Spartoo CEO Boris Saragaglia on overcoming 2022 and his ambitions for the company
Nicola Mira
A few days ago, French footwear e-tailer Spartoomanaged to keep its revenue stableBoris SaragagliaFashionNetwork.com
FashionNetwork: How would you describe the last fiscal year, in which war and inflation gradually disrupted consumption?
Boris Saragaglia: In H1 2022, we experienced a major Covid-19 wave in January, then in February the war in Ukraine started. Consumers found themselves caught in a situation characterised by more and more problems. We had to wait until July-August to see some improvement because, with inflation starting to rise, many consumers shopped during the sales. After a positive month in September, the issue of growing energy costs put more pressure on consumers. November was very tough for us. But December went well, thanks to a change in pricing strategy, and an in-depth market analysis. This enabled us to turn a profit in H2. In comparison, I believe that business for a player like Zalando
FNW: How did 2023 begin?
BS: Demand has been down between 25% and 30% since the start of the year. But data we get from the brands showed that this is also affecting our competitors, notably German ones. The situation is very tense: consumers are spending their money on food, and since this is a category where inflation is high, they then wait before buying other products, including footwear and apparel.
FNW: From your standpoint, do you think this situation will benefit entry-level brands?
BS: What’s certain is that purchasing frequency will decrease, for everyone. Then, when the average French [consumer] will be willing to spend again on apparel and footwear, which are after all primary necessities, they will turn to entry-level [brands]. And they’ll buy less, of course, and above all they’ll wait a little longer.
For more affluent consumers, little will change: ours is a made-in-France footwear brand that does well with products priced at €120-€150, especially thanks to the adjustments we made.
FNW: You are now operating 35 [physical] stores. Are you going to stop expanding in this direction, given the economic situation?
BS: In 2023, we will try to open about 10 franchised [stores]. Three by Aldo
FNW: Spartoo now sells pre-owned products. Is there demand for an alternative to Vinted?
BS: We’re too far from VintedZara
FNW: When will you enter the home decoration segment?
BS: We have recently lost two people in this area, so we put this activity on stand-by for the time being. [Home decoration] remains an opportunity but, in times of weak consumption, we’d rather focus our efforts on footwear, trying to offer attractive prices without spreading ourselves too thin.
FNW: How are your footwear sales currently split up?
BS: Children’s footwear accounts for 10-15% of our revenue. Men’s footwear accounts for 15%, and women’s for approximately 75%. One of our goals is for children’s footwear to account for a sizeable share of our business. Another is to rejuvenate our clientèle, currently centred on 35 to 40-year-olds. If we can bring the [average] age down towards 30, it will be good for us in the long term. Unlike our competitors, we aren’t chasing after teenagers. We’re fine with people of a certain age, who have money to spend, have an active, very busy life, and buy online for practical purposes. Much better than 19-year-old TikTok users, who are much more unpredictable. They have €100 to spend, order five t-shirts and return three, and then switch to another site. This isn’t our cup of tea, nor an interesting target in the long run.
FNW: Which segments are still to be developed, and is there room for acquisitions this year?
BS: We are always looking to expand in the luxury segment. But we already have a broad portfolio of brands that cover 90% of the market. There aren’t really any holes to plug, but for example we could always grow the sports segment a little more.
On the acquisitions side, we consider every opportunity. A huge number of operators are facing difficulties, but we are only looking: as long as consumption trends don’t change, we’ll remain extremely vigilant. We are heading towards the same deflationary measures of the early 2010s. When things go south, one must be careful, and keep one’s powder dry.
