SÃO PAULO, Brazil — Durable, comfortable and often brightly coloured, Havaianas’ rubber flip-flops were born, in 1962, as basic footwear for plantation workers in Brazil, inspired by Japanese zōri, the flat, straw-bottomed sandals traditionally worn by geishas. Priced at a mere $2, the flip-flops became such a staple that they were added to the Brazilian government’s list of basic necessities used to calculate the cost of living, alongside rice and beans. By the late 1980s, parent company Alpargatas, Brazil's largest footwear company, was selling 100 million pairs of Havaianas a year, amounting to a 90-percent share of the domestic market for flip-flops.
But Brazil’s economic upswing in the mid-nineties triggered a downturn in Havaianas’ fortunes. As the population became wealthier, flip-flops were seen as cheap and non-aspirational and, over the decade, sales dropped by 35 percent, from 100 million pairs a year to 65 million pairs.
But by 2000, Havaianas were back, in part thanks to publicity generated by supermodels such as Naomi Campbell, Kate Moss and Brazil’s own Gisele Bündchen, who all wore the brand. “We went knocking on the doors of famous people, whether they were famous football players, actresses or models,” said Merel Werners, Havaianas’ marketing director for Europe, the Middle East and Africa. “This was instrumental back then because we were not getting to the middle classes, which is a massive part of the population. When they saw the upper class wearing it, they wanted it as well. We really created a desire for the product.”
According to Werners, Havaianas’ main asset is its relaxed and free-spirited vibe. “All of a sudden, there is a worldwide interest in Brazilian lifestyle. The Brazilians have the sun, the summer, the Caipirinha. The world is starting to see that there is a massive community of people in Brazil who have relaxed and happy lives. It makes sense to export this Brazilian spirit to the rest of the world,” said Werners. The brand's tagline echoes this: “You can’t buy happiness, but you can buy Havaianas — and that’s kind of the same thing.”
We’re like the ice cream of footwear. The majority of our sales are done in three to four months of the year.
“International recognition is what makes Havaianas successful,” agreed Hector Klein, chief executive of Abicalçados, the Brazilian association of footwear Industries. “Havaianas flip-flops give you the feeling of the Brazilian lifestyle, which is light and cheerful.”
“In NPD’s 2014 Women’s Footwear Brand Focus Study, Havaianas ranked among the top brands thought of as ‘unique,’” added Beth Goldstein, executive director and accessories and footwear analyst at NPD Group. “Consumers respond well to brands and products with distinct heritage and authenticity.”
Today, Havaianas is sold in more than 100 countries in franchise stores, as well as major stockists such as Selfridges and Harrods in the UK, Macy’s and Nordstrom in the US, and Net-a-Porter online. “Our biggest market is Italy, followed by the UK, France, Spain and Portugal,” revealed Werners. “From a brand point of view, though, Portugal is really important because it has a brand awareness of more than 90 percent. In the UK, our brand awareness is 60 percent. This means that four out of ten people do not know what Havaianas is, although this has increased significantly. Five years ago, our brand awareness in the UK was 20 percent,” she added.
Alpargatas reported 2014 revenues of 3.7 billion Brazilian reais (approximately $1.1 billion), an increase of 8.3 percent from 2013, driven mostly by Havaianas. According to Alpargatas, Havaianas recorded a four percent increase in revenue last year, particularly “due to good receptiveness to the new [footwear] collections.”
Indeed, in recent years, Havaianas has gone beyond flip-flops and branched out into new footwear categories, such as espadrilles and sneakers. “We had several requests from friends and customers,” said Werners. “They complained that espadrilles are traditionally made of rope, and when rope gets wet, it either disintegrates or gets very smelly. People started asking us, ‘Why don’t you start making espadrilles?’ So we did.”
According to Werners, the move into new product categories also stemmed from Havaianas’ ongoing battle with seasonality. “We’re like the ice cream of footwear. The majority of our sales are done in three to four months of the year. This is one of our biggest challenges. Our sales are dependent on the weather. The only thing we can do is to create new products that last longer than three to four months, which is the length of the average summer in Europe.”
Last year, Havaianas also added apparel. The beachwear-inspired clothing range, which launched in Brazil, consists of bikinis, board shorts and kaftans. “That’s something we will also bring worldwide in the near future. We plan to launch in Europe, most likely in 2017,” said Werners, who noted that it was important to broaden the appeal of its product offering. “We want to be a democratic brand and it’s important that we have products available for every demographic,” she continued. “I know a lot of people who would never wear flip-flops unless they are on the beach or almost in the pool. Flip-flops are not comfortable for driving in. Children can’t wear them to school. Through product extension, we are increasing the occasion usage of Havaianas.”
But how far can the approach go?
Back in 2011, Havaianas launched rubber rain boots in the UK, catering to the British weather and the popularity of UK music festivals. Yet the move seems a stretch from the brand’s traditional association with warm weather and Brazil.
“You can stretch a brand pretty far with new product assortment, provided that it brings meaningful value to the consumer,” said Dominique Turpin, president of the International Institute for Management Development, a business school in Lausanne, Switzerland. “A lot of fashion companies play this game, but to make it work, it’s absolutely key to innovate and not just copy what the competition is doing.”
“Ugg is a good example of this, [given that] the brand can offer more than just winter footwear,” added NPD Group’s Goldstein. “Last fall and this spring, we have seen strong growth from Ugg’s fashion boots, as well as their sneakers and sandals.”
In addition to recent efforts to extend its product offering, Havaianas has also collaborated with numerous fashion brands, such as Missoni, Matthew Williamson, and most recently, Valentino, on a collection of rubber sandals priced at $295 and sold at Valentino boutiques. “The product was set at a much higher price than our usual flip-flops, although it was comparatively the lowest-priced product in the Valentino store,” said Havaianas’ Werners. “For us, it’s great to connect with the fashion world, but it’s not something that we’re actively pursuing. Of our former collaborations — all those people came to us. Nowadays, we get a lot of requests [for collaborations] and we’re very honoured, but it has to feel right. We need to click.”
According to Werners, Havaianas aims to become a global lifestyle brand, although its new product categories still drive a small percentage of total sales. “95 percent of our total revenue still comes from flip-flops. Five percent comes from espadrilles, sneakers and everything else.”
“It is markets with a warmer climate that permit the everyday use of Havaianas [flip-flops], which will remain the brand’s core source of revenue, as well as countries with a high outbound tourism rate,” said Bernadette Kissane, apparel and footwear analyst at Euromonitor International, who added that she saw potential in Havaianas’ product extensions, thanks to “a rising uptake in sports and consumers’ increasing demand for comfort.”
“The closed footwear market is double the size of the flip-flops market in Europe. We know that there’s a massive market,” said Werners. “Expanding on new products will continue to be a big part of our strategy going forward and we hope it will become a bigger part of our overall business.”