The stress of logistics leads Lumberjack to nearshoring. But not in Italy, where “the costs are too high for the brand’s positioning”. In the meantime, the investment in online sales has paid off, bringing total sales to 33 million euros in 2021, and with the prospect of reaching 52 million euros by the end of 2022. All of Lumberjack‘s strategies, a brand owned by the Turkish group Ziylan, in the words of country director Erkan Emre (in the photo) who we interviewed during the recent edition of Pitti Uomo.
What’s happening
What is your impression of the current market situation?
In 2020, the situation was very difficult, with a reduction in consumption and production. In 2021, we understood what had to be done and we recovered 35-40% over 2020, returning to pre-Covid levels. Today, however, nobody knows what exactly will happen in the future.
Is one of the key points supply chain management?
Definitely. This year and next year will be key to maintaining it. We have orders, but it is difficult to organise production. We believe we can meet 95% of customer requests.
What are the difficulties?
The cost of shipping a container from Asia has increased fivefold and this is reflected in the cost of a pair of shoes, which has increased by 7-10% compared to last year. In addition, we face timing problems which have increased from 3 to 6 weeks for shipments from China.
Nearshoring (but not in Italy)
Given this scenario, what choices have you made?
We have boosted production in Turkey, Portugal and Eastern Europe (Albania and Romania), reducing supplies from Asia. For leather shoes it is easier to transfer production, while for other product categories it is more difficult. So, evaluations and decisions also depend on the product category.
Are these changes temporary or permanent?
It depends on the situation. And the costs. I don’t think there will be any change in costs in 2022. Maybe services will improve. We will always have to weigh up costs and benefits, and reduce the risks of running into production delays. For some types of shoes that used to be produced in China, we no longer receive the finished product, but only the materials that are then assembled in Turkey.
What about Italy?
In Italy we only carry out a small production of premium suede boots. For our positioning it is difficult to produce in Italy because of the costs.
Leather
Do you buy materials in Italy?
Some materials are made in Italy, especially those used by companies in Albania and Romania for some models. For leathers and bottoms, the Italians are really good.
How much leather do you buy from Italy?
We use it for premium articles. Around 5% of the total purchased.
Markets and prospects
What kind of sales market is Italy?
It is a very important market for us. We have 1,000 customers and 300 shop-in-shops. In 2021, it grew less than other markets. For 2022, our focus is on Germany, Spain, Portugal and Russia.
Outlook for 2022?
We expect to reach 52 million euros in sales thanks to online sales, in which we have invested heavily both with the directly managed channel and in collaboration with partners. We expect to make 15 million euros from online sales.
Read also:
