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AN ENTERPRISING ITALIAN SOLE:
POLEGATO'S 10 STEPS TO SUCCESS AND CLIMBING
By
Lucy Gordan
Like Andrea Zanfi, 52-year-old Mario Moretti Polegato, trained as a lawyer and
agriculturist, is the epitome of an Epicurean Traveler. Both men's love
of wine and its promotion caused them to travel frequently on-the-job, but Polegato's
oenophilia is still taking him on a multi-step successful detour around the
world.
Twelve
summers ago, in 1992, after a wine convention in Reno, Nevada, to promote his
family's wineries, "Villa Sandi" and "La Gioiosa", both
located in Montebelluna near Treviso in the Veneto, Polegato, a passionate sportsman,
took a hiking vacation with his wife Licia Balzan, today honorary consul of
the Principality of Monaco, in the Rockies. When his feet could no longer
bear the heat nor he their bad smell, he borrowed a hunting knife from a gas
station attendant and cut several holes in the soles of his sneakers — still
his good luck charm — and one in his right hand with a scar to show for
it.
STEP
1: Cool, not cooked, feet and no more bad smell, yes, was his first step
in the right direction, but clearly not a long-term solution as a sudden rainstorm
and puddles soon proved to him.
STEP 2: Remembering that NASA's footwear and clothing were made of a
special material with millions of holes, too small to let in water but big enough
let perspiration out, a technology freak from an early age, Polegato traveled
to Houston and soon afterwards invented a similar membrane to fit between his
shoe's sole and his foot. As he'd hoped, it stopped water from entering
his shoe through the holes, but allowed the vapor from perspiration to evaporate.
STEP 3: With his airholes and magical membrane patented in 100 countries,
since he was a die-hard wine producer, Polegato first tried to sell the patent
to some of the big names in leisure footwear: Reebok, Fila, Nike, Adidas,
Diadora, Puma, and Timberland.
STEP 4: When they all turned him down, he decided to leave his younger
brother, Giancarlo, in charge of the family's wine businesses and resigned himself
to going it alone.
STEP
5: In 1995 he recruited five people to help him develop his dream shoe
"that breathes." He named the company GEOX for
the Greek word geos meaning the earth, and ox for oxygen or
x for technology.
STEP
5: A seven year miracle! GEOX now employs 2,400 people directly
and an additional 3,000 indirectly through subcontractors. Research (simulated
200-kilometer walks and water injections in heated shoes to simulate perspiration)
and design take place at headquarters in Montebelluna; but, because of lower
wages there, production is in China, Mexico, Slovakia near Bratislava and
Romania, where the GEOX
factory at Timisoara employs 1,750.
STEP 6: Thanks to GEOX's
success in Romania, 12,500 fellow- Italian entrepreneurs have invested there
and in 1997 Polegato was named Romania's honorary consul for northeastern Italy.
STEP 7: In 2002 GEOX began selling its shoes through Nordstrom (70 outlets)
and Dillers (17 outlets) in the USA. The company adapts the shoes' materials,
designs and cost to the country where the footwear will be sold. For
example, the same GEOX
model costs 10% less in Mexico, 5% less in Spain, 15% more in Germany, and 20%
more in the US than in Italy. In Germany, GEOX offers
darker colors and thicker leather than Italy's brighter tones and more elegant
materials.
STEP 8: For diversification, in 2002 GEOX developed
a patent for breathable clothing based on perforations on two special strips
in the shoulder area, which is where body heat and humidity collect.
Clothing accounted for 4% of the company's sales in 2003.
STEP
9: Still a privately held company (Polegato is its founder, president,
and only shareholder), GEOX's
sales more than doubled between 2000 and 2003, leaping from 92 million euros
($85 million) to 250 million euros ($310 million), 63 % in Italy, c. 30% in
the rest of Europe, and 5% in North America. Polegato's net gains grew
from 3 million to 27 million euros ($33 million).
STEP
10: In 2003, Italy's leading manufacturer of casual comfort footwear
and the eighth worldwide, Polegato was awarded "Best Italian Entrepreneur
in the World" by Ernst & Young Global — a recognition of which he is
particularly proud.
UPHILL
CLIMB
In 1998 Geox sold 1.4 million pairs of shoes; in 2003 6.5 million.
GEOX expects to sell 10
million pairs of shoes in 2004, more than twice the number of 2002. Polegato
expects to make a 12% post-tax profit on sales of 350 million euros ($410 million)
in 2004, but he still isn't satisfied.
With
198 stores in 70 countries, Polegato plans to open around 70 new stores in Italy
and 30 abroad in 2004. On March 16, GEOX
opened its first store in the United States at 595 Madison Avenue on the corner
of 57th Street, at the downtown end of Italian fashion mile; the second
of several US 2004 openings (two others in the NY area, Seattle, Las Vegas,
Houston, Miami, and Detroit) will be on 3rd Street Promenade in Los Angeles;
elsewhere: on Nathan Road in Hong Kong, and in the Couo-Dori-Ginza
in Tokyo.
In
2003 GEOX opened stores in Moscow, St. Petersburg and its
first in China, where by the end of 2005 it plans to open another 99.
It counts Bush, Berlusconi, Havel, Pope John Paul II, the Emperor of Japan,
and the Royal Family of Monaco among its clients and 2005 sales are forecast
at 15 million pairs.
REACHING
THE SUMMIT
According
to a March issue of Il Mondo, Italy's economic weekly, valued by several
banks, Merrill Lynch and Goldman Sachs at between 900 million-1.1 billion euros,
Polegato plans for GEOX, called "the Ferrari of Footwear"
by The Economist, to go public on Piazza Affari, Milan's stock exchange
during the last quarter of 2004 or, at the very latest, the first of 2005.
He believes GEOX will earn 550 million euros ($680 million)
in 2006, with its profits continuing to grow 30% annually.
In
his "free" time Polegato, who is always part-owner of the newspaper
Corriere Veneto , a supplement of Corriere della Sera in northeastern
Italy, enjoys his collections of Ferraris (a pastime he interested from his
father), race horses (one of his 15 is named "Geox"), German motorcycles
from World War II, and eyeglasses (he designs his own).
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