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Shoe manufacturing is extremely complex, far more so than the clothing industry, says Peter Maree, owner of Corrida Shoes. Product development requires engineering, shoemaking skills and fashion knowledge.
This starts with the last – the form that the shoe is made on that must fit the foot but conform to the dictates of fashion. To produce the soles for a new design, 14 sets of engineered moulds consisting of a standard size curve and lefts and rights must be made.
This is the starting point before a single shoe can be produced. The cost must be amortised over the life cycle of the product. The challenge facing the industry, like most industries, is a diminishing pool of skilled designers and product engineers.
Maree tells finweek how he overcame these challenges to build his shoe empire.
How did you get involved in the shoe industry?
I went for job interviews at various companies after finishing my B.Econ degree at Stellenbosch University. Panther shoe company offered a two-year management trainee programme and I fell in love with the idea of making shoes after visiting their factory.
After finishing the trainee programme, I went to the UK to gain overseas experience in the field. It was in the 1970s and very few people were travelling or working abroad back then. I did not care that I was not paid to work in the factories, as I saw it as a valuable opportunity to get design and development experience and see how other countries were operating. The exposure gave me insight and experience of all the processes and factors involved in making good quality shoes.
The thing about shoemaking is that you really have to know something about every process involved in the manufacturing of shoes, along with a good sense of what is happening with the market.
When did you start Corrida Shoes?
On returning, I worked for various companies gaining experience in product development, marketing and brand management. I ran a company’s shoe factory during the last two years before I started my own company.
After 13 years’ experience, I had good grounding in the industry and decided to open up my own company. I was confident in my ability to compete with the existing businesses and wanted to create a business that would have my ethos and signature. Another reason, perhaps, was that I never really liked the corporate environment.
I started Corrida in Pietermaritzburg in 1983. The name came from Quincy Jones’ 1980s song Ai No Corrida, Corrida meaning bullring in Spanish.
Where did you get start-up capital?
A combination of personal savings, goodwill from material suppliers built up during my career and, ultimately, assistance from the banks. Banking was much more personal in those days. Bankers were involved with their clients, with bank managers being able to use their personal assessment of clients’ potential as motivation to grant credit. Were it not for our bank manager seeing our potential, Corrida would probably not have existed today.
I was also fortunate to start the company with a good client, Scotts. They encouraged small start-ups by paying on a weekly basis. These regular payments enabled me to meet the weekly wage bill and pay creditors on time.
Why did you start Tsonga?
We started Tsonga in response to the massive influx of cheap Chinese imports that flooded South Africa in the late 1990s. Most factories at the time decided to close manufacturing and import. I took the contrarian view and decided to create a niche African brand to sell around the world.
The name was inspired by the African legend that the Tsonga people were the first to make shoes to improve their hunting skills. This was the seed for the brand name – we wanted a uniquely African name that could be registered internationally. The plan was to make beautiful soft, flexible hand-stitched shoes with leather lining.
We launched Tsonga in September 1999 at the Global Destination of Shoes and Accessories (GDS) in Düsseldorf, Germany, where it was well-received. To grow the brand locally we opened our own retail stores aimed primarily at the tourist trade. The first store opened in Constantia around 2002. It was a big shift to go from manufacturing into retail as well.
Tsonga is also involved in community empowerment. How does it work?
We have bought a smallholding in Lidgetton, about 40km from Pietermaritzburg, where we make handbags and teach the community to hand-stitch shoes. Participants may take the shoes home and are then paid when they return the shoes.
What do you see as your biggest break?
In the mid-1980s, South African Breweries, through their subsidiary Coshu, bought up most of the men’s shoe factories in SA in an attempt to capture the men’s market. I realised that this offered an opportunity to create a dynamic, flexible competitor to compete with a large, slow-moving corporate. This was when I opened our men’s shoe division, which today represents 70% of our business.
And your greatest setbacks?
Perhaps our biggest setback was when I fell ill in 2008 and was sidelined for a lengthy period. Fortunately Adrian, my son, had joined the business and although still fairly inexperienced at the time, he, together with our general manager, managed to maintain momentum for the business during a very difficult period following the financial collapse of 2008. They have subsequently taken over the running of the business and have done a fantastic job despite the weak economy and collapse of consumer confidence.
What would you say has been the greatest challenge to the business?
The influx of cheap imports from China. We have managed to overcome these challenges by building strong brands and not being a commodity broker reliant on house brand business from the large retailers. In addition, we have developed an export market to Australia and opened our own Tsonga retail stores in SA.
What is competition like in the shoe industry?
Competition is fierce and comes from both local and international sources. The biggest challenge comes from India and China. They have the ability to mass produce shoes at very competitive prices due to their labour costs that are significantly lower than ours.
The weakening of the rand against major currencies have helped to remedy the situation somewhat.
What do you think has been one of the biggest contributors to your success?
The ability to adapt to the market, creative and innovative product development and a determination to succeed in the face of fierce competition.
Where are your main markets?
SA and Australia, where we have managed to maintain a competitive edge by creating niche brands offering unique products.
What has been the best advice or biggest lesson you have learnt?
To create long-term, sustainable brands. To survive in the shoe industry as a commodity broker in this day and age is extremely difficult.
This is a shortened version of an article that originally appeared in the 23 February edition of finweek. Buy and download the magazine here.
