Luis González Herrero (Merkal): "we are not going to maintain stores that lose money"

The CEO of this shoe company accepted the challenge of repositioning the company, now in the hands of a fund, in full confinement by 2020.

We all changed our lives in the spring of 2020, but Luis González Herrero (Madrid, 1965), the pandemic also brought him a new job. The CEO of the textile firm Springfield took on the challenge of repositioning Merkal, a brand of footwear born in Barcelona in 1981 that has been part of the OpCapita Consumer Opportunities Fund II LP since 2017. "when the company was created, that self-service warehouse model with a lot of variety at a good price was a very innovative thing, but it had diluted in the property changes. It was a good story depositioned," says the executive, who wore the leader's boots despite the confinement. "the fund told me that the change was going to continue and that with the pandemic, all the more reason."

His strategic plan is based on three pillars: "we want to be a shoe specialist for the whole family at an unbeatable price; to bet on ommicality and digitization so that the experience is the same to buy where you buy; and, thirdly, to improve the customer experience. How? recovering windows, which we didn't have before, and getting store staff from being a reponer to a vendor who advises. We're not looking for a revolution, but an evolution," he says.

The strategy involves opening about five stores a year (currently having 200 outlets) and renovating between four and five premises annually. With regard to store closures, four were produced last year: "we are negotiating with the owners so we Don't have to close any, but we're not going to keep stores that lose money," he says. A profitable point of sale for González Herrero has an area of approximately 550 square meters and a defined area for each section: man, woman, children, accessories... "what we're accelerating is business opportunities; we have growth capacity."

The conversion has also reached the marks of Merkal, as is the case with Fosco: "it is a teaching that had lost content and had to be repositioned. We have focused it on the 'art of the skin', but we are not going to take it out of Merkal for now." What is not expected to go outside is the company itself: "we need to be profitable in the next three years and until then we will not consider the international leap."

On the equator of the rebates, the manager is satisfied with this campaign: "we hoped to increase sales during the sales period compared to the previous year, and this has been the case, as we have reached pre-Covid figures. During the first rebates we offered our customers up to 50% discount and there was a lot of concentration on the lowest prices."

Prices that the global context requires to rise, as the Madrileño predicts. "this year there will be a tremendous increase in logistical costs and the sales price has to bear a part." The manager is not clear how the end of the pandemic-wherever it is-will affect consumption, although for now they have "gained market share as many of the competitors disappear." He does visualize the changes in consumer habits: "buy online daily-that's why we strengthen the omnicanal processes-and wear more comfortable and casual shoes."

González Herrero has found in the retail sector the shape of his shoe: "you can work both the financial and the creative part. In addition, each action involves a reaction in the short term that you can evaluate."

The fact that you are part of a company led by a fund makes a good note: "normally, when there is a fund behind, if you give results, you have almost infinite money, in quotation marks, to invest. Many family companies have fallen with the pandemic …".

A pandemic that for him has been a real master's degree in management. "as a professional experience it is brutal. You see that challenges planned for several years can be carried out in months. In fact, I want to earn a year from the strategic plan, which was defined for three exercises, and do it in two. In any case, my future will remain in this sector because I like it and because it is where I have the experience."

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