“We are true to our philosophy: our company produces only leather shoes.” Victor Kuntz.

Last season was a special one for shoemakers: the market situation changed due to the fluctuation in the exchange rate. Viktor Kunz, CEO of Caprice Vostok LLC, spoke to Shoes Report about how this affected Caprice shoe sales.

- Victor, how have changes in the market affected sales of Caprice shoes?

" We can say we haven't seen any market contraction and continue to grow at double-digit rates, while taking a very cautious and responsible approach to pricing. We understand that consumer purchasing power has declined, and we strive to maintain prices at an appropriate level."

- How much has your wholesale price increased since the first currency jump? As you remember, during this time, the currency has doubled ...

" Of course, we didn't double the price. I think the wholesale price of our shoes has increased by about 15% compared to last year. Taking into account the increased cost of production in Asia and the increasing exchange rate, the cost of production has increased by almost 40%. This shows that we've taken on a lot ourselves, sacrificed our profitability, and, in addition, invested in production optimization."

- How long do you expect to keep prices at the current level? See how the buyer will react?

- Of course, we are looking at how the end consumer reacts to retail prices, and we still believe that the economic situation will stabilize.

- Do you think that the course may return, or, rather, hope that the market adapts to the situation?

More likely the latter than the former. But we haven't lost faith that the exchange rate will return to some of its previous levels.

- How do Russian clients of your company react, buyers to rising prices, have they not reduced their purchases?

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" On the contrary, our buyers are ordering more and more. They see that we're trying to offer them good prices. We've made some changes to the collection to reflect the changing needs of Russian consumers; the fall/winter collection included budget-friendly styles, and they were in great demand."

- And how did you manage to offer inexpensive models for the Russian market? Did you use cheaper materials in the production?

No , we didn't take that path; we remained true to our philosophy – our company produces only leather footwear. But in a crisis, everyone faces the challenge of surviving, staying afloat, and that's only possible with mutual assistance from market participants and a partnership with our customers. We have a concept at our company called a recommended retail price, below which we cannot sell (this is the price before the sales period). We set recommended ruble prices for a year in advance. Therefore, buyers, understanding that even a year later, when the product goes on sale, the price will remain unchanged, chose to buy our shoes. This essentially explains the growth in Caprice shoe sales. While buyers previously inquired about the price of shoes in stock, now they primarily inquire about the retail price.

In addition, we have provided our customers with additional service - in Moscow and the Moscow region, our company assumes the delivery of goods to the door of the store, and in the regions to the warehouse. In terms of retail support, we conduct promotional campaigns for store sellers, encouraging them to expand knowledge about the collection and transmit this knowledge to end users.

It is important for us that not only buyers know our brand well, but also personnel who interact directly with the buyer. According to the terms of the promotion, the most successful seller who makes the most Caprice sales for a certain period receives a prize from the company - a certificate for the purchase of one pair of shoes of our brand. We have a fairly wide assortment matrix - it has shoes with increased completeness, sport and fashion shoes, buckleather shoes ...

The seller must offer the buyer something that interests him, be able to talk about the innovative technologies used in the manufacture of shoes. Incentive promotions push sellers to study the brand and bring this information to the buyer, and as a result, our shoes become recognizable. We have been running such programs for many years. First, we tested them on the closest customers, and now we introduce them quite widely and, thus, by small means, we achieve a significant effect in sales.

- And were there any changes in sales as a result of last season?

During the fall-winter period of 2015/16, retail sales certainly declined. But this was due less to the economic situation than to weather conditions: we had a long fall and a short winter, resulting in lower demand for winter footwear than usual. Despite this, interest in our brand from retail customers hasn't diminished.

Do you plan to support the brand in Russia in any way? Perhaps you'll hold special marketing events? Of course, we try to support our buyers and regularly participate in all exhibitions. At the EURO SHOES exhibition, which took place in February at the Sokolniki Exhibition and Convention Center, we held our third shoe show. We also held a training seminar for Tervolina salespeople and administrators at the same exhibition. Maximilian Mang, Marketing Director from Caprice's German headquarters, attended the seminar. He spoke about the innovative technologies used in our shoe production, the new Caprice summer collection, which is now available for purchase, and answered numerous questions from salespeople.