Pavel Gekhtin: “You can’t save on a product now!”

Paul than you explain an almost double increase in orders?

- Speaking of facts. Retail sales in the fall and winter of the 2008 year were worse than at the same time in the 2007 year. On average, sales fell by about 20%. Moreover, in some regions, for example, in Western Siberia, where the air temperature is about -20 degrees, this figure was 10%, and in Moscow and the region from 30% to 40%. This is partly due to weather conditions, but the main problem, of course, is a decrease in consumer activity.

Wholesale companies, which lost at the jump in the dollar and were frightened by forecasts of a further depreciation of the ruble, almost halved their purchases (production).

Thus, we can say that the demand has decreased by 20-30%, and the supply by 50-60%. In addition, after the closure of the Cherkizovsky market, companies that traditionally bought footwear there began to look for new suppliers and come to us.

Affect the growth of orders and economic changes in China, where about 80% of all shoes are produced. Since January 2008, more than 5000 shoe factories have closed in southern China. Reasons: US and European customers reduced orders; salaries in the agricultural sector rose to urban factories, as the Chinese government decided to support the peasants (as a result, a shortage of labor); the state ceased to support producers of consumer goods.

All taken together and led to an increase in orders from system companies operating in the low and medium-low price segments.

If you recall the 1998 crisis of the year, then only cheap shoes were sold, but because of the shortage they were sold with a bang. I remember the line in our office for Elizabeth shoes long before the office opened. Today the situation for such companies is even better: the dollar does not jump so that you need to change the currency daily so as not to lose course, and if demand for 20% falls, production (supply) will fall by 50% at least by spring.

Yet The change in the exchange rate is very worrying for retailers. You offers some forecasts - What will happen with course and how work next?

- The central bank of 23 on January 2009 established the upper limit of the technical corridor of the dual-currency basket at the level of 41 rubles, which corresponds to 36 rubles. for a dollar. For shoe makers, this means that purchase prices have risen by almost 50%.

Wholesalers are in the same difficult position. Imagine if in the fall we shipped shoes at the rate of 24 rub. per dollar, and if there are companies that pay for these supplies only now, this means that when converted to rubles, we lose almost 50% of the shipment amount. This is serious. Here we are greatly helped by the partnerships that we have developed over the long years of working with clients. Retail companies understand that fighting for the ruble price is not very correct right now, and we can find a compromise so that, for example, the wholesale company incurs 20% loss due to exchange rate differences, and the retail company incurs 20%.

For retail, in turn, now, in fact, the only way to save customers is by not raising prices and working on the back. It is difficult to do, but in principle it is possible.

I believe that it is easier to work out this season without profit, but to maintain the order of prices. In the USA, expensive stores are already selling at 80% discounts - just to get people to come. And people come and buy stocks even the year before last collections.

We have now again earned all the rules by which Russian business worked in the 90's. In 1998, we were the only company that kept prices unchanged, and we had lines in offices. Thanks to this, we are still in the market.

In 2008, the era of stable business is over. The market has moved to a new stage: now branding, the marketing approach have stopped working. The one who knows the situation best will survive, the one who reacts the fastest, the closest to consumers - the one who finds the most opportunities for savings.

And on what can I save? Reduce costs in production, in distribution?

- I know that some companies have already begun, for example, to change materials - to use cheaper soles, instead of natural fur to lay artificial fur. This is not an option !!! You can’t save on the product now. People already have less and less money, you can not give them a reason for them to be disappointed in the products.

You need to save on another. For seven stable years, companies have grown, managed to grow in many departments that are not directly related to business. Now is the time to cut them. And not a piece of the tail of the tail cut off, but seriously review all the processes in the organization. The company must imagine that it starts a business from scratch and find the product that can be sold. All efforts should now be focused on turning money around as quickly as possible.

Another common mistake companies make is not to hold onto the brand with all their might. You need to look only at sales.

But as, to your look, customer preferences will change?

- Customer preferences are already changing. First, everything that can be repaired will be given in to repair. Secondly, shoes will be bought closer to the season: until the snow falls, shoes with natural fur will not be taken, and there, you see, discounts will begin. Young people will continue to buy fashionable shoes, but at lower price segments. The time comes for artificial materials: stretch boots, textile sandals, satin and artificial leather - the trend of all crisis situations.

What will happen with wholesale and retail prices on shoes?

- It would be good if we had the opportunity to pay for imported goods in national currency without reference to the dollar as a clearing currency - for example, to pay the Chinese in RMB or rubles, so as not to be tied to the dollar, which is growing. Then prices would be easier to keep.

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If your retail partners contact to you with the request about deferment payment as You will act?

- This issue needs to be addressed with each client individually. During the crisis, each wholesale company wants to sell goods at 100% prepayment, and each retail company - to receive a deferred payment. It's clear. We are not an exception and prefer a purchase “in cash”. Moreover, there are many factoring schemes that banks are very actively offering in times of crisis.

How critical is the change in rental conditions for your company? and lending?

- Rental rates are falling, and that's good! But interest on loans is growing. This is not critical for our company, we will save on something else. For example, in the supply of components to manufacturing plants, which we have been actively engaged in for the past few years.

Now, “Analpa” is introducing a Western methodology for managing internal business processes. how you rate success its implementation on this stage? Were corrected plans to introduce systems in 2009 year or did they remain unchanged?

- The technique is rather hybrid. We took into consideration two methods: Western and Asian. They chose the best from both and combined. It is too early to talk about the results, as the system is adapting to Russian reality. But we can already say that the efficiency of business processes has increased markedly.

In the fall of 2008, Analpa announced about opening new projects and expanding a package of marketing tools for more successful sales to the final consumer. Do you save you all these plans in 2009 year?

- Of course. We introduced two new brands to the market: KEDDO - shoes for active life and Marcello di nuove - fashionable women's shoes, developed by a group of Brazilian designers. Shoes of both brands appeared on sale at the beginning of the 2009 year. And also we are launching a pilot project of our partnership program in Kazan with our very reliable old partner.

What are the growth reserves at the company - human, technological, organizational?

- I would speak about a complex of reserves. And first of all human. I am sure that our main achievement over 16 years of work in the Russian market is an excellent work team. We are a big friendly family, which is always ready for any life difficulties.

Organizational - of course. Optimization of all business processes will certainly lead to growth. Technological matters are more difficult, but we are also working in this direction.

For the last year has changed and exhibition sector - side-by-side with key exhibitions where online retailers make orders, presentations are held as in MoscowSo and in the suburbs and abroad. how Do you thinkIs this a sign of erosion of the audience or a search for new market development opportunities?

- In 2008, the Analpa company took part in four MosShoes exhibitions, two Shoes Access exhibitions and presentations in Pokrovsky. This, of course, is not normal. All over the world there are two exhibitions a year - in accordance with the upcoming season. And this is usually enough. Outside presentations and a permanent exhibition in the office are a plus. Last year can safely be called a transition. Businessmen did not yet know which is better, and to whom the means allowed, they tried all the possibilities.

The results are as follows.

In the first place in terms of effectiveness is a presentation in the office. Large and medium-sized clients prefer to work in calm conditions with their favorite manager from one and a half to two hours, depending on the breadth of the assortment.

In second place - a presentation in the suburbs or abroad. They are mainly collected by customers who are average in volume of purchases, who come to make a selection at 5 – 6 companies and have a good rest. At presentations, you can meet new customers who simply do not have time to go to all stands at the exhibition.

In third place are exhibitions. Of course, you need to weigh the pros and cons and choose one exhibition. The effectiveness of the exhibitions is also very high. Firstly, a lot of small customers by volume of purchases attend exhibitions, and secondly, customers can compare many different collections, and if the collection is strong, then those customers who have already made a selection will return to increase the order. Again, participation in exhibitions is much cheaper for exhibitors than participation in a presentation.

What are the possibilities for combining shoe business community you are now see?

- The shoe community is united in the National Shoe Union and the Union of Tanners and Shoemakers. NOBS mainly unites system companies producing shoes for outsourcing. The second union unites domestic manufacturers. Retailers are trying to unite, but this is difficult, as they are competitors. Companies working with children's shoes have recently merged into the non-profit project “Children are the support of the state.” There are attempts to create interest clubs based on companies participating in presentations, but this process has only just begun.

Is it convenient Now is the time to open your shoe trading business?

- In my opinion, very convenient. The market is half empty due to the lack of offers on the cheap footwear market after the Cherkizovsky market closed. In addition, system companies are looking for ways out of the crisis and reduce production volumes. Therefore, now is the time to offer the market an inexpensive high-quality product, both in the wholesale and retail segments.