On a recent summer evening, Aldo CEO David Bensadoun issued an unexpected request to the hundreds of international franchising partners gathered for a company event at Montréal’s Old Port. He wanted the close-knit team to join together for a group hug to honor longtime executive Norman Jaskolka, who recently became chairman. Not one person hesitated — and it was a feel-good, public bonding moment.
Behind the scenes, Bensadoun has been making critical moves to dramatically evolve Aldo Group and diversify the business. The company has unveiled bold plans for its new licensing division and is committed to being a leader in sustainability.
While nearly every industry player has been talking about going green, Aldo is taking sizable steps to become a legitimate leader. Just last week, the flagship brand introduced its first sustainable sneaker, and the Call It Spring label went fully vegan for spring ’19. Last month, the company ditched single-use shopping bags across thousands of stores. Most notably, the firm was declared carbon-neutral last year after going through an intensive process.
“It took time to get everything in line. It’s not the kind of thing you want to talk about until you actually do it,” Bensadoun said. “This year is the culmination of many years of hard work by the team.”
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While Aldo is accelerating its sustainability push, the CEO understands that consumers aren’t typically willing to spend more for eco-friendly styles. One of the company’s new goals is to make Call It Spring fully sustainable by 2025, but there are some obstacles ahead. “I hope we beat that date, but we have to be realistic. Some of the materials we need don’t exist yet. If they do, they don’t exist at prices that fit in the Call It Spring proposition,” Bensadoun said. “The retail prices can’t change. Consumers won’t pay a premium for sustainability. What they will do is choose us versus someone who’s not doing it.”
As the company works to align itself with cause-minded consumers, it’s also focusing on cultivating more industry relationships through its new licensing division.
In the past few months, Aldo Group has inked deals with Rachel Zoe, Who What Wear and Belstaff — and there are more in the works.
Here, Bensadoun talks about finding the best partners, getting sustainability right and the big challenges the industry is facing now.
How does your commitment to sustainability fit into your overall company strategy?
David Bensadoun: “My dad has been socially-minded [since the beginning]. For him and his generation, it was about human rights, gay rights, giving dignity to people and having a company that was based on love. In this new generation, we’re bringing the environment under that same umbrella of social justice. It’s a continuation of the family and company’s values. It’s important to our customer. All the research we’re doing on our Call It Spring and Aldo [consumer] is that they want to spend money on the brands that care about these issues.”
Many companies say sustainability is a top priority, but how do you tackle it authentically?
DB: “Anyone who wants to jump on the bandwagon is welcome to. Some of the things we’re doing, any company could do with six or 12 months of lead time. Other [initiatives] would take three to five years. What matters is authenticity. If a company is known for disposable fashion and has never had any environment policies and suddenly has this one product about sustainability, that’s pretty shallow. Customers see through that.”
How did you make sure all of the initiatives were embraced internally?
DB: “People knew we were working on it for about a year before we made it public. At first, it was like, ‘Is that possible?’ We said yes, and here’s the path. [Eliminating single use shopping bags] wasn’t so easy to push through. A lot of our store operations people, particularly in parts of the U.S., were afraid customers would react badly and say, ‘I bought a pair of shoes in your store and every other place in the mall gives me a bag. They were worried about the customer service ramifications. The answer is that our box is a bag. It still has a handle and it’s easy to carry. It’s well made. That’s one of the nice things about being a vertically integrated retailer — we control every aspect of packaging.”
In 2018, the company was certified carbon neutral. How extensive was this process?
DB: “Carbon neutral is a real journey. We had to do a lot of research and a lot of measurement. You can declare yourself carbon neutral, but trying to get an NGO to endorse it is another thing. They need to see you’ve collected the numbers and reduced the footprint.”
While you’ve been involved in private label development for years, you’re now introducing a dedicated licensing division. Why was this the right time to make the leap?
DB: “For us, signing the right licenses and finding the best partners is a way for us to grow. We have distribution in 104 countries and 3,000 points of sale. Once you have a supply chain, a sourcing office and design teams, you want more projects. We want to find licenses in categories we don’t own, so we’re not going to be looking in the mid-priced fashion footwear space. We are seeking value-oriented brands, bridge and premium brands — and we’re also interested in any type of men’s project.”
As you embark on significant expansion, how worried are you about President Donald Trump’s new tariffs?
DB: “I was very proud [to unite with the industry] and sign anti-tariff letters to President Trump. It’s unfortunate to be using American consumers as a pawn in the trade war. It doesn’t make any sense. We have a more diversified sourcing base than most companies so it impacts us less. We also don’t do the majority of our sales in the U.S. About two-thirds of our company sales are outside the U.S. So it’s a big issue for our American business – it’s not a massive issue for our company.”
How are you finding the right balance between brick-and-mortar and e-commerce?
DB: “I don’t think the customer cares whether they buy the product in the store or online. They see us as a brand. If they happen to be at the mall, they’ll go to the store. If not, they’ll buy it online. I don’t care where they go because we make more or less the same amount of money. My focus is really looking at trade area sales, and not stores versus e-commerce sales. We believe in omnichannel: Up to 90% of our e-commerce returns are to the store, 77% of our in-store shoppers researched Aldo online before going to the store. Who’s feeding who? The customer is on the mobile in their friends’ car researching Aldo. They arrive in the mall. They don’t walk around. You just want to be one of the stores they go visit.”
Do you still believe in the future of malls?
DB: “The landlords understand the dynamic in the marketplace and the rents are coming down. It’s going to be easier and easier to stay in the malls. The bigger question is whether they attract the right traffic and have the right co-tenancy. We really care about that — there’s about 20 stores you want to be next to.”
What other burning issues should companies be focusing on?
DB: “The big miss for the industry is ethical sourcing. I know that every company will have a published policy, but I would love to see the industry come together and adopt one standard. It would take leadership from one of the very large industry players and we would all have to be a little more transparent. We would help all the factories be more efficient. If you’re a factory owner in Vietnam or Cambodia or China, you have to read through 17 different compliance manuals. Why wouldn’t our industry band together and agree on one standard? It shouldn’t be a competitive advantage to not be compliant. It shouldn’t be a competitive advantage to be compliant. If we go for a private label account and we lose the account to someone who’s making shoes 50 cents cheaper, but if they’re making them 50 cents cheaper because they’re not at the same compliance, that’s not right for the human beings in the factory and it’s not right for the industry.”