Peter Romanelli, CEO of Italian Shoemakers, on how the 36-year-old women’s lifestyle brand continues to grow by sticking with what it does best.
Peter Romanelli doesn’t consider himself a shoe designer, or even a line builder. But how do you define a man who has, for the past 36 years, served as the company’s point man with its factory partners, building Italian Shoemakers from scratch into a solid women’s lifestyle brand known for simplicity and timeless style at affordable price points? If you ask Romanelli, the answer is: “I define myself as a romantic, passionate shoe engineer.”
Romanelli says a shoe engineer is someone who makes product that has good structure and longevity. Perhaps it’s not surprising then that some of his earliest engineered styles remain popular sellers to this day. One in particular is style No. 168, a crisscross wedge sandal first introduced in 1984. “It’s probably one of our most successful styles overall,” he says. “It’s a simple, elegant construction and is still selling extremely well.”
But Romanelli will be the first one to admit he’s no shoe savant. Not all of his styles have been home runs. Nor does he hail from a shoemaking family. (His father and two brothers are doctors, and his mother is a pharmacist.) Rather, it’s been a trial-and-error process that started back in 1982 when he took sole possession of Italian Shoemakers—a two-person startup that, after the first eight months, was saddled with a bunch of shoes no one wanted to buy. Romanelli says his partner at the time thought he knew what the U.S. market desired and assumed American retailers would adapt to an Italian business schedule. He was wrong on both counts and soon left to give the pizzeria business a whirl. Romanelli found himself alone. He needed to pay back the investment his father had made in the company’s launch, so he was forced to figure out a way to survive.
Back then, Romanelli was taking college business courses in the mornings and evenings—and working on Italian Shoemakers in between. It gave him an ideal opportunity to apply some business 101 concepts to his fledgling company. For example, Romanelli knew he needed to sell shoes that would deliver a profit—and he quickly realized that keeping costs under control was key. “I learned early on how to be very careful with costs,” he says. “A product can sell very well, but if your costs are high, then your product will be expensive to produce and you may have difficulties growing your company.” Keeping costs in check helped Italian Shoemakers be competitive, and it taught Romanelli another valuable lesson: Your retail partners need to make a profit, too. “Once they make money, you become a good supplier and they want to do more business with you,” he says.
Romanelli built Italian Shoemakers one style at a time. In the early days, he sold shoes to Miami-area retailers out of the back of a van that he and his wife took turns driving. Nowadays, he sells millions of pairs annually in countries around the world. It’s the quintessential entrepreneurial success story, albeit the long version. Italian Shoemakers wasn’t, by any means, an overnight sensation. It’s been a shoe-by-shoe, season-by-season, year-by-year process. Romanelli says the growth has come in stages punctuated by a series of plateaus. “We show an increase about every four to five years,” he says. “It’s basically the time frame required for us to absorb the knowledge—and fix any mistakes—in order to make the next jump.”
Right now Romanelli believes Italian Shoemakers is poised for another jump in sales volume. He predicts it will happen either this year or in 2020. “We’re close,” he says. “I’m confident we’ll break the 4 million pairs mark soon, and our goal is to achieve 5 million pairs sold annually by 2021.” He cites the addition of the company’s first boots collection this fall as one factor, though he predicts the bulk of the gains will come from expansion into everyday casual shoes beginning this spring. “They aren’t sneakers or moccasins, but they’re flexible and comfortable (closed-toe) styles suitable for work and casual occasions,” he says, noting that the expansion has been nearly three years in the making.
Romanelli says the brand will also continue to deliver fresh and enticing sandal collections with a variety of materials, colors and embellishments. “Our latest collection features more embellishment on the soles,” he says. “We’ve added some woven details, bands, ornamentation, multi-colors and metallics that add interest, yet the sandals overall are clean and understandable.” Comfort features, too, have been upgraded. “A lot of attention has been put on the edges to makes sure they are smooth and rounded, and the linings are also smoother and softer,” he says.
It’s a labor of love for Romanelli, made even more so since his sons, Arthur and Oliver, became partners in the business a few years ago—against the advice of outside experts. “My lawyer said it wasn’t a wise move because I could lose control over my company,” Romanelli says. “But I’d rather have my family help me control the company than eventually be by myself with my family having interests in something else.” Romanelli believes the move is good for his sons. “They aren’t just ‘working for their dad.’ They’re working for themselves and their families,” he says. “They have a vested interest in wanting the company to continue to do well.”
But Romanelli is giving no free passes. He wants to ensure that his sons learn the business from the ground up. “They’re going through same process I went through,” he says. “They’ve worked in our warehouse, unloading containers and shipping shoes, and they’re learning all facets of the business. I’m very pleased with them and so happy that we have this relationship.”
What’s more, having his sons join the business has given Romanelli added incentive to stay healthy. “I need to keep myself available to them and make sure they learn the whole process,” he says with a laugh. Fortunately, the job itself keeps him young. “I love what I do. It keeps me active and happy,” he says. “Even though there can be lots of pressure in this business, that doesn’t really bother me because I enjoy overcoming challenges and fixing mistakes.” Ever the engineer, Romanelli’s approach is simple but undeniably effective.
Looking back to when you started Italian Shoemakers at age 19, did you ever envision you’d be running the same (much bigger) company 36 years later?
No. I think I’ve been lucky. It’s probably in my DNA. But at the very beginning it was more seen as a problem I had to fix than a career. I had to repay my father. That was my first goal.
When did you repay your dad?
Within 24 months. My fiancée (now wife) and I invited my parents to dinner, and we presented them three envelopes each containing a check covering the three loans he gave us. He was very impressed to be paid back so soon. Of course, I was lucky to be living at home at the time, so I had no living expenses. I was going to college and working at the same time. It was challenge with the schedule, but my college was close to the office.
What exactly did you do that your original partner failed to do?
Very simple, I found a way to survive. We had shoes that didn’t sell, so I quickly learned that certain shoes have value and others have none. Once you learn that, you look for shoes that have value and stay away from ones that don’t. The first thing I did was try and understand the needs of the U.S. market, particularly the retailers in southern Florida. It’s warm, so I said let’s make open footwear. We started out with a simple slide. The style number was 0405. Then we added a slingback, which was style 04S05S. I just built the business up from there. Along the way, I learned about unique sole constructions, cushioned insoles, upper materials, etc. It wasn’t that difficult, really. Many of the first products we introduced could still sell well today.
You’re being a bit modest. It’s not easy to do successfully for three decades.
There are always good seasons and bad seasons. Actually, I’m always more scared by the good seasons, because the bad ones tell me what I did wrong and the next season I won’t repeat those mistakes. In contrast, the good seasons can sometimes be misleading. Likely, it was a number of things that made the collection successful, but you never really know which ones will repeat the following season. So if you guess wrong then you might not have as good a season. It’s always been a challenge to keep the company going. Fortunately, my wife was always there helping me manage the business. She was the best partner I could ever had, especially at the start, doing everything from unloading containers in the warehouse and driving our van to deliver shoes around south Florida. She’s always been with me. We’ve had a fantastic time.
When did the company start to expand beyond Florida?
In the mid to late ’80s. We started to exhibit at the New York show and picked up some retailers and then exhibited at WSA when it was in California. That‘s when a buyer from Bakers stopped by and said he’d never seen Italian-made sandals done this way and gave us a test. That was the first step to becoming a bigger business. Soon after, we landed Edison Brothers and learned how to fulfill 10,000-pair orders. It just grew from there.
When did you feel like Italian Shoemakers was really on its way?
It took 10 years for me to develop the product knowledge that could sustain steady sales. In 1991, we moved from our first warehouse, which was not even 100 square feet, to a nice building occupied by a friend who rented us an office and about 5,000 square feet of a 50,000-square-foot warehouse. That gave us nice flexibility. We could get more room if we sold more shoes. Then, in 1992, we made our first major investment, buying the two-acre lot next to that building that is our offices and warehouse today. That marked the beginning of being a company with a good opportunity in front of us.
What do you think is one of Italian Shoemakers’ most defining traits?
We build new products 24/7 because we’re constantly looking at the market to understand the shifts in trends. We don’t try to be the fastest company, but we aim to be an understandable company that produces product that is understood by our customers. So I would say it’s simplicity.
Who is Italian Shoemakers’ target customer?
She’s a busy Middle America working mom spanning from age 30 to 60s. Her family comes first followed by career and then personal needs. She doesn’t have a big budget for shoes (Italian Shoemakers prices range from $39 to $49 and $69 to $79) yet she wants to buy comfortable styles that she feels proud to wear and won’t last just three months, rather several years. She prefers wedges and flats with a little bling that she can wear at a variety of occasions. Overall, our goal is to offer quality product with a fresh and elegant look at a competitive price yet made in Italy.
“Made in Italy” still holds strong cache?
It makes a big difference. There’s an added level of interest. When customers see that a product is made in Italy, they expect to see a higher level of quality, finesse and elegance. For our customers in particular, it also means good value. It’s something that they can be proud to wear. I should add that some of our top factory subcontractors work on leading designer names. We share the same people who make many of those shoes.
So no plans to shift production overseas to possibly lower costs?
An advantage might be lower production costs, but the biggest disadvantage is having little to no control over the product. Also, it’s not faster and there are added costs for transportation. But most of all, it’s the lack of quality control. You’re never confidant that the product shipped will be right. Whereas, we really don’t even have to check products when our containers arrive because we’ve been in full control through every step of the process with our own factory and subcontractors. We don’t have that fear of the unknown of what’s inside the box. One of the best compliments I’ve ever received was from a demanding DMM who said our consistency with colors and quality is second to none and that she never has to worry about a shipment from us. It was confirmation that going overseas to try and possibly save money probably wouldn’t pay off.
Making affordable, quality product is no easy feat.
It isn’t. It takes time to perfect. It’s been an interesting and ongoing learning curve, but I’ve discovered that you can make a very good product that’s not that expensive. That’s always been our strategy, and it will remain so going forward. That’s one of the main reasons we opened our own factory in 1989. After seven years of dealing with factory owners, I realized there was no way I could achieve anything consistently good having to depend on them. Factory owners are very volatile. If I had good season, they’d raise prices. If they had bad season, it’d be a nightmare getting samples. I had to find an alternative if I was ever going to grow the company. Opening our factory taught me how to negotiate with suppliers, how to make product, how to plan production, how to create that simplicity that make the shoe competitive in price but good quality. I’ve learned that sometimes the more expensive the product gets, the more problems you can have. The goal is to design desirable product, which may not make us the hottest company for that season, but it attracts plenty of customers who appreciate the style, quality and price.
What’s new for Spring ’19?
We’re introducing a new injected-foam insole that’s lighter and more flexible. Coming from a family of doctors, I understand how important it is to be healthy, and that means before you “need to go to the doctor.” Our new insoles offer the necessary support as well as cushioning. We’re also introducing improved linings that are smoother and softer but still structurally strong. Last but not least, we’re opening a new facility in Italy that will allow us to pre-stock components. We need to produce more in-season products because the customer changes constantly, and we want to deliver what she wants. We’ll be able to make it faster with this facility. It’ll be like having a bigger refrigerator in our kitchen with more ingredients to make shoes that we can ship in season.
Where do you envision Italian Shoemakers in five years?
The last two years has been an interesting evolution for our company. Several people who’ve worked with me for many years have retired. Some became grandparents and wanted to spend more time with their families, which I think is great. But it’s opened an opportunity to rejuvenate our company. We’ve recently brought on board some very good people in U.S. and Italy. It’s giving me the energy to look into more investment to grow the company. We’re working on developing even faster production cycles. Another goal is to expand further internationally. We currently do business in Canada, South America, Japan and Australia. We’re upping our ecommerce capabilities and implementing drop ship for select customers.
Any plans to sell direct to consumer?
It won’t be a main avenue for growth, but we need to represent ourselves in that channel. Our retail customers cannot absorb all the samples we produce, so DTC would be good way to test different products. That way we can give our retailers the sure things. We want to assure them to the best of our abilities that they will make a profit. These days, it’s all about margins and percentages, and unfortunately the product loses some of its importance in all that. Still, we want to give our customer who is working hard to make their store successful the products that will sell and generate margins they need. They have to cover a lot of expenses, too.
It’s like you’re embarking on Act II of Italian Shoemakers.
Yes, we’re rejuvenating the company. We want to just keep learning and growing. Today, everything moves so fast and we just aim to keep up. Our responsibility as a manufacturer is to provide our customers better product at competitive price with faster delivery. If we continue to do that, then I think we’ll be successful. And I think it’s relatively easy to do if you engineer your product line properly.
Simplicity seems to be a cornerstone of your business philosophy.
I am a simple business person. I’ve come to realize happiness is achieved by making simple things. I’d rather make simple products that lots of people enjoy than be No. 1 today and gone tomorrow.
What keeps coming into work each day?
It’s the endless passion in trying to achieve something that doesn’t exist. My eyes are constantly looking for opportunities in footwear. I go to bed at night thinking about the shoes we can make tomorrow. It keeps me highly motivated. Every day you can improve a little bit. Every day there’s something you can discover that you didn’t know the day before. Each morning when I’m driving to our factory, it’s like the first day. I can’t wait to get there. And on the drive home, I’m thinking about what I did wrong, whether I achieved anything, what needs to be done tomorrow… It’s like the production chain, it never stops.
What do you love most about your job?
I’m a lucky person. I get to do something that others enjoy, and I make it with passion and honesty. I’m very proud when I see someone wearing our shoes and when I hear how much a woman loves them. It means I’ve done something good. I also enjoy everyone I work with as well as my customers, who I want to be happy and profitable. I hope to continue doing this as long as I can. •