Shahin Asadov “Riker Vostok”: Formation of a collection - a mathematical problem

General Director of Riker Vostok Shahin Asadov talks about how shoe collections for the Russian market are being developed, and also shares the company's plans.

Shahin Asadov - CEO of Riker Vostok

“Someone believes that he makes fashion, and we produce what people need,” said Shakhin Asadov, the head of Riker Vostok. In an interview with Shoes Report, he spoke about Rieker’s approach to building shoe collections for its Rieker and Remonte brands, which are based on rigorous mathematical calculations and professional intuition.

How difficult was 2016 for your company?

The fact that orders for the spring-summer 2017 season began to grow after two years of stagnation is a confirmation that some recovery in the market has come. I assume that for the fall-winter season 2017 / 18, an increase in orders of approximately 15% can be expected. Of course, it is worth considering that Moscow and St. Petersburg are the first to react to the onset of the crisis, then cities with a population of over one million, and then the province. When Moscow and Peter complain, millionaires still trade well, when millionaires complain, everything is fine in the provinces. And now the reverse development is already underway - Moscow, St. Petersburg and millionaires have begun to recover, and small towns have just felt the crisis. Therefore, in general, we expect an increase in some territorial redistribution of orders - an increase for large customers and a decrease or preservation of last year's volume for small ones.

Have you reduced your wholesale prices due to the crisis?

Initially, for wholesale sales, we reduced prices in rubles by 10%, and the recommended retail prices remained at the same level, since during these two years of crisis, the trading margin was reduced for everyone. We did this so that people can move away from the crisis and start earning a little more. It can be seen that somewhere rental is growing, and retail expenses should be covered.

As a result of the crisis, many retail operators could leave the market. Do you have a feeling that their number has decreased?

No. During these two crisis years, we had clients who missed the season, but now they are returning. Judging by our partners, the share of those who closed the business is no more than 1%, and we have more than 1,5 thousand clients. Although the fact that places in shopping centers are being vacated and some shops are closing can be seen with the naked eye.
In February of this year, we were in Khabarovsk, Irkutsk and noticed that in some places where it was previously difficult to rent something, now they offer either rent or sale, the whole city is covered with advertisements, which means that someone is leaving. But our customers are expanding. In the same Khabarovsk last year, two new Rieker stores opened. If everything goes well, the store of our second Remonte brand will soon open there. In Sterlitamak, customers opened Rieker, and Remonte will open by April.

That is, in general, the mood is positive?

Generally positive, today in Russia there are already 427 stores with a Rieker sign, and if everything goes according to plan, then by the end of this year there will be more 450. However, it is very important for us not to allow large differences in either plus or minus. Well, if you can plan everything in such a way that there are no surprises.

That there were no course jumps?

As well as jumps in orders. We have our own factories, production must be loaded. But a sharp increase in the volume of orders is also not easy; you will have to quickly recruit employees.

What do you think about the labeling of shoes that they plan to introduce this year?

To be honest, I don't take the idea of ​​labeling seriously, because I don't see any sense in this for our segment. There are excise stamps in Belarus, so what? It is inconvenient, unprofitable and nobody needs it, except that the state earns a conditional 50 kopecks on it. This creates great difficulties for private entrepreneurs who import and sell shoes. I do not see what else this can lead to, except for additional costs, and everything will fall on the shoulders of consumers.

But, perhaps, with the introduction of shoe marking, we will be able to get adequate statistics on the shoe market ... Perhaps this will lead to a whitewashing of the market?

There is an opinion that this will help limit gray imports, but it seems to me that this is just a method of unfair competition. If the state is talking about this part of the shoe community, then it confesses its powerlessness to corruption ...

Your company buys leather raw materials, including in Russia. Are you satisfied with the quality of the material?

For several years, we bought leather in Ostashkov, a couple of years we purchase leather material in Nizhny Novgorod, and now we are negotiating with several leather manufacturers. Quality is generally satisfactory. In any case, we have no complaints that there is a big difference in the quality level of Russian-made leather and leather from other countries. From season to season we update about 70% of our collection. This season we also have five new blocks for Eastern Europe, there are eight more blocks that have been developed for the rest of the world.

Is pad replacement taking into account regional peculiarities of the leg?

Yes, and taking into account all the trends that are on the market. We record all changes based on sales statistics. If you look closely at our collection,
You can see elements of almost all the best sellers that are present on the market in this period.
Often people who have not tried to trade Rieker do not understand what is the advantage of our shoes. Many retailers believe that they order shoes for their retail more beautiful, more technologically advanced, from the best materials. But for some reason they do not receive such sales. And the main problem is that the manufacturer and the consumer often approach the assessment of shoes in different ways. Unlike the seller, who, as a rule, sells well what he himself likes, the manufacturer should not like his product. If a manufacturer falls in love with his product - that’s all, he loses his scent. Also, when you love a person, you do not notice his shortcomings, or they seem to you somehow special. But when the veil subsides, you see that everything was wrong.

Do you have a design team in Germany?

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We are a “strange” company, we have no designers: we have collectors and fashion designers. We try to optimally apply what is trendy. The main thing, as often happens in life, is to understand in what proportion it is necessary to use what is already being applied. Of course, we try to do something technologically better than others, more optimally in terms of price and materials. We see this as a mathematical problem.

That is, you study the demand - what they wear, what they buy ... Some part of the people, being conservatives, buy certain models all the time?

Not really, because we change our collection every year by almost 70%. We have accumulated over many years (Rieker was founded in 1874 year) enough indicators to assess possible changes in consumer habits for each subsequent year compared to the previous one. Of course, it happens, and we are mistaken when the market changes dramatically - for example, all of a sudden everyone begins to wear sneakers, or all sharply switch to high sandals. But there are practically no serious miscalculations. Because we do not change individual parts of the collection dramatically. We are changing to the extent that the market can perceive this change. 

But is it someone who determines?

We have product managers, here they are engaged in this analysis, they tell technicians - what and how to do, set the task to techno-logs and fashion designers. Of the more than 1000 models prepared for selection, ultimately about 400 remain in the collection.

The point is to first make a large collection, and then discard something that does not work?

No, there is no such task. Just every week we get new statistics. When they started making the collection, there were some priorities, two months later, others, and sales were constantly going on.
Therefore, we are the last to create our collection, everyone releases their collections and starts selling a month and a half earlier than us. Someone thinks that they are making fashion, but we are producing what people need. Therefore, other brands that produce ultra-fashionable shoes are like a lover, and Rieker is like a good wife. Sometimes you can run to the side, but you have to live with your wife, because it is long-term and reliable. You can run a life-long marathon with us, and you can also run short distances with others. But the worst thing is like in that joke - when you have sclerosis and an upset stomach - run and do not know where and why. Although this is a joke, many people really don't know where they are running, but do you know why? They haven't studied the demand.

Most “professionals” think they know what and how to produce. When their product is not for sale, they accuse the consumer of not having matured or understanding what they are offering. Every season, we start from scratch, studying the market in terms of consumption using our own methods. We believe that the consumer is always right in their choice!

Do you give your buyers any recommendations on what will work?

Firstly, all the models that we offer are designed with the expectation that they will be sold. But if you are a small client and you need 10-15 products, we can help you choose what sold well last season. You need to start with proven models.

Are there any serious failures in the collection or are the shoes about the same for sale?

We do not send for production items that have less than 2000 pairs of orders. If there is less, it is already a failure. But we can be proud of the fact that our East European models fall the least in terms of percentage. While in the Western European collection up to 40% of articles are not produced, we had only 5% of such articles last season.

Collections for different regions are very different?

It depends on how similar the sales are, only the numbers determine which trends fall into the collection and which do not. We had a lot of developments that did not go to Russia, but went to Europe or vice versa.

And did you have running models, now is it relevant?

A bit, and not quite sneakers. Indeed, in Europe there is now a boom in sneakers, and they accounted for up to 25% of shoe sales in Europe last year. But we have our own climatic features, and the collections for Western Europe and Eastern Europe fall-winter season are very different, spring-summer - less.

Buyers select a collection based on their idea of ​​what will be sold, and do not always guess. You try to focus on the taste of the end user, but present the collection primarily to buyers. How is this problem solved?

With a good retail owner, the mistake in choosing a collection is made no more than two seasons, then everything becomes clear. The retail owner, if he is studying the numbers, will tell his purchaser not to come from his own taste, but from what is for sale, or he will change the buyer.
If retail owners do not do this, their business will be minimized. In general, it is believed that only three percent of people have the gene for a successful trader. Among the best managers in the world there is not a single excellent student, because the businessman initially tries to approach everything optimally. So even at school, he already understands that part of the subjects studied in his life will not be useful to him, and he needs good grades only in certain disciplines, which he is trying to push. Natural-born entrepreneurs at this age begin to optimally approach all issues. And a person who tries to do everything as prescribed is just a good performer. For business, you need a flair and the ability to make decisions. The Germans say that the decision is made in the region of the solar plexus - this is not the head and not the heart, not love and not calculation, it is something else.

Interviewed by Marina Shumilina

This article appeared in issue 146 of the print edition of Shoes Report