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GLOBAL AMBITIONS

PORTUGAL’S UPSCALE SACOOR IS SHARING ITS SUCCESS WITH THE WORLD

By Nicky Godding

Portuguese family’s retail dream has been so successful that its brand is set to spread across the world within the next 10 years.

Sacoor, an upmarket Portuguese clothing brand that four brothers launched in 1989 in downtown Lisbon, initially sold just men’s apparel. The business prospered and soon branched out to include women’s and children’s wear, accessories and shoes. Now Sacoor operates 30 shops in Portugal, and gal, and earlier this year the company opened one in the Middle East, at Festival City Mall, in Dubai, United Arab Emirates.

From the beginning, the brothers recognized the importance of a strong marketing strategy. They began dressing Portuguese and Brazilian soccer stars and other celebrities, banking on the immediate visibility and high brand awareness such associations would yield.

Recently Sacoor has moved into high-profile sponsorships, securing deals with such European sports powerhouses as FC Barcelona (Futbol Club Barcelona), FC Benfica and FC Porto. The retailer also agreed to dress actors from the television series Miami, which is broadcast in 98 countries. Such moves have given the Sacoor brand an international presence that is fueling a new stage of expansion, says Moez Sacoor, the company’s marketing director.

Sacoor plans to open two stores in Spain in October — Madrid and Bilbao — with 10 more in the pipeline for that country over the next three years. The company also wants to open a store in March in Brussels, followed by about five more there. In Turkey and the Middle East Sacoor will roll out about a half dozen, in Venezuela about as many again, and it also has designs on Mexico and Russia.

A sales slowdown at home is one of the factors driving Sacoor to broaden its boundaries. “Expanding internationally is the best strategy to secure our company’s growth,” said Moez Sacoor. “The Portuguese market has seen a substantial decrease in its buying power and retail sales since the economic crisis in the country which started in 2000, 2001. Although Portugal reported a small growth during 2006, all economic studies say that growth will remain slow, although above the European average.”

The company says most of its sales growth over the next five years will come from outside Portugal. Following careful research, Sacoor has pegged some locations in malls and on High Streets. In Istanbul, Turkey, for instance, the chain is focused on what it considers to be the three most important malls: Akmerkez, Metrocity and the recently opened Cevahir. In Spain the company wants to open in La Vaguada, Madrid; and in L’Illa, Barcelona.

The company has tracked fashion trends, consumer tastes, clothing sizes and the like in each country. It studies competitors too, looking over their shops, product mix and merchandising. “We think globally, but act locally,” Moez Sacoor said.

Malik and Salim Sacoor launched the business in 1989, while they were still university students, and ran the company as they finished their studies. Their brothers Rahimo and Moez followed suit, each of them joining at 18. Today Malik is chairman and his brothers are board managers, Rahimo being responsible for sales and finance, Salim for production and international expansion, and Moez for marketing and communications.

In 1996 Sacoor opened its first unit in a shopping center, at Centro Colombo, in Lisbon. “We were warned not to go to shopping centers, because we would lose our identity and our clients,” said Malik Sacoor. “But instead the demand was huge. Six months worth of stock sold in two weeks, and the national awareness of our brand jumped.”

A customer who enters a Sacoor shop steps into a world of luxury, replete with opulent finishes and furnishings, a café and live piano music. The shops have a tailoring room for alterations, which are often made in full view of the patrons. Customer service is the top priority; regular focus groups keep management apprised of how the shops are performing. “Sacoor’s client is a very demanding one who looks for quality in the products and services offered,” Moez Sacoor said. “We continually look for ways to surprise them and offer them unique free services.”

The typical Sacoor shopper is a trendy and sophisticated urban professional between 20 and 45 years of age, Moez Sacoor says. Men are generally more loyal to the brand than women, he says.

Sacoor seeks spaces measuring 250 square meters (about 2,700 square feet) for its unisex stores. For a flagship store, the company needs about 350 square meters. In a shopping center, Sacoor prefers a midlevel or upper-level spot with good visibility and high traffic, near such competitors as Gant, Ralph Lauren or Tommy Hilfiger.

“In the Middle East, where we have started our international expansion this year, the best fashion stores are located in the mid and upper levels in the shopping centers,” said Moez Sacoor. “Being close to companies such as these keeps our business sharp and competitive. This is the best way, in our view, to continue to learn and grow our business.”

But the company’s shopping center experience has not always been positive. “Whilst we do very well in Portuguese shopping centers such as Colombo, Vasco da Gama, CascaiShopping and Almada Shopping, in Lisbon; and Norteshopping in Oporto, we did less well in Parque Nascente, Oporto, mainly because our store area was inadequate for shopping-mall visibility,” Moez Sacoor said.

The brothers get along famously with landlords, it seems. “I can say that through my professional contacts with the four brothers, we became friends — the best compliment I can pay them,” said Luís Vilhena de Mendonça, who manages the Sonae Sierra-owned Centro Vasco da Gama, in Portugal. Sacoor opened there along with the center itself in 1999 and in 2004 doubled its square footage at the center. “They add value to our shopping in terms of mix, and they have good sales performance,” he said. “They are very innovative in their business, with fantastic ideas in terms of company organization.”

The company has begun to earn national awards. In 2004 it received an Entrepreneurship Award from one of the world’s largest graduate business schools, Insead University, in Paris. Last year the company received the Decoration of Merit and Excellency from the president of Portugal.

Sacoor says it seeks to employ strong, committed professionals. The company set up its Sacoor Business School to provide training to new and veteran staff members alike. The school offers intensive instruction in selling, customer service and personal motivation. “As we are focused on international growth, we also run daily English lessons for our middle and senior management,” Moez Sacoor said.

The company’s only potential clouds would be those affecting any other retailer: dependence on economic trends and consumer activity; trade barriers to textile products; and fluctuations in the real estate business, which could limit the number of shopping centers built.

To maximize its competitiveness, Sacoor uses its most expensive asset: staff. “We work under the kaizen philosophy of continuous improvement,” said Moez Sacoor, referring to the Japanese word for “improvement,” closely associated with Toyota’s workplace ethic. Apparently, it works. Today the company boasts 320 employees and in 2005 posted €46 million (about $60 million) in sales.

“We try to improve every day, every moment — from the design of our clothing, our merchandising and windows, to our staff recruitment and training,” he said. “We care for them through constant training and motivation, so that they in turn care for our clients. Our people are the key to our continued growth and our differentiation from the competition.”