The history of Melissa, or rather Grendene, is in itself a good example of how to adapt and survive as circumstances change. When Alexandre and Pedro Grendene set up their company in 1971 in Rio Grande do Sul, Brazil’s southern “gaucho” or cowboy state, they started off by making plastic packaging for wine bottles. Southern Brazil has traditionally been the centre of the country’s wine production thanks to its more temperate climate and a large Italian immigrant population.
However, as the shoe industry began to take off in the south, Grendene switched to making footwear parts, such as plastic heels. At the end of the decade, Paulo came up with the idea of making a whole shoe in plastic after he returned from holidays in France, where he saw fishermen using traditional jelly sandals.
For much of the 1990s though, the company had one big problem. When plastic shoes were in fashion Melissa did really well. But when they weren’t, Grendene essentially had to shut down the brand and focus on the development of its other newer footwear lines such as Ipanema.
In 1998 though, the management decided to reposition the brand, taking Melissa shoes out of shoe shops and selling them instead in selected urban fashion stores. The brand has also linked up with famous designers and architects such as Vivienne Westwood and Zaha Hadid to design special edition shoes. In 2004 the strategy had started to pay off and Melissa decided to tackle the international market.
Now Melissa shoes are sold in more than 60 countries around the world, often in department stores such as Selfridges in London.
However, the company has also looked to open its own Melissa stores or “galleries” as they are called in strategic cities throughout the world. São Paulo’s answer to Bond Street, Rua Oscar Freire, and SoHo in New York already have their own galleries and so too will London after the company finds the right location, says Paulo. Next on the list will probably be Paris and Shanghai, which has taken over from Tokyo, as the fashion capital of Asia, he says.
Meanwhile, the company has looked to cut costs by moving production to Brazil’s poorer north-east region, often referred to as the country’s own “mini-China”.
Selling on average for about R$100 in Brazil and $100 abroad, Melissa shoes are also distinguishable by their sweet smell – the result of a secret concoction of fragrances mixed into the plastic during production.
However, while Melissa’s shoes seem to have won over shoppers worldwide, Grendene as a company still evokes mixed feelings among investors.
After the company listed in October 2004, its shares slumped almost 60 per cent in the first seven months. Many of the glowing results promised by the group simply didn’t materialise, causing the market to lose faith somewhat in the management. Only this year, almost 8 years after the company went public, have the shares finally climbed above their original list price.
In April investors went through it all again when Alexandre Grendene listed another of his businesses, the furniture maker Unicasa. After going public the company released weaker than expected results this month, prompting its shares to plunge over 20 per cent in only two days.
While confidence is slowly returning to Grendene at least, it seems many Brazilians would still rather buy the company’s shoes than its shares.