Feminine fashion

Fernando Minaudo: "We already prove that we can be an international player"

By hollisterclothingoutlet 23/07/2022 366 Views

De la mano de su asociación con el fondo de inversión L Catterton y con Rapsodia como nave insignia, el Grupo de Narváez busca convertirse en un jugador relevante en el negocio de la moda en toda la región. Después de concretar las compras de Caro Cuore y Babycottons, en la compañía controlada por el empresario argentino Francisco de Narváez están convencidos de que se puede competir de igual a igual contra las grandes marcas internacionales del rubro y analizan concretar nuevas compras, con la mira puesta en duplicar su volumen en menos de cuatro años y alcanzar una facturación de US$400 millones.Fernando Minaudo: Fernando Minaudo:

In an interview with La Nacion, the general director of the Narváez Group, Fernando Minaudo, advanced his growth plans for his entire brand portfolio and the projects they have underway to return to the Brazilian market and land strongly in the United States,where today they have a presence that is limited to the three stores that passed their hands with the purchase of Babycottons."We are convinced that there is an opportunity for a brand like Rhapsody, especially in the state of Florida and the West Coast.In the US.UU.We also have the advantage that we have a partner like Catterton, who knows the market and the American clothing business, "he explained.

Minaudo also did not rule out a return to the category of supermarkets in Argentina, where they participated at the time with aunt."Supermercadism is in the DNA of the family and, in fact, we are entering the sector in other countries such as Uruguay and Ecuador, and we are doing very well," he said.

- Is it possible to develop a clothing company from Argentina?

-It is a process.Throughout these years we had several milestones.The first was the emergence of Rhapsody.Rhapsody is a company that started as an idea of Sol Acuña and Josefina Helguera, who had the dream of making a unique brand, which did not exist in the country.Sol and Josefina went to see Francisco de Narváez, who helped them do a business plan and in 1999 the brand came to life.The second milestone was in 2003, when we decided to go from being a cult brand to have a presence in the shopping malls and we glued the jump from the traditional Las Cañitas local to Unicenter.Shoppings involve a greater volume and a much higher level of visibility.And the third mile.

- How was the incorporation of L Catterton?

–In 2015 we had a management meeting and the shareholders of Rhapsody to discuss the future of the company.And from that encounter we go out with two or three very clear things.The first was Plan 2020, to double the size of the company in five years, which brought a series of projects and investment decisions.After that process we cross the people of L Catterton, which is a global background that has more than US $ 14.000 million under administration.Sometimes things in business are not by chance and I think we cross them at the right time.Quickly, we had a lot of empathy.We also have the advantage that part of those who manage the fund already knew Argentina and the brand.

- Why is clothes so expensive in Argentina?

- One of the problems that the country has and that exceeds the clothing business is the perception that people have that companies earn a lot of money with exorbitant prices.And the reality is that this is not so.The other day I read a survey about the image of supermarkets and more than 80% of people believe that large chains are earning a lot of silver at a time when many are in trouble.And something similar happens with clothes.The average profitability of Argentine clothing brands, in the best case, is at the same levels of outside.What I mean by this is that the problem of clothing price is not the profitability that companies have, but Argentine costs.Argentina is a very expensive country to operate.Here the locative value is very high, as well as taxes and labor costs, comparing not with the United States, but with neighboring markets such as Colombia, Peru or Chile.

- How is a project to create a clothing company from Argentina?

Fernando Minaudo:

- The clothing industry in Argentina had a very strong development under a very protectionist umbrella.Either on formal or informal roads, historically the entry of imported merchandise was historically locked.The reality is that the Argentine industry never worried too much about the client or to be efficient, but on the other hand as a country we have an incredible creative capacity, with a talent that allowed the development of large brands. Nosotros creemos que este contexto de proteccionismo no es sustentable en el tiempo y si la Argentina va en camino a convertirse en un país más normal, es inexorable que llegue la competencia, con marcas como Forever 21 o H&M, que ya están en la región.

- Can it compete with an Argentine brand against these giants?

- Of course it is a very strong competition, but with Rhapsody we already prove that we can be an international player.The biggest operation we have outside is in Chile, where all the big players are.And the truth is that rapsodia works very well.One of the things that led the people of Catterton to invest in us was to see how a brand born in Argentina had been able to transcend the borders and was competing equally outside.It is no accident that Rhapsody is more than ten years ago in Chile and Mexico.Not that we go to the world yesterday.

- What is the potential they see in the clothing business?

- Today with rapsodia and the rest of the brands we are almost at US $ 200 million annually and our idea is to reach US $ 400 million in four years, from an organic growth to which some acquisition can be added, not necessarily in Argentina.In the region we see many opportunities.

- Are you looking at more brands to buy?

-All can be.In this business you can never say here we arrive.Whenever a Marcahay is bought to digest it, but I do not rule out to take a new step.The clothing market in Argentina is very atomized.According to a study we did three years ago, the entire business in the country moves between US $ 10.000 and 12.000 million annually, including clothing and footwear and counting all social levels, from clothing in shopping malls to which it is sold in supermarkets and what is marketed via informal fairs.Taking this data into account, today rapsodia sells US $ 150 million, indicating that the potential remains huge.On the other hand, to hit the jump it is necessary to have a scale and we are convinced that technology and logistics are fundamental to grow

- What are missing to complete the portfolio?A sports brand?A man of man?

–Aly, our main idea is not to move from the positioning we have.Today we aim for a woman of medium and a half high level.This is our focus today, but opportunities can also appear in clothing for children or men.Sport is a bit more difficult, because in this segment the largest business is at the average low level and would imply a change in the group positioning.

- Are they looking at the Brazilian market?

–Brasil was a bitter drink.We entered in 2008, with three stores in San Pablo and one in Porto Alegre, and we came to build a very ambitious business plan.At the entrance the brand walked very well and even the people of HERING called us to take representation.But the problem was that we arrived at the wrong time.To launch ourselves to a market like the Brazilian we should have entered better armed, with more capital to be able to make a larger landing, in order to achieve the scale to make a greater jump.

- And now they analyze return?

- In our growth plan we clearly have two markets that interest us a lot.One is Brazil and the other is the United States, where we are convinced that there is an opportunity for a brand such as Rhapsody, especially in the state of Florida and the West Coast.In the US.UU.We also have the advantage that we have a partner like Catterton, who knows the market and the American clothing business, because several local brands such as Hanna Andersson (children), Rhone Apparel (Fitness) or Third Love (underwear) already operate (underwear).And we must not forget that the main individual shareholder in Catterton is Bernard Arnault's family, which is the owner of LVMH.

- At any time were they about to launch an Argentine Fast Fashion brand?

–It's a project that we analyzed and we were even about to launch it in 2009.We get to buy the first jam of garments. Fue justo en el momento en que C&A se fue de la Argentina e intentamos adquirir su negocio, pero los holandeses no quisieron.They preferred to close everything and compensate people.With merchandise on the way to Argentina, we decided to abort the project for a political issue.Francisco (from Narváez) had won the elections to Nestor Kirchner and in a business with a high imported component, we had a Damocles sword because we depended on the supply from the outside and the restrictions that the government put at that time to import to import to import.

- And they analyze refloat the project?

- We are doing something in Uruguay.There we had a brand of their own clothes in our supermarkets that worked very well and decided to open the first exclusive place. Se llama BAS (Basic & Simple) y de entrada fue un éxito.Today we already have thirteen premises and this year we are going to open another seven, with the focus on the interior of Uruguay.

- Are there plans to bring the proposal to Argentina?

-Can be.But it would only be viable if Argentina shows a more open country with greater stability because it is a business that depends a lot on importation.

Beyond fashion

- Why are they as strong in markets such as Uruguay or Ecuador and not so much in Argentina?

–I think it in part has to do with Francisco de Narváez's passage through politics.At the time, he thought that getting into more sectors in Argentina could be a problem because sooner or later business and politics play.The reality is that during these years we saw many opportunities in all types of industries, from utilities to retail, but I think it was a healthy decision not to have expanded more.The political issue also led us to unintentionally in some businesses, such as the La Rural property operation, which we sold in 2012.

–The group has a very strong past for supermarkets in Argentina, with aunt.How do Carrefour crisis evaluate?

- I don't know the details but having lived the retail I think the sector has a very important problem that is the cost of operating in Argentina.Supermarkets is a business of margins as small that issues as tax and labor costs or the high level of litigation become key factors, which undermine profitability.

–Arealize to return to supermarkets in the country?

- I never discarded it, because supermarket is in the family's DNA and, in fact, we are venturing into the sector in other countries, such as Uruguay and Ecuador, and we are doing very well, but there is nothing defined.

- How do you see the future of the retail business?

–The retail is going through a gigantic challenge linked to the emergence of technology, which is doing a transformation process, and it is likely that in the next five or six years we will see in this field the changes we did not see in the last twenty or thirtyyears.To this is added the challenge of realizing the power that the client took, which once again occupied the absolute centrality of the business.Today retaining a client became a much greater challenge.And the other challenge is logistics.E-commerce is a reality.In the United States Amazon is already the main clothing seller and in China he managed to sell on the last day of the singles more than US $ 26.000 million, while at the local level the e-commerce grows at 24% annual rates, every year.

- They also had one step through the media business ...

- We had partners in the América Group, but as of 2012 we decided to focus on what we know how to do.For this reason, we decided to sell our actions to Claudio Belocopitt and in media today we only keep the chronicler.It is an elite medium, very respected, which is read by the 2000 people who make decisions in Argentina.And beyond that today it has a good management and it is a very neat business and gains money, there is something else.Francisco is convinced that you have to safeguard him and he will not sell it to how much.

- How does the latest movements of the economy affect the investment plan?

- I think something similar to those that happens to football happens to us: we have the best players, but it is difficult for us to engage as a team.On an individual level, in Argentina we have a lot of talent, but we fail to function as a society.Naturally this turbulence will generate a slowdown of the economy and see a fall in consumption.Cars sales are going to suffer, because many who were analyzing to change the car, they will think twice as much as they do not have a silver problem.Something similar can happen to mortgage credit and real estate sales.But still try to see the glass full and I think the government, beyond having made some mistakes, is trying to do the things to do.

Retail World: Holding numbers

A commitment to clothing

From a small place to Las Cañitas to an international player in the textile world

1999 - First steps: The Rhapsodian clothing brand is born, by the hand of entrepreneurs Sol Acuña and Josefina Helguera (photo), which add as a partner in the project to Francisco de Narváez.

2003 - From Street to Shopping: Rhapsodia decides to make the leap of Las Cañitas to the world of shopping and debut with a first place at the Unicenter Shopping Center.

2006 - International Debut: The Argentine brand crosses the borders, with the opening of the first branches in the markets of Chile and Mexico, to which Colombia, Paraguay and Uruguay later are added.

2008 - Bitter drink: the rapsodia raid in the Brazilian market ends badly and the brand decides to close the premises that had opened in San Pablo and Porto Alegre, after not reaching its goal of economy of scale of scale.

2016 - New partner: The L -Fund, controlled by Bernard Arnault's family and led by Dirk Donath, is incorporated as a rack partner, with the aim of promoting the internationalization of the brand.

2017 - Purchasing: The Fund L Catterton and the Narváez Group undertake its first purchase operation as partners and through the Rapsodia Investor firm they specify the acquisition of the Argentine brand of underwear Caro Cuore.

2018 - Baby look: the two partners specify their second purchase with the acquisition of Baby Cottons, the clothing brand for babies and children, with presence in Argentina, Peru and the United States.

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