the retail sector, through our project to set up our own store network in the major cities of Spain and Europe, Our immediate objective is Madrid, and we aim to open our flagship store there in 2015, in an attempt to create a new, attractive business model for any professional from the sector. Our dream is to open flagship stores in cities such as Paris, London and New York. Why shouldn’t we?
Moreover, our objective is to continue working hard to become a global brand with its own powerful identity.