The SPIN OFF has met Matteo Sinigaglia, president, Replay. The Italian premium jeanswear and lifestyle brand hitting its 40th anniversary this year is not keen about celebrations and prefers to concentrate on its "king," the consumer, its hero product Hyperflex, and many new and ambitious projects, including a soon-to-be-disclosed collaboration with Hugo.
For the first time in the history of casual and the premium apparel markets, two brands are coming together. I had a meeting with the top management of Hugo Boss and I realised we have very similar visions. We are both dreamers, we have a great passion and the same drive. In my opinion, people need to dream. At the end of September, we will launch our project and I can assure you that we will give enough visibility to a project that speaks to a young generation. I'm excited about it.
We are quite satisfied with the present situation. Our company has obviously suffered psychologically from the pandemic, but in terms of business, we have been resilient. After a very good 2019, in 2020, we were able to calm the losses incurred during the pandemic, and in 2021, we jumped 23%, ending the year with sales of €287 million. After the first half of 2022, we expect another year of satisfaction that we could close with sales between €330 and €340 million.
How did it reach these results?
We have not changed our approach, but simply invested more in marketing and innovation by doing our job and staying close to our world.
Our business model is simple. It is not the result of a mathematical model, but we consider the consumer as a "king" and try to guess what are their attitudes to consumption.
And what did you discover about that?
Recently, much has changed. First, people buy differently and look for products that have "value per use", that is, they buy higher quality products that express their lifestyle. Denim, for instance, is one of the most used products in their wardrobe.
They also look for "brands with a purpose," that is, credible brands. The offer is much greater today, but people are informed and want to buy the best available product in that category.
Also, lifestyle has changed and everyone wants to feel as comfortable as if you were at home in every moment of the day. Therefore, casualwear is the only answer.
This high-stretch and highly comfortable product was born in 2013 from a consumer's need based on two main values-sustainability and wellness. As we had to express a much broader concept than comfort to make the wearer feel good, we applied sports performance to a casual garment.
Claudio Buziol invented this brand 40 years ago. His intuition was that of a genius who invented the aged jean. We added additional content to that jean, such as performance and comfort. Hyperflex, in fact, celebrates Buziol's genius and makes it contemporary.
In which sense can you say that Hyperflex is also sustainable?
Hyperflex is the synthesis of tradition and innovation. Every season, there is an upgrade.
We have moved from "reactive" sustainability, which, for example, focused on reducing the consumption of water and chemicals, to "proactive" sustainability, that is, we have tried to make the whole production cycle sustainable through the use of, for example, recycled fibers and the reuse of textile waste.
Probably, we will be able to make the process even more sustainable, though we also make these jeans develop in terms of greater lightness and performance. Sustainability and innovation are the two goals of our future path.
In terms of ESG (Environmental, Social and Government), we are not yet a benchmark, and we know we still have a long way to go, but our goal is to become one of the best-in-class. For example, we have set up a team that deals with certifications. We would like to achieve many goals, including, for example, being able to achieve high levels of transparency. That will be the work of the next few years.
Along with it, we do not have a chief custainability officer, yet, but in the future we aim to hire one from outside the company.
Everything has changed in this market recently. What changes in logistics did you have to deal with?
There is a logistical inefficiency all over the world. All companies from the sports, luxury and casual sectors, have had to deal with supply chain problems. In addition, an energy crisis is ongoing. It is the perfect storm. We have also experienced delays.
Brands, retailers and suppliers are all in the same boat. Everyone has to make efforts and the risk has to be shared within these three players. Along with it, strategic alliances can also play an important part. Though, the solution is not timing but precision of work.
It has been indispensable. We are bringing production closer to the market. For some product categories that are sold in Europe, it doesn't make sense to produce in China. Instead, it doesn't make sense to produce other product categories in Europe that are sold in China. We have already started to move some production to Europe, and we already produce more than 60% in the Mediterranean basin and Europe, that is, Eastern Europe and North Africa, like, for example, Tunisia.
In concrete terms, has this required organizational changes on your part?
Reshoring requires simplicity of supply. In terms of SKUs, for the past six years, we have reduced our offering by 50% by concentrating it in three main areas, namely denim, jersey and nylon-which is not the usual synthetic nylon, but a material made by recycling scraps.
However, you have to follow clear ideas to operate today and have to make sure you offer long lasting products. If you think about sports brands, for example, innovation is key, and it can need up to 20 years in R&D as real innovation is expensive.
Is sport important for Replay?
Our journey in sports began in 2016 with the launch of Replay Sport Lab, while we are now fine-tuning by making specific products. In the world of sports, we are like dwarves playing against giants. However, there is nothing sexier than dreaming big.
We move into athleisure because sports is winking at casual and these two different worlds are coming together. Just think of the color scale of sports. It has become much broader, and you see now see military green and sand hues, and no longer the old fluorescent yellow or orange. I like to express it this way: the casual sportifies the product, while the sport causalises it.
Which sports are most interesting to you?
We are interested in all sports, but right now we are focusing on tennis because, for example, unlike skiing or snowboarding, it is more inclusive. And that's why we have been Main Sponsor of the sponsoring the Rolex Monte-Carlo Masters tournament since March.