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Bexley - French shoemaking institution

  • Category: Life
  • Subcategory: Lifestyle
  • Topic: Shoes
  • Pages: 5
  • Words: 2144
  • Published: 26 May 2018
  • Downloads: 294
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Eric Botton created the brand and the concept Bexley, French shoemaking institution 30 years ago without any industry knowledge in Lyon, France. He remains the president of the company to this day. But, in December 2017, the brand has been acquired by the group LBO France (Group who own the brands IKKS, The Kooples) and a new chief executive has just been named, Bruno Luppens (ex-chief executive of Lacoste).

The company now has 15 selling points, 14 in France and 1 in Belgium as you can see on the map. More precisely, 3 in Lyon, the city of origin, 7 in Paris, and after 1 in each city of Annecy, Marseille, Aix en Provence and Nice. And the one in Belgium is in Brussels.

All the shops are non-franchised and are entirely owned by Eric Botton, the president. This fact explains the small number of shops.

The brand in figures is a €35M annual turnover of over 250 000 pairs of shoes sold each year.

The brand is selling a wide range of product like casual and dress shoes, shirts, pullovers, belts or accessories and many others as you can see below.

The unique selling point (USP) of the company is the best value for money on the market. The brand is selling products with discounts on every product all the year. For that, the products can be bought individually but also in packs, and the more you buy, the cheaper the product become. All the products are developed in-house so they can ensure to respond to the clients’ needs and to remain the prices as low as possible. Despite the fact that the prices are low, the team seeks out premium raw materials so that each Bexley product is a high-quality item. So, Bexley is actually targeting men seeking luxury footwear at really good prices.

Over 60 selling points worldwide (France, Belgium, Morocco, Tunis, and Switzerland).

Over 65 selling points worldwide (France, Switzerland, Poland, French West Indies, Morocco, Algeria, Slovakia and the Czech Republic)

For the moment, we can say that the company has two export experiences. First with the selling point in Belgium and then by having the possibility to buy the products worldwide via the brand’s online shop.

Despite the wide range of product, we will focus on the dress shoes for this marketing strategy.

In order to choose the four countries I first use the website Comtrade. On this map, we can see the countries where France exports the more shoes.

With the help of this map, I’ve chosen 4 potentials target markets: Japan, Germany Sweden, and Morocco.

Japan because according to articles that I found they have a real interest in dress shoes. JM Weston, a well-known brand is implanted there and Japanese are coming to France in order to learn more about dress shoes and the production of these products. Consequently, the competition is hard in Japan; they already have a large number of shops. Even if there is a huge culture difference, the country is safe and people have a good purchasing power. Therefore, the transport is complicated by reason of the situation of the country.

I choose Germany because the country is very close to France; in term of transport, it is very easy to export products. They also have a really good purchasing power and it’s a safe country. There’s no real difficulty concerning the language as they speak English and the culture is not really different. But, as we can see in Appendix 1, dress shoes represents only 20% of the German Footwear market.

Sweden because they have a very high purchasing power; they speak very well English (appendix 2) and the country is very safe. But the labor price is high compared to other countries and the culture is different from in winter people wear dress shoes only for the inside and boots all the time.

And Morocco because of its position, the low labor price and the fact that Moroccan spent money on dress shoes and there are also a lot of tourists.

For the choice of the country I made a graph with criteria, we can use to see which market can be the best.

With the help of this graph and all the research I made, the country I’ve decided to select is Morocco.

Political

– Fitch Rating: BBB

– Coface Rating in Country Risk: A4 (appendix 3)

– Transparency International: rank 90/176

Economic

– The leather shoe industry is an important component of the consumer goods sector.

– Investments made in the leather sector in 2010 amounted to 147 million dirhams, which corresponds to a 30% increase compared to 2009. 85% of these investments are made in the footwear industry.

– Moroccan exports of leather shoes declined in volume (source FAO) to an average of 4.3% per year while imports grew by a CAGR of 11.6% between 2001 and 2011.

– Maritime transport accounts for more than 95% of the transport of foreign trade.

Social

– The leather shoe sector is benefiting from rising population income levels, allowing consumers in different socio-professional categories to spend more on clothing.

Technological

– Fight against counterfeiting (The company may face counterfeiting problems with their products).

Legal

– Aside from import duties, the leather footwear sector is not subject to any particular standards or regulations.

– Judicial language is Arabic but French is often used in business.

– Inefficient administration and corruption are, in effect, the two major impediments to foreign trade (BTI 2016)

Environmental

– The implementation of the Environment Upgrading Strategy (MANE) and the National Human Development Initiative (INDH).

Labor price:

We can see that the average wage in Morocco is low, so this is an opportunity to have a cheap labor force. And after, Japan, Germany, and Sweden are approximately in the same range of wages and the labor force is well paid (appendix 4).

Market Data:

Source: World Bank

For the whole period 1960-2016, there is an annual average of 30,78%. Imports of dress shoes in Morocco in 2012

Competitors:

Many local industries produce cheap leather shoes and the selling of dress shoes goes through two types of distribution networks:

Specialized networks:

– Specialized superstores

– Branch stores

– Independent retailers

Generalist networks

– Clothing stores

– Food supermarkets

– Distance selling (I didn’t found any relevant and recent data here.)

Customers:

The decision of purchase of the average Moroccan consumer is most often based on the price applied by the retailer. Thus, the local market, with its 32 million inhabitants, presents an important demand for low-cost shoes. Which is great for Bexley that offers shoes at a very low price when it’s bought my pack. And there is also a growing demand from a more upper class.

Target market and positioning:

As in France, the positioning of the brand will be a cheap but high-quality dress shoes seller. We’ll target Moroccan consumer and also tourists that are very present in the country and as in France, men seeking luxury footwear at really good prices.

Licensing

– Good for small companies that lack resources

– Faster access to the market

– Licensee may not be committed

– Lack of enthusiasm on the part of the licensee

– Risk of opportunist

– Licensee may become a future competitor

Franchising

– Overseas expansion with a minimum investment

– Franchisees’ profits tied to their efforts

– Availability of local franchisees’ knowledge

– Limited franchising opportunities overseas

– Lack of control over the franchisees’ operations

– Cultural problems

– Physical proximity

Joint Venture

– The higher rate of return and more control over the operations

– Sharing of resources

– Access to a distribution network

– Contact with local suppliers and government officials

– Lack of control

– Lack of trust

– Conflicts arising over matters such as strategies, resource allocation, transfer pricing, ownership of critical assets (as technologies and brand names)

Finally, I decided that the most adaptable mode of entry is the franchise.

I found an article that indicates that the macroeconomic trends of Morocco are ideal to develop a franchise. Because of the stable growth rate of the GDP over the years and the fact that Moroccans are now entering the middle class where brand awareness becomes really important. I also found that 55% of the franchises in Morocco are dominated by retail franchises. Also, French franchises are in the first position in the country with United-States franchises in the second position. These facts show that it is a good opportunity for Bexley to open a franchise there.

A study also shows that the most attractive industries to open a franchise in this country are restaurants in first position and apparel in the second position.

Therefore a lot of Moroccan franchisors say that there are a bunch of obstacles to overcome. Like the complexity of finding the right local partner, the administrative formalities and the problems of adaptation of the concepts. Hence the company needs to find the right partner to adapt to local cultures while keeping their brand identity.

Consequently, the challenges and obstacles of the brand may be:

• Counterfeit of the products

• Find the right franchise

• Adapt to local culture

• Weak trademark protection

• Franchise fees: a significant proportion of the investment

For the location of the franchise, I decided to put the retail store in the city of Casablanca due to its high population density and the high purchasing power of the inhabitants.

The brand needs to provide a daily support to the franchise like setting up meetings for training and coaching and also support to ensure that the franchise will be a success. The company may also transmit the values of the company so that the franchise won’t convey a wrong image to the clients and worsen what they think about the product and the brand.

For a franchisor, one of the challenges is to adapt its concept to the local culture and the target audience, without losing the identity of the brand. I will use here the mixed marketing with the 4P to see what changes could be made to fit the Moroccan customers:

Price:

For the price, the brand just needs to put the prices in the local currency, the dirham.

The dress shoes are sold 139€ for one pair and the second pair at 99€, so 119€ per pair if you buy two. And after the third one is at 119€ so that every pair is at the same price.

In term of transportation and delivery for the product, the maritime transport is the most appropriate, and as I mentioned before, this transport accounts for more than 95% of the transport of foreign trade in Morocco, this is also easy because Casablanca is situated on the coast and has a harbor. Therefore, this transport is expensive.

Since it is hard to find some information about the prices so I made a simulation on the Cma-CMG website for maritime transport from the Havre (France) to Casablanca.

Advertising:

In France, Bexley advertises in men’s magazines such as Le Point. These magazines are aimed to target businessmen who are potential customers for the brand.

It is, therefore, possible to promote the brand in a Moroccan men’s magazine such as VH. The announcement needs to be made before the launch of the shop but still after to maintain the awareness.

Sales:

At the inauguration of the retail shop, the brand can organize some sales in order to attract customers with low prices. And if they are satisfied with the products, they will after becoming loyal clients to the brand and will come back to buy other products. In order to attract the most people, advertising should be made before the opening of the shop for example flyers and promotion in magazines.

Direct Mail:

The brand can also look into the customer database to see if they already have loyal customers that shop by Internet or in France (every client has a membership with their address mentioned) and send them e-mails to inform of the next opening of the shop in Morocco. This can also create a positive word-of-mouth between the local inhabitants.

Online Marketing:

The power of social media in business cannot be underestimated, thus the company can also promote the new shop by doing online marketing. They can create a company profile dedicated to this city like “Bexley Casablanca” on the social media and talk about the sales, show pictures of the shop and the products to create interest.

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