Driven by the development of new products and its diversification into new categories, the world's leading producer of climbing shoes continues to grow by leaps and bounds, leading to a reorganization of its production in Northern Italy and of its sales structure. While investing more in R&D and marketing and opening its first full-price physical retail store, La Sportiva is about to launch its first online store, starting with pages in five languages for the European market.
Sales have been growing at between 20 and 25 percent a year at La Sportiva, and they seem likely to reach an annual level of €100 million two to three years earlier than expected, provided the reorganization will allow the company to respond to the growing demand. The total turnover will probably grow to more than €95 million in 2016 from €85 million in 2015.
A major contribution to the recent increases has come from an expanding clothing business and from new lines of ski boots and trail running shoes. The apparel collection is becoming a significant component of its total product offer, generating annual sales of about €10 million, and it has become profitable. It is selling particularly well in Switzerland through the local distributor, Ace. A very technical line with advanced materials has been developed for the Swiss market and for the Swiss Mountain Rescue Team.
The footwear line is becoming more diversified; offering products for climbing, mountain running, mountaineering, approach and hiking. A line of mountaineering shoes for children was introduced more recently.
Climbing shoes, which are still entirely manufactured at its own factory in Val di Fiemme, near the Dolomites, still represent the bulk of the turnover. They have a particularly strong position in the U.S., where seven of the top models sold in the country are branded La Sportiva. In fact, the U.S. is the largest market for the company, with sales of more than $20 million, and it is growing very fast, particularly in the higher segment of the climbing footwear sector.
The domestic Italian market represents only around 15 percent of the total revenues. The biggest market was previously France, where La Sportiva has just taken over full control of its local subsidiary after purchasing the remaining shares held by its former French distributor, Christian Ventrillard. He is retiring at the age of 76, after 31 years of involvement with the brand. La Sportiva's products are sold in 450 stores in France.
Aside from the U.S., where the company has its own subsidiary in Boulder, Colorado, the rest of the world is covered by agents and distributors who report to six area managers. Their number has doubled since the appointment of a new sales and marketing manager, Lorenzo Sani, at the beginning of 2015. He came from WP Lavori in Corso, the European licensee of Woolrich.
La Sportiva's sales have been growing briskly all over the world, with some exceptions. Above-average growth has been taking place in the Nordic countries, for example. They have become more or less stable in the important Russian market, after three years of steady decline. They have been somewhat disappointing in Japan, where the climbing culture is not as strong as mountain running, and in China, where La Sportiva continues to work through a distributor, Fulgent Sun, which has been manufacturing some of its shoe models for more than seven years.
To help keep up the momentum on the product side, La Sportiva is opening an “Innovation Center” in a dedicated building behind its factory that previously housed its apparel manufacturing facilities and a warehouse. While the prototypes are still made at its head office and a laboratory in Barcelona, the clothing line is now being produced by a third-party operator in the Italian town of Verona, and the logistics have been outsourced.
The prototypes of the future footwear styles are going to be conceived in a more secretive and secluded space of 1,000 square meters where 16 highly skilled engineers and technicians will be able to interact closely, using sophisticated equipment such as a new carbon vacuum machine for molds. They will also be able to cook their meals and sleep in the premises. They will be in a position to carry out experiments on an indoor climbing wall and test prototypes for other categories that may be added in the future.
The move of the footwear prototyping laboratory to the new innovation center has liberated desperately needed space to increase the production of climbing shoes at Val di Fiemme to 1,600 per day. With 250 workers, nearly 100 more than five years ago, La Sportiva is the largest employer in the valley. They have an average age of 31 and have been trained to perform varied tasks to reduce stress from repetitive work and to develop a career inside the company.
The more basic items in its collections are manufactured at its own factory in the Montebelluna area, two and a half hours away from its main plant, where wages are lower. Overall, 80 percent of the climbing shoes and 50 percent of all the 1.4 million pairs of shoes sold by La Sportiva each year are made at the two Italian factories. The rest is made in China.
Meanwhile, La Sportiva has boosted its marketing department to a staff of 15 people to help generate demand and support the sell-through. The company is spending around 7 percent of its revenues on a variety of marketing initiatives. It is particularly active on social networks such as Facebook, where it has more than 100,000 fans. The idea is to create a community of climbing enthusiasts who may be interested in the company's latest products.
The opening of single-brand shops under its banner is part of the exercise. La Sportiva wants to open ten, mostly franchised, in the next few years on the model of a flagship store of 100 square meters that was inaugurated in March at Cavalese, a village near its headquarters, showcasing its various collections. It recently expanded its outlet store across from its head office. A similar one is being opened near its U.S. office in Boulder.
As we have reported before, La Sportiva is very profitable. It has no debt. Founded in 1928, it is likely to remain for many years in the hands of the family of its 61-year-old chief executive, Lorenzo Delladio, although he gets many inquiries from many investors. His father Francesco, who passed away a few months ago, as we have reported, continued to be involved in the business, sharing the office with his son. The fourth generation of the Delladio family is set to ensure the succession through Lorenzo's 31-year-old daughter Giulia , who is in charge of strategic marketing, and his 25-year-old son Francesco, who is still studying.