Olympikus bets on a “factory to feet” concept to beat competitors – 03/14/2023 – Na Corrida

Olympikus bets on a “factory to feet” concept to beat competitors – 03/14/2023 – Na Corrida

What does it take for a piece of fabric, foam and rubber to turn into a pair of sneakers and reach consumers’ feet?

Roughly speaking, the raw material needs to be cut, glued, pressed and packaged in a factory until it becomes the final product. From there, the shoes are sent to the distribution channels (generally stores), in order to be sold and delivered to the consumer.

Getting it right at all stages is the goal of any manufacturer of sporting goods. Getting just one of them wrong is enough to turn a potential success into disappointment.

In recent years, Olympikus – Vulcabras’ 100% national sports line – has focused its energies on the first part of the equation. The brand was seen as a kind of ugly duckling of sports shoes. The focus was to conquer the consumer through his pocket, not through his feet.

It should be noted that the movement was not restricted to Olympikus. Since 2018, the entire Vulcabras has changed. He transferred Azalea to Grendene, focused on women’s fashion. At the same time, it licensed the sporting goods brand Under Armor exclusively. In 2020, it was the turn to take over the national production of Japanese Mizuno.

Having defined the company’s sports DNA, Vulcabras accelerated investments in research and technology, which led to a reformulation of the entire line of Olympikus running shoes: the dean of this transformation, the Corre 3 model, is only entering its third year of existence.

Then came Corre Grafeno, Corre Vento and, more recently, Corre Trilha. They are all part of a movement that is still ongoing, but which is already bearing fruit.

Improved product quality translated into sales. According to the most recent financial report for investors released by Vulcabras, the number of sports shoes produced by the company increased from 17.5 million in 2021 to 19.9 million in 2022 – an increase of 13.5%. The sports footwear segment already accounts for almost 65% of all Vulcabras production (which includes Under Armor and Mizuno). While the company doesn’t officially break the data down by brand, Olympikus is estimated to account for approximately half of those numbers.

The market has evaluated this transformation positively. In 12 months, the company’s shares rose by 11.5%. In the same period, the main reference index of the São Paulo Stock Exchange (Ibovespa) was negative by 7.5%.

From the factory to the feet

Producing competitive sneakers in a market where there are more and more options for consumers is essential, but it only partially explains the good results. Another part of the equation – and one that Olympikus sees as one of its differentiators – is the ability to ensure that it stocks shoes throughout the year.

The overwhelming majority of high-performance running shoes sold in Brazil are imported. Although many sports equipment companies have national production, it tends to be restricted to entry-level models. The most expensive ones are invariably imported. Among the main brands available on the market, only Fila and Olympikus produce 100% of their sneakers in Brazil.

The logistics of supplying the market with footwear from abroad is challenging, to say the least. If there are too many orders, the model risks running aground and being sold at huge discounts months later, in exchange for the collection. If the order underestimates demand, sales are lost and consumers eventually switch to competing brands.

To be more assertive in ordering, manufacturers present their models up to a year in advance to large retailers, who make an assessment and estimate an initial order for the shoes. All this anticipation is justified. The period between the retailer placing an order, it being passed on to the import area and the shoe finally arriving at the runner’s feet can take months.

And that’s where Olympikus sees its differential. “While our competitors depend on imports that can take months, Olympikus manages, in a few weeks, to receive a large order and deliver it anywhere in Brazil”, says Márcio Callage, CMO of Vulcabras.

To show how the process works in practice, the company invited journalists and influencers to visit its main factory in Horizonte (CE), just over an hour from the capital Fortaleza, where approximately 11,000 people work in three shifts.

The production of sports shoes, despite all the technology involved, is still very manual. This means that there are people on the production line focused exclusively on putting glue on the sole of the shoe, and others who spend the day putting laces on the shoes. According to Olympikus, each shoe goes through 120 people before being packed. Multiply that by 50,000, the estimated number of pairs manufactured daily in Horizonte, and you’ll have an idea of ​​the size of the operation.

Although old models can still be seen in the corridors of factories, little by little the production line begins to turn to new models, which arrive in stores in the middle of this month.

In the Corre line, there are three updates and one release. The Corre 3 (R$ 499) changed little compared to the previous model. It gained new colors, a perforated insole to improve the drainage of moisture from the feet and had adjustments in the material of the upper. The Corre Vento 2 (R$ 449) is even lighter, and weighs only 168 grams, five less than the previous version. The model with the most significant changes was the Corre Grafeno 2 (R$ 799). The second version of the performance shoe features a thicker graphene plate to ensure better energy return on longer runs, in addition to a Michelin rubber sole.

Olympikus also presented Corre Trilha, the first tennis line for competitions offroad. It resembles a more structured version of the Corre 3, with reinforcement in the toecap and Vibram rubber. Its debut price is R$ 599.

Source link