Despite being a leader in the North American footwear market, Aldo has had its work cut out breaking into the UK. Aldo Global’s group vice president explains how the business ticks.
Working for footwear chain Aldo certainly sounds like a lot of fun. “When we visit the UK, we hire a big tour bus, the kind that rock stars have,” smiles Aldo Global group vice president David Bensadoun in his maple-syrup smooth, Canadian drawl. “We just rip around the English countryside like a task force.”
Aldo made its UK debut in September 2002 and although there is no head office here, Bensadoun visits the UK every three months and a UK-specific buying team works from the Aldo head office in Montreal, Canada.
Trips to the UK are factored into the Aldo operation every season, but it is not all high jinks - expansion plans are afoot and a desire to succeed in the UK footwear market is paramount. “We’re very proud to be in the UK. It is by far the most competitive market in the world,” says Bensadoun. “The real estate is so expensive that if you’re not a sharp operator you won’t even have a chance to compete. The competitors are really strong. That calibre of competition doesn’t really exist in North America. The UK is the window to the rest of the world.”
Although Aldo is a relatively new name to the UK, the retailer has been shodding feet for more than 35 years in North America and has 1,100 corporately owned stores worldwide, 400 franchise stores and total sales in excess of US$1.5 billion (£988.7 million) annually.
The company was founded in 1972 by Bensadoun’s father, Aldo Bensadoun, and today the group has stores in 40 countries worldwide. David Bensadoun’s great-grandfather was a cobbler, and when he retired from the French army he opened four footwear stores under the name Au Pied Mignon, which translates as ‘At Cute Feet’. His grandson Aldo swore he would never go into retail and sidestepped a career in footwear for electrical engineering. But he could not shake off a fascination with consumer habits, and this eventually pulled him back to his family retail roots. “My dad is a true entrepreneur,” says Bensadoun. “[People] assume he came into it loving shoes, but what he loves is understanding the customers.”
Stepping up to the challenge
Following in his father’s footsteps, Bensadoun is also keen to understand the customer, so much so that he took a demotion within the family business to try to master the art. “Growing up, I never worked in the stores. Dad didn’t push us; he wanted us to find our own way. When I did join, I later asked for a demotion and worked as an assistant buyer after being a director. I had been working on change initiatives, which were not marketing and product related, and these weren’t the heart and soul of the company, so I took a step back and relearnt a few things.”
Aldo as a business has also had to relearn a few things, at least where the UK market is concerned, as its entry here has not been plain sailing. “The UK was a big challenge,” says Bensadoun. “We’ve been used to being fashion leaders in North America, but we knew there were several strong players in the UK.”
With the recent turmoil in the footwear market, including Dune buying footwear concession business Shoe Studio Group out of administration, the administration and subsequent buyback of Barratts and Priceless, and the administrations of Qube and Original Shoe Company, the sector hasn’t seen such a significant shake out since the collapse of British Shoe Corporation in the 1990s.
But Bensadoun is happy with Aldo’s performance in the UK, although won’t divulge figures. “We had a fantastic 2008; our year end is the end of January and this will be the best year we have had so far,” he says. “If people in the UK think it’s tough, they should try running stores in Florida, California and Arizona; these states were decimated by the sub-prime lending crisis.”
Back in the UK, turnover at Aldo’s store on London’s Oxford Street is twice as much as any store in the retailer’s native Canada. The company has 28 stores in the UK and Republic of Ireland and aims to get up to 40 stores, with cities such as Newcastle upon Tyne and Oxford cited as potential locations.
Online is also an integral part of Aldo’s growth strategy in the UK, with the etail business disproportionately large as a percentage of total sales compared to the split in the US, and conversions twice as high. Aldo’s online model differs from many of the UK footwear operators. It has no dedicated stock for online orders. Instead, the retailer leverages the stock that is in the existing store network, finding the desired style in the store closest to the customer’s home and delivering it from there.
The chief executive of one multiple footwear retailer said of the business: “It knows what it is doing and is a good operator. It doesn’t offer particularly good value for money and can be pricey, but it has very good fashionable product and is a great range builder. Since it arrived in the UK it has gradually got better.”
One criticism of Aldo’s model is that some of the product is out of step with the tastes of the UK consumer. Initially, 80% of the product on the shelves of the Oxford Street store could just as easily be found at Aldo’s store in Fort McMurray in Canada (an oil town further north than the Orkney Islands in Scotland).
“It has been a major learning curve,” says Bensadoun. “Now it is 40% North American product in store at the most. The average UK consumer is much more trend oriented. There has been an evolution.”
- 2004 Group vice president, Aldo Global
- 2003 General manager, Aldo Canada, US and UK
- 2000 General manager, Aldo’s Canadian divisions
- 1999 Footwear buyer, Aldo
- 1998 Director of merchandise planning, Aldo
- 1997 Project manager, Aldo
- 1996 Joins Aldo
Who is your fashion business mentor?
My dad. I am very logical and strategy minded and my dad is a true entrepreneur. He brings a lot of passion and intelligence to something that seems straightforward. He has done an amazing job. Our company is unique in that there is little turnover in staff. I have five people that report directly to me and the one that has been with us the least time has been there 10 years. Three of them have been there for more than 25 years.
How will the footwear market change in the UK over the next three years?
I think the clothing players will continue to improve their footwear offering and they will be successful. There are some very good clothing retailers in the UK. I think some of the speciality players will fade away. There will be a pruning of the competitive landscape. Some large format retailers could become key players.
Which is your favourite retailer?
Any Ducati motorcycle dealership - I love motorcycles. Our head merchandiser and I did a store visit trip through British Columbia in Canada, and we rented Harley-Davidson motorbikes and visited the stores by bike.
What is the best-selling product you have ever worked on?
We had a boot that was a square toe, mid-shaft block high heel back in 2000. It sounds absolutely horrendous now, but it featured different coloured blocks of leather and we sold so many of them. That was the first time that I realised the potential of an individual style.