Mario Polegato: A shoemaker famed for being one step ahead
The Business Interview: Cutting-edge technology and high-profile endorsements have built the Geox brand, its chairman and founder tells James Thompson
Thursday 05 May 2011
Mario Polegato, the chairman and founder of Geox, has done rather well out of his 16-year quest to rid the world of "smelly feet", at least for those wearing rubber-soled, stylish Italian shoes.
Instead of pursuing his dreams through his wealthy family's wine business, the Italian set up a shoe firm in 1995 after developing a "unique" breathable shoe technology that combines a perforated sole with an inner membrane that expels sweat without letting water in. With a little help from Geox fans, including Sir Paul McCartney, Peter Andre, Katie Price, and the actress Kate Winslet, Geox captured the imagination of shoppers worldwide.
After founding the company with just five people in 1995 and listing it in Milan in 2004, Mr Polegato has overseen the growth of Geox into a global brand with more than 1,000 shops in 103 countries, from the UK to China, and 30,000 employees. Last year, it delivered annual sales of €850m (£765m), although its revenues fell marginally by 2 per cent.
Mr Polegato, who speaks in slightly broken English and occasionally defers to his interpreter, says: "Geox is a phenomenon not only in Italy but also in the world."
While it has no doubt been boosted by celebrity endorsements, Geox has developed about 100 variations of its technology and recently sealed three substantial deals to broaden its appeal in the sportswear market.
Last year, it completed a five-year contract worth a reported €50m to take over the sponsorship of the ProTour cycling team Footon-Servetto to form Team Geox. Proving its mettle, Geox soon signed up two former legends of the Tour de France, Giro d'Italia (which this year starts on Saturday) and Vuelta a España championships: Denis Menchov and Carlos Sastre. In July, Geox will also unveil a line of clothing and footwear, based on its unique breathable technology, for Max Biaggi, the 2010 world superbike champion. But above all, in terms of its profile, Geox scored a much bigger coup last year by signing an agreement to supply footwear to Red Bull Racing, the 2010 Formula One champions.
As its technical partner, Geox has designed and produced unique shoes for Red Bull's drivers, Sebastian Vettel – who won the drivers' championship last year – and Mark Webber, which they have been wearing at this year's grands prix.
On unveiling the deal, Geox said the patented shoe technology ensures an "excellent perspiration performance", and means the shoes, made from Kangaroo leather, are fireproof and able to withstand high temperatures, tension and physical stress.
Speaking in London's upmarket Covent Garden Hotel, the passionate Mr Polegato says: "Vettel said to me: 'I am really proud of this kind of technology'." The key quality of the Red Bull drivers's shoes is their "breathability", says Mr Polegato.
Vettel seems to be doing rather well in his Geox shoes, having won this year's Australian and Malaysian grands prix already, as well as taking second place in China.
After each grand prix, the drivers' shoes are shipped back to Geox's laboratory to be cut, tested and analysed. In fact, the rest of Red Bull Racing's 80-strong team, including mechanics, will wear a different, but exclusive, line of Geox shoes at the trackside.
And in terms of direct shoe sales, as opposed to global exposure, it is this range that will lead to a more identifiable benefit to the performance of Geox, which delivers 39 per cent of its total sales in Italy. The brand launched an official Geox-Red Bull Racing collection – based on the racing team's hi-tech shoes – at its partner footwear retailers and its own shops in March. The range features replica styles for motor-racing fans, as well as "trend-led styles" for everyday use or as sports shoes, says Mr Polegato. A drive to extend the reach of Geox – which is now the world's second-biggest casual-shoe retailer after UK-based Clarks – has clearly been a passion for Mr Polegato. Geox launched in the UK in 2004 and now has six company-owned stores and a presence in 400 multibrand shops on these shores.
The retailer plans to open two more stores in London later this year and Mr Polegato says: "In the UK, people appreciate the quality of leather and design etc [of Geox]". The range of shoes sold here are slightly different to those in Italy due to the wetter and colder climate in the UK. While footwear, including women's high heels and trainers, accounted for 86 per cent of its sales last year, Geox has branched out into clothing, jeans and jackets.
Among its latest technologies are its Amphibiox breathable, micro-porous membrane for shoes, which stops water getting in. It has also developed a patented technology for casual jackets where the breathable membrane is attached to the shoulder, as this is where heat rises to.
In addition to its best-known rubber, leather and apparel patents, the company's ability to innovate and deliver a constant stream of these and other new technologies is at the heart of the Geox strategy. Mr Polegato explains: "The goal is to innovate ahead of, and to anticipate, the market."
While Geox makes only a tiny proportion of its shoes in Italy, the company employs about 700 people at its Montebelluna headquarters in the northern province of Treviso, which is home to its research and development facilities.
Here, it has a 15-strong team of technical engineers, chemists and physicists who mainly research perspiration and human-generated heat-movement patterns.
However, it has not all been plain sailing for Geox recently. The company's pre-tax profits fell by 20 per cent to €90.2m in 2010 and it has given warning that rising raw-material prices would put pressure on its margin in the first half of this year. However, Geox's performance improved in the second half of last year and it struck a positive note on this year, adding that orders for its spring/summer season this year were up by 2 per cent.
Certainly, few would bet against Mr Polegato, who owns 71 per cent of Geox, growing the business. His personal fortune is estimated at $2.3bn, according to Forbes, and he has consistently shown that when it comes to tackling the universal embarrassment of "smelly feet", Geox has the answer in the shape of a stylish Italian product.
"This is a revolution in the shoes business because this solves a problem for humanity not just for specific people," he says.
Path to riches
He had been lined up to take over his wealthy family's Villa Sandi wine business, but Mr Polegato struck upon a more lucrative idea at a US wine conference in Reno, Nevada. After taking a walk in the area's sweltering heat, he pierced his rubber-soled shoes with a knife to release heat. After developing this idea in the workshop of a small footwear company owned by his family, he created what he calls the first "breathing shoe" and patented it.
A life of Bond and sports cars
One of Italy's richest men, Mr Polegato likes to collect vintage motorcycles and sports cars, including a Ferrari and Lamborghini. He lives in the Villa Sandi vineyards in Italy and likes any James Bond movie. Mr Polegato made his son, Enrico, Geox's deputy chairman in 2008.
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