One of Brazil’s biggest footwear companies is planning a big push in key global markets.
Grendene, which considers itself Brazil’s largest sandal manufacturer and owns labels including Melissa and Ipanema among others, has entered a joint venture with investment firm 3G Radar. Their new entity, called Grendene Global Brands or GGB for short, will chart strategic growth for all of Grendene’s brands in the U.S., Canada and China.
The venture, which is owned 50.1 percent by 3G and 49.9 percent by Grendene, is led by chief executive officer Gustavo Assumpcao — formerly of Anheuser-Busch.
The two companies are not strangers to one another. 3G has invested in Grendene numerous times over the years and saw an opportunity to “combine forces,” Assumpcao said. 3G and Grendene’s combined initial commitment in the JV is about $100 million, and each company’s investment is proportional to its ownership stake.
“China and the U.S. are 40 percent of the global footwear market but for Grendene they are only 4 percent, which is a big opportunity,” Assumpcao said. The company says it is already on track to double the sales volume of Melissa’s Possession sandal in the U.S. by the end of this year. The label is famous for its jelly shoes that have a strong bubblegum scent.
The executive shied away from calling the venture a distribution deal, saying that it encompasses more ambition. GGB will look for M&A opportunities as part of its wider growth strategy, Assumpcao said.
In addition to Melissa and Ipanema, Grendene also owns labels including Rider, Zaxy and Cartago.
In preparation for growth, GGB has hired a staff of 50 — with a focus on logistics and localized strategy. The company will work with stakeholders in the U.S. and China to ensure that its marketing and sales strategies align with local culture, which Assumpcao admitted has been a weak point for Grendene in the past.
“We don’t want to step away from our brand roots or soul but we need more relevance and to speak the language of these markets. Back to school in the U.S. and Brazil mean different things at different times of the year. The mix of self-expression and comfort is different in the U.S. and China. We were lacking this knowledge before,” he said.
E-commerce is another key focus for GGB, and Assumpcao said that Melissa’s direct-to-consumer sales have already increased 300 percent year over year, due to improvements in staffing, systems development and marketing.
“D-to-c is one of the main priorities where we were really lacking. We will still have wholesale but want to make our website connect more with what consumers want to see,” he said.