Arezzo applies "fast fashion" model and sales grow

Inflation, rainy summer and many bills to pay. None of this prevented the consumer to stay away from the stores of Arezzo in the first quarter. The company increased sales of its four brands of shoes and handbags-Arezzo, Schutz, Anacapri and Alexandre Birman-without sacrificing margins.
The company opened more stores (franchise and own), invested in marketing and launched products. The strategy resulted in increase in volume sold. Net revenues grew by 24.6% to r $ 201 million, while the costs advanced 18.5%, to R $ 111 million in the period.
The turnover of the accessories in the shops is a points which should be increasingly explored by the group. "Being ' fast fashion ' shoe is the proposal of our business," said Alexandre Birman, President of Arezzo, yesterday to the value.
More than one hundred suppliers produce for the group, and the delivery of items in stores is constant-reaches five per week. The proximity to the production allows the company to respond quickly to trends, producing to put in showcases what is fashionable in the month. The shoes are national, and 40% of bags, imported.
Arezzo has a factory in the region of Vale dos Sinos (RS) of 10% of products. The company develops parts and transfers for independent production, also in the South of the country.
The fast-paced inventory spare married the opening of shops, via franchises in the first quarter and boosted sales. The volume of pairs of shoes sold grew by 23.2%, and handbags, 34.5% in the period. The number of stores increased from 345 to 400-were 57 own 23.9% increase, and 343 franchises, 14.7% more than in the first quarter of 2012. Prices should remain stable in 2013 and, if any adjustment is performed, should be below inflation, said Birman: "our performance was in volume of bags, not on price. Grow with volume ".
Labor represents 50% of the cost of the product of Arezzo, and the collective, above inflation, affect more than the price of the raw material, which does not suffer from external pressure. "Leather has an impact on the production cost of less than 25% and has remained stable," said Birman. "We were able to keep the gross margin and maintain stable prices in the store." The gross profit of Arezzo grew 33.1% to r $ 89.4 million, and gross margin increased from 41.6% to 44.5% (the highest since 2010).
The footwear sector grew 5% in the quarter, and Arezzo, 20%, according to Birman. "We are gaining market share."
The result of the quarter was "in line with the expected", said Birman. Net profit climbed 78.5% to r $ 19.4 million. But the 2012 base had a non-recurring effect which, when deducted, the advance is 20%. In 2012, the Arezzo terminated a contract with a service provider and paid a fine of $ 8 million, which generated non-recurring expenditure in the box. Later, hired another company, with lower cost. Although accounting expense, pay the fine was investment decision, says Birman.
According to the Chief Financial Officer, Dscc, Samuel pulls the growth for three years and must continue so in the medium term because of franchise openings. In 2011, the Schultz had a franchise; in 2012, opened 22.