The year 2018 was “crucial” for Sergio Rossi, according to CEO Riccardo Sciutto, following a period of reorganization of its structure and distribution and digital transformation, which all contributed to a 4.5% increase in revenues to 58.4 million euros ($64.7million).
According to its 2018 Sustainability Report, sales are expected to total 70 million euros in 2019, although Sciutto admitted Hong Kong’s social troubles are a variable. “You would see me with a huge smile if it weren’t for Hong Kong,” said Sciutto in his staple easygoing manner during an interview at the brand’s Milan headquarters.
Asia has become the company’s main market, accounting for more than 50% of sales, driven by Japan and China, and it will be a focus next year, with store openings planned in Singapore and Macau, two additional units in China and other banners in Japan.
Earlier this month, Sergio Rossi opened a flagship in Shibuya Scramble Square in Tokyo. “It’s performing very well and it targets customers aged below 25 years old,” said Sciutto. The nude and chalk color palette contrasts with the new black-and-white graphic archival logo. In Hong Kong, despite the situation, a store at K11 Musea developed by Adrian Cheng is “working well, better than others because it’s a destination, with artwork and a stunning butterflies garden,” said Sciutto.
Further signaling the relevance of the region, the company is relaunching the men’s division after a hiatus and opened a dedicated store in Tokyo, which will be followed by a unit at Isetan next year. As reported, the brand is planning an event at men’s trade show Pitti Uomo in January.
Sciutto said beginning in January, 100% of Sergio Rossi’s purchased electricity will be from renewable source plants at the San Mauro Pascoli, Italy-based manufacturing plant, stores and headquarters in Italy. While most of the conversation hinged on the company’s sustainability efforts over the past three years, the strategy set in motion by the executive strongly hinges on the future of the plant. This includes potential production agreements for other brands. “This is a return to what [founder] Sergio Rossi did, when it produced for the likes of Azzedine Alaïa, Versace, Moschino, Dolce & Gabbana, Gucci, Yves Saint Laurent and Bottega Veneta,” said Sciutto.
The company produces between 1,000 and 1,500 pairs of shoes a day in a range of 400 models. “I am open to and evaluating possible partnerships. We are putting the plant at the center. The company has been stabilized, and if there is consistency [with brands for potential agreements] and a quality message, this could become a very interesting manufacturing hub,” explained Sciutto. According to market sources, one “major brand” is already negotiating production with Sergio Rossi.
The plant itself, which includes an archive of more than 6,000 models, “is attractive” to potential buyers, said Sciutto, although Rossi’s owner, European investment house Investindustrial, which bought the company from Kering in December 2015, has no immediate plans to exit the brand. Sciutto said the fund is also very supportive of Sergio Rossi’s sustainability efforts, which involve not only eco but also social issues, as he ticked off “integrity, respect for the territory — one-third of suppliers are from the local Emilia Romagna region [where the plant is based] — and training of artisans.”
With energy and local community, human capital is one of the three pillars on which Sergio Rossi is building its Sustainability Policy, as Sciutto confirmed the company’s commitment to the principles of the United Nations Global Compact. “All our activities are developed on these pillars,” said Sciutto, who noted that the Sustainability Report is certified by Ernst & Young. “We started these projects three years ago, and now we decided it was time to speak up and let our customers know, and not because it will make us sell more shoes, but because it’s ethical. I believe that consumers will one day come to the store and ask us how the shoes were made, if we have saved energy and what we did to be sustainable. I don’t have an absolutist approach, but if every company took a few steps in this direction, we each could do something to [save] the Earth,” contended Sciutto.
Other ways to do good, for example, is that no less than two people should be in a car driving to San Mauro Pascoli on business and all plastic bottles have been banned, saving 21,600 units a year. “I am for doing and then talking about what’s been done,” said Sciutto.
For example, the company sends the hides that fall on the cutting room floor to be regenerated or even to schools for art projects. (Of note: Water was offered during the interview on coasters made of scraps of leather.) A reorganization of the logistics and the photovoltaic system in San Mauro Pascoli will result in 340 tons of CO2 saved compared with 2017. There will also be a 42% decrease in gas emissions. Sciutto, however, was wary of the possibility for a company to ever achieve carbon neutrality.
The company is also working on improving the working place of employees, of which 63% are women. Eighty percent of production is in-house and 100% of materials and components are Italian.
Italy accounts for 15% of sales, while America represents less than 10% of revenues. Next year, the brand will open a new store at The Shops at Riverside, N.J.
Sciutto trumpeted the concession model, set in place at Bloomingdale’s, which is one of the fastest-growing stores, he said.
The company now counts 55 stores. “We closed 30 stores in two years and a half, and opened 33, relocated 15 and renovated 12,” said Sciutto.
He was also pleased with the performance of the New York Madison Avenue boutique, opened last May, and the new London store inaugurated last March, “Brexit notwithstanding,” he said.
“Something happened to customers. They want an experience and to value things. They are more conscious of what they buy, the quality and how the product is made,” Sciutto observed. Also, he said, in Europe, the storied retail streets are changing, because big luxury groups are taking over major spaces, squeezing out smaller brands, and customers “have increasingly less time to shop” so those clusters of stores are more and more regrouped, to the detriment of some streets.
The brand’s made-to-measure bridal shoes have been “incredibly successful,” he added.
A store in Abu Dhabi will open by the end of the year, which follows units in Dubai and Doha. After the opening in New York and in Chengdu earlier this year, a third store is opening in Shanghai at the ITC destination and a unit will launch at Oberpollinger in Munich.
This story was reported by WWD and originally appeared on WWD.com.