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Charles & Keith International:
Full control ensures shoemaker never misses a step

Full control ensures shoemaker never misses a step

THE success of shoe label and fashion retailer Charles & Keith International on the global front can be attributed to its ability to have a firm grip of its operations across its vast network of stores and factories.

This unwavering commitment has put the company in good stead to weather the major crises it had faced, dating back to the days when the retailer was operating out of a small store in Ang Mo Kio in 1990.

Back then, co-founder and chief executive Charles Wong, 39, and his younger brother, Keith, 37, were just teenagers helping out at their mother's shop.

She wanted the older Mr Wong to close the unprofitable shoe section, but the future shoe maven was determined to turn it around.

He mapped out a plan to take control of the entire shoe business operations - from stocks to design and even shoe sizing.

As a result, the shoes sold well and Mr Wong managed to stave off the store's closure.

This experience honed his business acumen, which would serve him well when he decided to set up his own shoe company with his younger brother, who is the firm's chief operating officer.

From the outset, the siblings were determined to make a name for themselves by starting their own brand.

In 1996, they set up shop in Amara Shopping Centre to market and sell Charles & Keith shoes at a time when it was unheard of for local shoe retailers to brand themselves.

The move was prompted by their determination to cut out the middlemen, who forced up prices.

With their firm grip on operations, the two founders were able to steer the fledgling company on a steady growth path even when facing their first major test: the 1997-1998 Asian financial crisis.

In 1998, the firm began distributing its line of shoes to Taiwan, and in a bold gamble that same year, Charles & Keith opened its first international store in Indonesia, one of the countries worst hit by the crisis.

As it turned out, many ailing factories in the region that were partnering Charles & Keith were thrown a lifeline.

"A lot of factories were not doing well, and that was when the brothers entered and worked directly with the factories," said Mr Fong, 39.

"Charles never liked consignments as the fees are very high. He prefers to work in his own store, where he can have full control," - Charles & Keith International executive director Fong Shee Beng

Even as the Wong brothers were forging ahead overseas, they were also expanding on the home front by setting up their second local store in Causeway Point in 1997.

It was seen as a milestone as they were setting foot in a sizeable local mall for the first time despite having to pay double the rent they forked out for the Amara store.

As Charles & Keith's international journey was just beginning, it faced a brick wall from mall owners here when it wanted to expand its domestic footprint.

Mr Fong recounted that mall owners told the company it had big shoes to fill - they would accept only international brands to be showcased on retail shelves.

Shrugging his shoulders, Mr Fong said: "So we said okay, we'll make ourselves international and we'll come back and look for you."

As it turned out, when Charles & Keith made a name for itself on the global stage, landlords here came knocking on the Wong brothers' doors to ask the retailer to grace their malls.

Today, Charles & Keith shoes are displayed in all corners of Singapore, from the big malls in Orchard Road like Ion Orchard and 313@Somerset to surburban malls like Jem and nex.

To ensure that the burgeoning business is run smoothly, Charles & Keith made sure that it had control over the entire chain of operations.

In the area of manufacturing, more than 30 factories in Malaysia and China make shoes exclusively for the company.

"We didn't want the factories to produce for other people, so we needed to 'take over' and give them orders," explained Mr Fong, who joined the company in 2000.

Similarly, Charles & Keith ran a tight ship in areas ranging from branding, retail and supply chain to design.

Mr Fong stressed: "In internationalisation, if you don't have control, things will go haywire.

"If you want to franchise but can't control your partner, what's going to happen? Branding has to be consistent and if you want to be consistent, you need to be in control."

After expanding into the Philippines in 2001, Charles & Keith ventured beyond the South-east Asian region and set foot in Dubai in 2004.

"Dubai played a very important role. It was the place to go, and we were competing with the world in Dubai," Mr Fong said.

Having the foresight to go international early has benefited the company. Mr Fong said Charles & Keith was able to expand rapidly in markets such as Indonesia as it had already built a good track record.

With its growing reputation for producing top-quality women's shoes - and later men's shoes under the Pedro line - overseas businesses were eager to partner Charles & Keith in their respective markets.

With its growing reputation for producing top-quality women's shoes - and later men's shoes under the Pedro line - overseas businesses were eager to partner Charles & Keith in their respective markets.

In Saudi Arabia and Jordan, Charles & Keith teamed up with Alhokair Fashion Retail, which brings in international brands such as Zara and Massimo Dutti to those markets.

The shoe company recently signed a deal with leading Japanese fashion firm Onward Holdings to set up a joint venture which aims to open up to 35 stores in Japan over the next three to four years.

Perhaps its most high-profile partnership so far is with L Capital Asia. The private equity arm of luxury goods group Louis Vuitton Moet Hennessy acquired a 20 per cent stake in Charles & Keith for more than $30 million in 2010.

Despite its seemingly unstoppable overseas expansion, the company has never lost sight of the need to learn from the setbacks it had encountered over the years, particularly in a major crisis.

Referring to the 2008-2009 global financial crisis, Mr Fong said: "We couldn't recruit as fast as we grew, factories couldn't keep up, there were some delays. Every year since then, we worked on being more precise with production forecasting."

Today, Charles & Keith has 390 stores in Asia, the Middle East, Europe and Africa.

Next year, the company is planning to expand its global footprint in Latin America, possibly Mexico or Panama.

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