In a recent discussion, Spartoo CEO Boris Saragaglia addressed the various challenges the company faced in 2022 and shared his ambitious plans for the future. Despite the turbulent conditions marked by war and inflation, Spartoo managed to maintain stable revenue throughout the year. Saragaglia highlighted that the first half of the year was particularly arduous due to the impact of the Covid-19 pandemic and the ongoing war in Ukraine. However, there was a noticeable improvement in July and August as consumers took advantage of sales amid rising inflation. Although November presented difficulties, a change in pricing strategy and an in-depth market analysis resulted in a positive end to December, allowing Spartoo to generate profit in the latter half of the year.

Saragaglia compared Spartoo’s performance with that of its competitors, specifically pointing out that while other players, such as Zalando, focused on promotions and inventory clearance in the fourth quarter, Spartoo prioritized maintaining stable prices and real-time adaptability. This hands-on approach played a pivotal role in enabling Spartoo to achieve growth even in challenging circumstances.

Looking ahead to the current year, Saragaglia acknowledged a decline in demand of approximately 25% to 30% since the beginning of 2023. However, he noted that this situation is not unique to Spartoo, as competitors, especially German ones, are also experiencing a similar impact. The CEO believes that purchasing frequency will decrease across the board, and when consumers are ready to spend on apparel and footwear again, they will likely gravitate towards entry-level brands. Saragaglia anticipates that less affluent consumers will buy fewer products and wait longer before making purchases. On the other hand, he expects minimal changes for more affluent consumers, as Spartoo’s made-in-France footwear brand has performed well with products priced between €120-€150.

In terms of expansion plans, Spartoo currently operates 35 physical stores and intends to open approximately 10 franchised stores in 2023. The company will also evaluate the results of its strategy as the exclusive distributor for Aldo, with the aim of enhancing online sales for the brand. Saragaglia underscored that physical stores remain a crucial component of Spartoo’s long-term strategy, as they contribute to improving customer confidence and repeat purchases.

Apart from its core business, Spartoo has ventured into the pre-owned product market. While Saragaglia acknowledged that Spartoo is far from reaching the volumes of platforms like Vinted, the company aims to capitalize on the opportunity for recycling. By providing a platform for selling second-hand products, Spartoo can expand its range to include brands it typically doesn’t stock, ranging from major retailers like Zara to luxury labels. This move not only strengthens Spartoo’s organic indexing position but also attracts new customers. Saragaglia believes that relying solely on a 100% marketplace model, like Vinted or LeBonCoin, is not sustainable for long-term profitability, making the resale business an additional model for Spartoo.

When questioned about entering the home decoration segment, Saragaglia explained that while the company sees potential in that area, the current focus remains on footwear, especially during a period of weak consumption. Spartoo’s priority is to offer attractive prices without spreading itself too thin across various product categories.

Saragaglia provided insights into Spartoo’s sales split, revealing that children’s footwear contributes to 10-15% of revenue, men’s footwear 15%, and women’s footwear approximately 75%. The company aims to increase the share of children’s footwear in its business and seeks to attract a younger clientele with an average age closer to 30. Unlike competitors that target teenagers, Spartoo prefers to cater to individuals in their thirties or forties who have the means to spend and prefer online shopping for practical purposes.

Looking ahead, Saragaglia mentioned Spartoo’s ongoing endeavors to expand in the luxury segment and further develop its sports segment. As for acquisitions, the company remains open to opportunities, closely monitoring consumption trends and staying vigilant. Regardless of the challenges that may arise, Saragaglia emphasized the importance of caution and preparedness during uncertain times.

Useful links:
1. Spartoo
2. Aldo