There are three versions of Alexander Café Birman. Internationally, his first and last names call to mind a luxury label of women’s footwear, often in curvy bombshell proportions and crafted from reptilian exotics.
Then there’s his impresario status in his native Brazil, where he is CEO of the publicly traded Arezzo & Co. and oversees one of the country’s largest shoe empires, which includes his namesake label plus Arezzo, Anacapri, Schutz and the latest, Fiever.
But Birman is most fond of a definition his 4-year-old daughter, Olga, recently came up with when asked to describe what her father does. “Meu pai sabe como fazer um sapato,” she said in Portuguese to her private-school classmates, the majority of them the offspring of bankers, lawyers and engineers. Direct translation: “My father knows how to make a shoe.”
The little girl’s classmates laughed — and Olga continued explaining: “Yes, he knows everything about shoes. He is a shoemaker.”
Watch on FN
To prove his eldest daughter right (his second child, Vera, is 2), Birman visited the school a few months ago and explained shoemaking to 50 skeptical kindergartners. “I showed them how the sole, upper, materials and components come together,” he recalled.
He also held a contest enlisting the students to paint their rendition of his signature Clarita sandal. The heeled version accounts for more than half of the Birman brand’s sales, and Gisele wore them, plus a a similar style named in her honor, during Rio’s Opening Ceremony. The winner received a monogrammed pair in their chosen color combo.
This sweet story is emblematic of Birman’s preference for youthful thinkers, which is evident in multiple areas of his life.
“I like to surround myself with young people,” admitted the 40-year-old, whose ambition is insatiable.
While Arezzo & Co. already dominates Brazil’s domestic market — the company sells more than 11 million pairs of shoes annually — Birman has now set his sights on conquering the complicated and challenging global market.
Footwear News traveled to Birman’s home and offices in São Paulo and to the company’s factories in Southern Brazil for an exclusive look inside the Arezzo empire and the entrepreneur’s unwavering passion for footwear.
Family Ties
How did a working-class family from Belo Horizonte in Brazil’s interior become fashion footwear players of such scale?
A quick history: In 1972, brothers Anderson and Jefferson Birman closed their eyes and randomly selected a spot on a map of Italy. They stopped on Arezzo, a small Tuscan city, and a shoe brand was born. (Four years later, Anderson’s son, Alexandre, was born.) By the end of the decade, Anderson and Jefferson’s affordable jute-covered wedge was a national hit.
During the 1990s, Brazil’s middle-class boom and the country’s restrictions on foreign imports allowed Arezzo to rapidly expand its wholesale and retail footprint. Hundreds of stores were opened, and young Alexandre Birman had a front-row view of all the action.
“He was born in a shoebox,” said Anderson Birman, chairman of Arezzo & Co. “He was around 6 years old when he started getting interested and would follow me [during] my daily routine at the factory. I noticed he was talented.”
By age 12, Alexandre had created his first style and was hooked on the shoe business. But in 1995, at age 19, instead of joining the family venture, Birman started his own brand, Schutz. In contrast with Arezzo’s classic heels, Alexandre’s new label was influenced by the grunge scene of the times, launching with a chunky lug-soled hiker.
“I started with a $3 million investment from my father,” he recalled, over traditional Brazilian pao de queijo bread and espresso.
“The first year, I made $1 million, the second year, a couple million, and so on. It was all the capital I needed to create the brand and become self-sufficient.”
The designer reflected on his unique journey after an FN shoot featuring Birman and his wife — and constant source of inspiration — Johanna Stein Birman in their plush, open-concept home, featuring high-end art; smartphone-controlled, movable walls; and views of São Paulo’s tony Jardim neighborhood.
Birman spent the first decade of his career building Schutz into a footwear force. By 2007, when the brand was raking in annual revenues of more than 120 million reals ($64 million), Anderson invited his son to merge the company with Arezzo. (The elder Birman’s brother, Jefferson, left the company in 2005.)
Alexandre Birman rattles off facts and figures about the father and son’s share swap and valuation of the new company with an uncanny matter-of-factness.
In 2011, after his father had turned 60 and the company was preparing for an IPO, the senior Birman handed over the leadership reins.
“We don’t believe that CEOs over 60 are a good idea,” Alexandre said, adding that even though he may have fully embraced the role, he loathes the stuffy title. “Olga was right. Just call me a shoemaker.”
His modesty is not very convincing. A study of the company’s financials confirms that its total store count is 537 (489 are franchises). The family still owns 52 percent of the company.
One of Birman’s strengths is his ability to attract savvy team members and investors. He also has a knack for understanding what sells. When he wears his creative hat, Birman turns to an extensive team to help him execute his vision.
“He is for sure very determined — it’s one of his talents,” said Anderson. “But when it comes to human relations, he’s always improving.”
He’s a better talker (as anyone who saw him speak at the 2011 Footwear News Summit can attest) than an attentive listener, according to several sources who noted his impatient leadership style, but then again, he has a need for speed. In addition to achieving 6.4 percent year-over-year net revenue growth since the IPO, Birman’s also a medaled Ironman. He’s data-obsessed, works hard to beat records and likes to win, in all areas.
Brand Brazil
Birman may be on a roll, but there are still plenty of obstacles in his native land. To the foreign press, the news out of Brazil is alarmingly negative: Zika Strikes Again! Petrobas Scandal! The Economy’s Tanking! Disaster Olympics!
It might not be the country’s brightest moment, but Birman, a measured patriot who participated in protests calling for the former President Dilma Rousseff’s impeachment, has his own take on the state of the union.
“Every country has its issues,” he said. “We practice democracy and are a peaceful place without some of these terrible problems of terrorism in Europe or the racial [tensions] that are affecting the U.S.”
For him, the biggest hurdle facing Brazil is more fundamental: A number of people still live in extreme poverty. But he thinks the media has it all wrong about Zika.
“We are in a situation where the news abroad is making more noise than here,” said Birman. “[The virus] was small, and people took control of it. It’s part of what happens when you live in a country with over 200 million citizens.”
Roberta Ramos, a project manager for Abicalcados, the Brazilian footwear association, agrees that Zika has had little impact on the shoe industry, the third-largest in the world, after China and India. In 2015, Brazil exported 124 million pairs of shoes, to the tune of $960.4 million.
“Zika is only affecting us in terms of some people not wanting to travel to Brazil. [It’s not impacting] Brazilian trade,” she said.
She’s hopeful that buzz from the Rio Games might ultimately spread goodwill about Brand Brazil and attract more people to the country, including skilled shoemakers.
While technical programs for footwear in Brazil are strong, Birman doesn’t think there’s a shoe school that comes close to Cordwainers in the U.K., from which some of the best designers hail.
“I’m trying to invest in [education] in the south to open up our doors to young people,” he said. “I think now is a time to regain our confidence. Brazilians are by nature very creative.”
While Brazil is grappling with its own challenges, the country is also feeling the impact of an unsettled global economy.
“It’s not a bed of roses,” Birman acknowledged.
“We had a great 10 years between 2002 to 2012, where a lot of people who were in true poverty had [improved their] condition. It was a tailwind. Competition got bigger at that time.”
In the current climate, Birman has been careful to plan for currency fluctuations. Other manufacturers, he said, overly devalued the reals, to the detriment of their margins.
“We’re having a great year so far. My company philosophy is to never look to the outside for guidance,” he said. “We don’t make our decisions based on a soft economy. We decide from our own opportunities and instincts. Every year we improve and maintain a constant growth.”
Though Birman recognizes that the Arezzo brand is the company’s “cash cow,” as he calls it, Schutz is where he sees the most growth potential — both internationally and as a multicategory lifestyle brand. His vision is for it to become the equivalent of the “Zara of shoes.”
Birman is focused heavily on the U.S. market, an opportunity he uncovered during his summer pro- gram at Harvard in 2010. Using a hypothetical Schutz expansion as a group case study, he realized there was a white space for high-quality, fast-fashion shoes.
In Brazil, the majority of Schutz styles retail for less than $100, which still makes them expensive for the local consumer. In the U.S., the brand is priced nearly a quarter higher to reflect export duties and a higher cost of living.
By placing Schutz higher than more mainstream competitors, such as Aldo and Steve Madden — whom Birman said he admires — Schutz targets what Birman calls a “trading down” customer who would traditionally shop for designer brands. With that strategy in mind, Birman opened a New York location on Madison Avenue, across from Barneys, in 2012.
After a research firm the executive hired produced data suggesting that California is the country’s most important market for sexy heels and boots, Schutz tested and then opened a permanent Beverly Hills location this year.
Together, the stores racked up more than $3.5 million in sales for 2015 and attracted attention from all the right players. The retail expansion also helped the brand gain traction on the wholesale front. Saks Fifth Avenue and Nordstrom picked up the line, which has also generated buzz from celebrity support. Britney Spears and Duchess of Cambridge Kate Middleton have both donned the brand’s stilettos recently. “You can’t buy that kind of press,” Birman said with pride.
Southern Sole
As he continues to build Schutz into a bigger force, Birman has the advantage of owning his own factories. When FN visited the production headquarters, outside the southern capital of Porto Alegre, workers were churning out a new batch of Middleton’s preferred peach Dollie style.
Both the quaint town of Campo Bom (population 62,000) and the gleaming Arezzo & Co. are immaculately neat and tidy, with refuse-free streets, spotless factory halls and perfectly cataloged internal archives, calling to mind the region’s Germanic immigrants.
Birman spends at least two days a week at the factory.
“Product is my passion,” he said. To minimize travel time, he has his own plane for the hour-and-45-minute journey from São Paulo. Footwear veteran Cisso Klaus oversees operations as the group industrial director. Klaus previously spent decades working with Vince Camuto and sees a similar sparkle in Birman’s eyes.
“I introduced them once, years ago, and told Vince that Alex was the next big thing,” Klaus recalled. After chatting with Birman, Camuto concurred, “I believe you — he has it.”
Today, the Alexandre Birman facility is housed in a Bauhaus building that once belonged to Camuto, where white-coated workers painstakingly handcraft the company (and country’s) most expensive shoes. After experimenting with Italian factories, Birman and Klaus worked hard to bring as close to that level of quality and technique as possible to all things AB.
“I’m never quite satisfied, but we’ve improved tremendously in the past couple years, since we got our own space,” said the discerning Klaus, who, in another passing of the torch, is grooming his son Tiago, 24, to one day handle his current role.
Much of the production team’s focus is on the Alexandre Birman line’s star shoe, the flattering Clarita. Birman attributed the style’s popularity to its simplicity and versatility.
“It’s a matter of testing, correcting and pushing that style,” he said.
Bergdorf Goodman’s VP and DMM of footwear, Nayla Touma, witnessed the Clarita’s incredible appeal at an event the department store held for Birman in the spring.
“We were thrilled with the results,” she said. “The event was extremely well-attended by our VIP clients, and they loved the option of customizing their Claritas or buying stock.”
Fifty pairs of the shoes, which start at $595, were sold in a few hours.
“Alex is very creative and open to new ideas,” Touma said. “It’s becoming increasingly important that labels run a flexible business and react quickly to an ever-changing retail environment, and the Birman team is very well-positioned to succeed with this mentality.”
The collection was also recently picked up by Net-a- Porter and Matches Fashion.
Though still relatively tiny compared with the rest of the company — sales were $9.1 million in 2015 — Birman’s namesake label has raised his profile exponentially, both at home and internationally. (His glossy parties at Paris Fashion Week have become must-attend events for the fashion crowd.)
It doesn’t hurt that Birman’s spouse is equally interesting. A fine-art student, voracious reader and front-row regular at Chanel, Johanna is that rare mix of muse and modern eye, constantly pulling references for her husband and advising him on the look of Birman brand stores and boxes.
“I was there when they came up with the Clarita,” she said. “The knot, feminine shape, the curves — it’s the DNA of the brand.”
While it’s clear that Birman’s highly sophisticated strategy is crucial, he attributes his winning streak to his wife.
“She is my pillar,” he said, citing her dedication as a mother and positive energy as key attributes. “The day I found her, my life completely changed, and I started to be successful. I call her my secret weapon.”
