Following are excerpts from a CNBC interview with Mario Moretti Polegato, Founder and Chairman at Geox, from the World Economic Forum 2017 with Steve Sedgwick and Geoff Cutmore.
GC: A management shakeup for Geox, the Italian show brand appointed Gregorio Borgo as its new CEO this month, he joined the firm from the Pirelli Group. Mario Moretti Polegato, founder and Chairman at Geox is with us on set. Good to see you, sir, thanks for coming by.
MP: Good morning, everybody.
GC: Let me ask you just to give us a view on the business outlook from here, because it does feel as though, even in Europe, things are getting a little better.
MP: Regarding my company, or do you want the general situation?
GC: Give us both. Give us both.
MP: Oh. My company, in this situation, because the market is congested still good because grow-, last year grow about 4.7% compared with the year before, and we decided a few days ago to change our CEO, and the new CEO came from Pirelli, he was one of the top managers in Pirelli, because he has a lot of experience in the Far East market. Geox now is a global brand, because we are in more than 100 countries worldwide, but most of the business is concentrated in Europe. Now we want to develop it and to grow our investment in China, for example, in the United States. This is particularly the decision we introduced this man.
SS: So tell me about your price point, because I would put Geox in, and correct me if I'm wrong, as affordable luxury. It's at the top end of a middle bracket, but maybe at the bottom end in pricing of a luxury bracket, as well. Are you happy with your pricing point at the moment? Because other luxury companies have taken their price point higher, which may mean you have less sales, but actually you have higher margins on the sales you get.
MP: In terms of average price, Geox is in the medium height price, Geox is a family brand. Geox is representing a revolution in the shoe business, because 95% of the population, the consumer, use rubber bottom soles. Only 5%, they prefer leather soles. Total-, rubber bottom sole, it is older compared to Geox, because of the hygienic problem. After 18 years, when we start, we are unique in the market that produce the breathable shoes. The possibility-, we represent a revolution, and I believe Geox have a real, a good possibility in the future to develop the business.
GC: So let me ask you about the Italian market, from one, a business perspective, but also from a political perspective, as an Italian businessman.
MP: Everybody knows the situation in terms of the business, the economy, the money, etc. Italy had the politic problem, because Italians start to renovate the Italian politics, because the large problem in Italy is the bureaucracy. Now we have the new Prime Minister, but my brand is just in a transit period. What comment? The Italian entrepreneur is really appreciated in the world, because-, by the fantastic creativity, activities, we hope the politics, they follow the Italian entrepreneur.
SS: Quick last one from me. I've seen many of your stores in the United Kingdom, as well. What does Brexit mean for you, sir?
MP: When we talk the Brexit, my brain thinks about the world situation. Now, particularly in Davos this year, we talk about to divide the economy, but Davos is born to develop the globalization. This is a very, very impressive situation, because in history, in my vision, it is not possible to come back. The new generation needed to travel, to have money, to negotiate your capacity by email. This is the opposite situation. Second, we have the new politic-, American politics, nobody knows about the new President, and other-, on the other side, we have China, people that want to pretend they are the player in the market-,
GC: You say pretend-,
MP: What is the vision? Europe-, we need to reinforce Europe, to balance this power on the right and the left, because in other cases, its' a real problem.
GC: I think there are a lot of people that think Europe's been missing in action for a few years on this story. Mr. Polegato, thank you very much for coming and joining us-,
MP: Thank you.