From flip-flops to wellies, country manager Richard Shetliffe explains the secret of the Havaianas brand’s international success.
When Richard Shetliffe described a pair of Havaianas as a “commodity”, it struck a chord with me. I grew up in Brazil, where owning a pair of these flip-flops was like owning a toothbrush. So commoditised was the product that I thought its fashion positioning in the UK many years later was quite amusing.
But it’s no longer a laughing matter; Havaianas is arguably the most recognised flip-flop brand in the world, with impressive stores in some of the most iconic streets and retailers across the globe.
“When Sebastian Manes [Selfridges’ buying and merchandising director] was in São Paulo he took a picture of the Havaianas store and said: ‘I want that’ for the Selfridges concession,” says Shetliffe, country manager for Alpargatas UK (Alpargatas is Havaianas’ parent company), referring to the most colourful, attention-grabbing store on the premium street Rua Oscar Freire. “Havaianas is doing very well in the UK. When you have such a high positioning for what is a democratic brand, that helps. That’s the perverse thing about Havaianas – it’s an aspirational brand but accessible to everyone. For example, we can sell it at Net-A-Porter and Selfridges, but equally, we can sell it at an independent. Very few brands cross-pollinate the distribution spectrum. If you look at the product, it’s timeless, it’s got an air of freedom about it.”
Colin Temple, chief executive of Schuh, says Havaianas is the retailer’s “silhouette of choice” on a flip-flop. “It’s what I call a perennial, it’s a staple for us,” he explains. “It does what it says on the tin: it’s a flip-flop. But it has a bit of heritage, it’s reasonably priced and has strong brand equity. If the weather had been good this summer, we would have sold more than last year.”
Havaianas is celebrating its 50th anniversary this year, a genuine landmark for a Brazilian fashion brand with international success. It’s only in the past 20 years that the brand delved into product extensions, after being inspired by its favela wearers, who pulled the straps off their two-coloured pair of flip-flops (called ‘Tradicional’) and flipped the sole over so that the base colour matched the straps.
“That’s when we came up with ‘Top’ – the first product development in 30 years,” says Shetliffe, about the single-colour style. “From that, the brand then started to come to Europe, in the mid-1990s when a lot of fashion brands were using Brazilian models on the catwalks. These models were coming into Europe wearing Havaianas.”
Today, Top is a favourite “with the fashionistas”, says Shetliffe, explaining that the more subtle design appeals to that demographic. ‘Tradicional’ is still popular in Brazil (it’s the entry price range), but ‘Brazil’ (the style with the flag on the straps) has been overtaken by ‘Logo’ (where the Havaianas logo is featured on the straps) as the best-selling style in the UK. It’s an interesting development, given that, in the clothing sector, many traditional logo-heavy brands have opted for a more toned-down logo design. Clearly, it shows the strength of the Havaianas brand and the pride consumers feel in wearing a pair of its flip-flops.
In 2011, Alpargatas’s European and US net revenues (the business doesn’t split the two) rose 15.6% to R$238.4m (£75.1m) compared with 2010. The UK is in the top three markets in Europe, with more than 250 stockists. But you wonder how much a business modelled on flip-flops that is well-penetrated in the UK market can really grow.
“We’ve spent a lot of time growing the business organically. Now we’re looking at segmenting the collection for different retailers,” says Shetliffe. “We’re on about1,500 SKUs – it’s a big collection – so we’re looking at targeted distribution and, more importantly, growing with our existing customers. There’s not a huge amount of difference in price points across the collection. We have the ‘Special’ collection, which is an ongoing collaboration with Swarovski and we have Swarovski crystal flip-flops that retail for £180. A customer in Harrods bought four pairs the other day.
“We launched a sports collection for spring 12 that will allow us to go into retailers such as JD. It’s basically a sportier looking sandal. We have two styles, called Aero and Power. They have little slits on the strap to give them a more sporty feel and Power has pleated soles, so if you’re wearing them in the shower, the water has drainage points.”
In 2010, Havaianas launched espadrilles and trainers, followed by wellies in 2011. Shetliffe says the wellies and espadrilles are performing well, but that the trainers market is “much more competitive”.
But for a brand whose heritage is so entrenched in flip-flops, there is a danger that too much diversification could dilute the strong brand equity that the likes of Schuh’s Colin Temple refer to.
“Exactly, and this is where we have to be very cautious,” Shetliffe admits. “But being in northern Europe, we need to make the brand relevant 12 months of the year. Wellies are a focal part of that, and it’s a fun thing to play with in terms of marketing. You’ve got this rain/shine message. Hunter has a pretty strong foothold in the sector, but we’re developing and seeing some pretty strong signs.”
Damian Scarlett, managing director of etailer Cloggs, believes product extension is the right thing for Havaianas to do, but warns that diversifying into different categories is tough.
“No one wants to stand still, but it’s an unusual step from a sandal to a wellie,” he explains. “In flip-flops, Havaianas is the best brand in its category, but the wellies are not different enough. Shoppers can buy own-brand styles more cheaply.”
Perhaps product collaborations are the way forward? “They are hugely important”, says Shetliffe of spring 12’s tie-up with the Missoni label and autumn 12’s collaboration with Matthew Williamson on wellies. “We’re also looking to grow in kids [footwear] so we’ve done a fairly big licensing collection with Disney.”
Part of HavaiAnas’ USP is that all production is done in Brazil – not the cheapest market to produce in. Is it sustainable to continue down this route if the business is to grow outside of Brazil where, according to Shetliffe, 180 million pairs of Havaianas are sold every year to the 190 million inhabitants? “Yes,” says Shetliffe emphatically. “Right this second, we’re in the process of opening a second factory, just north of Rio. Part of the brand’s very being is that it’s produced in Brazil.” At present the business produces about 210 million pairs of flip-flops per year. The new factory will allow production to increase by 100 million pairs.
“From a UK perspective, [the Brazilian heritage] is important, absolutely. Brazil is a country that’s on the up, it’s cool and more and more people are going on holiday to Brazil from the UK and Europe,” says Shetliffe.
With all eyes on Brazil right now – and the football World Cup and Rio Olympics on the horizon – the marketing opportunities are certainly there for the taking.