BUSINESS: Suppliers Nicola Zotta: Diverse Portfolio and ‘Entrepreneurial Spirit’ Drives Marchon’s Approach By Marge Axelrad Monday, February 13, 2017 12:00 AM Marchon’s president Nicola Zotta (l) and Thomas Burkhardt, SVP Global Brands, Marketing & Design at Marchon Eyewear. NEW YORK—Notwithstanding the newsworthy changes in the eyewear industry within the past month, noteworthy changes have been quietly in the works at Marchon Eyewear, particularly in the last 12 months, as the organization of one of the world’s leading eyewear players has reflected executive changes, reassigning people from within to new roles, an emphasis on internal supply change organization, and a rebalancing of its brand portfolio—all in a more conscious effort to become part of the more unified businesses within the VSP Global Group. Marchon’s president, Nicola Zotta, took on his current role in June 2016. He has been with Marchon since 2009 and previously served as managing director of EMEA (Europe, Middle East, Africa) and APAC (Asia-Pacific). When he moved into the position of president, VSP Global CEO Jim McGrann noted, “We are in good hands with Nicola at the helm. His expertise in go-to-market strategies, product, and supply chain that have allowed Marchon to grow significantly in Europe and Asia, will be further utilized in his new role.” New to Marchon and to the eyewear business is Thomas Burkhardt, who joined the company in the newly created position of SVP Global Brands, Marketing & Design at Marchon Eyewear in February of last year. He manages the domestic and international licensed brand teams, house brands and sports brands divisions as well as global marketing, media, creative and public relations. Burkhardt came from Coty, Inc. where he led the Calvin Klein Fragrance & Cosmetics business as vice president of global marketing since 2010. In light of the major merger plans between Luxottica and Essilor, announced just a few weeks ago, Zotta stated, “Being a part of VSP Global, which includes the only national not-for-profit vision benefits provider in the U.S., we’re connected to a mission that is a great differentiator in our industry: We remain focused on expanding access to eyecare and connecting VSP’s 82 million members around the world to independent eye doctors.” Vision Monday: Can you bring us up to speed on some of the changes taking place within Marchon organizationally in the past year? Nicola Zotta: 2016 has been a year of significant changes, as you know. Roughly 50 percent of the management team has either taken new roles or come on board. Not so many additions from the outside world—Thomas is one of those examples—but also we have people taking on new responsibilities internally. I’ve been with the company eight years, though I’m new in my position; we have a new executive on our team taking on my previous responsibilities in Europe who started in September of last year, based in Amsterdam. Thomas’ arrival gives us new opportunities. We are ready to have a cohesive, consistent and integrated approach to managing our brands. We’ve identified three segments in which we categorize our brands now—these are performance, lifestyle and fashion. Whereas in the past, we operated a bit separately in different parts of the world with our brands, Thomas’ perspective has given us the chance to put everything together, from product development, design, marketing and trade marketing. That’s been a crucial decision as our brand portfolio one, of the key competitive levers we have. VM: Can we explore a little further these three pillars of the Marchon brand portfolio as you view it? Thomas Burkhardt: The biggest change we’ve made is to create a structure with fewer silos, where different groups within brands didn’t necessarily speak to each other or maximize their approach. We are creating a view toward global branding, with one design and product development function, where our customers and the end consumers can benefit. We can exchange talent and knowledge about products and processes and information, too. We can coordinate better, make sure our launches and portfolio has the least amount of overlap, that we are clear and communicating objectives and tools for us and for our partners. Zotta: We view this as an evolution, not a revolution, of our company. Marchon has grown a lot in the past six or seven years and we are now trying to improve our internal views and marry them with the mission and viewpoint of VSP, too. We see the importance of having direct presence in certain markets, being able to speak locally to our customers; that’s not going to change. We’re not centralizing. But we are trying to expand best practices. There are areas where we’ve been able to test new ways of working that we can bring into other geographies to other customers. These can be in programs that support our accounts with in-store merchandising, with the way we make products more visible in the store and how we work to offer training and guidance to our partners, in the way of storytelling about brands—for their staff and for the end consumer. VM: And what about internal systems and supply chain ideas? Marchon has always worked with a range of outside suppliers as well as its own internal capabilities. Zotta: We continue to believe that flexibility from a production perspective is at the core of our supply chain. We’ve made investments, like our new Italian acetate production for example, as well as our own expanded capabilities for injection in our Italy facility and new distribution facilities. We don’t see Italy becoming dominant in our sourcing, we will continue to source from Japan, from China, and are looking for a combination of technology, cost and speed. But today’s market is changing so much; it’s become fashionable to talk about ideas like ‘see now buy now,’ and it’s essential to innovate extremely quickly, shortening some traditional approaches to ‘time to market.’ We’ve made significant investments in our IT systems. As we looked to streamline our supply chain, we recently made the decision to transition our Canadian distribution location and customer service operation to our U.S. headquarters in Melville, New York. This strategic decision was made to better serve and improve our Canadian accounts, and creates a more efficient operation that leverages Marchon’s broader infrastructure. We are committed to Canada and our sales, marketing and finance teams remain at the Marchon office in Montreal. Thomas Burkhardt. Burkhardt: We did a lot of work on our brands in 2016. We took two views, one was consumer focus—what are men women children around the world looking for these days in eyewear? Another is capabilities—what are Marchon’s strengths and how do we build on those? By fashion brands, we mean those which bring latest trends latest styles, are lose to what’s going in Paris, Milan, New York, the fashion competencies—like those exemplified by brands like Chloe, Ferragamo, Etro, Marni. In terms of performance, we view this broadly as this is more than ‘sport.’ Marchon’s capabilities in technology and innovation range from the work we do being a partner with Nike, for example, for so many years, now with Columbia, too, and, of course, Flexon. There’s a spirit to them that’s different than the fashion brands. We’re calling it a spirit of achievement. We also can tap the great capabilities of VSP in this area, including The Shop, in particular, for new cutting edge ideas such as The Level. We have strengths with Flexon of course and with our house line of Marchon NYC. We are also most optimistic about Dragon, which is not only excelling in sun and sport but the new Dragon optical line is one of the fastest-growing in our portfolio. Finally, once you have to two strong pillars of fashion and of performance, then you can look to the middle, what we call the lifestyle brands. They are not the edgiest but we couldn’t do the best possible job here if we didn’t have the other pillars. These are brands like Nine West, Nautica, Cole Haan, Anne Klein, even Lacoste. Actually, Calvin Klein is one of those unique brands that can straddle from fashion to lifestyle, it’s got such breadth. We are very, very excited about the ‘new’ era of Calvin, with Raf Simons coming in and we have ‘launched’ again with them at his Feb. 10 show. Calvin is ready to reconquer its place as the U.S.’ leading fashion brand and we are very upbeat about this and what it means for eyewear and sunwear. VM: How would you characterize Marchon’s view for the next five to 10 years? Nicola Zotta. Zotta: Our vision statement is really to become the most admired global eyewear company. We’ve been international of course for the last 10 to 15 years but the concept of admiration is new and important. It describes the way you interact with customers and it involves trust and approval. We are part of a private not-for-profit organization in VSP. We don’t have shareholders, we’re not on Wall Street. All the profits we make are reinvested into the company to help us help our partners be stronger. We are not working to pay our debts or to pay our shareholders. VSP, too, here and around the world, has a corporate mission, to help people see better and Marchon is involved in that. We also feel from a corporate culture perspective that we are a startup—a startup with 30 years of experience. When you’re a startup you have the energy and enthusiasm of your people, who try to make the impossible possible, the sky’s the limit. But when you are 30 years young, you know there are some mistakes you’ve already made, you have overcome these and learn from those. The entrepreneurial spirit of Marchon has always been there. When we became a part of VSP in 2008-2009, we added some additional components into our mix and we became part of a mission-driven company. This is powerful for us; this is what sets us apart from other players. VM: Can we quantify Marchon’s sales today? Zotta: We do not breakout corporate segments within VSP Global. But I would say our business is approximately 50 percent from the U.S. today, with 50 percent international. We are definitely among the top three global eyewear companies. And we can say with confidence we are number two in the U.S. Since Marchon’s acquisition by VSP in 2008, Marchon has grown its revenues by 34 percent overall. Andy Skitmore Sets Strategic Sales Direction for Marchon in the Americas Andy Skitmore. NEW YORK—Marchon has been revisiting its sales organization and support structure to better reflect what its customers need in various practice and retail settings. Andy Skitmore was appointed to his current role, senior vice president overseeing all of Marchon sales in the Americas, a year ago. The long-term Marchon executive had previously served as senior vice president of sports brands for Marchon since 2009. He is setting the strategic sales direction for Marchon. Of those priorities, Skitmore told Vision Monday, “Having the right people in place is at the core of my sales and business philosophy. People buy and do business with people they like and respect. And this is a people business.” He added, “Since Marchon/Altair was founded in 1983, it has been about having the right team in place. Our teams have a passion for what they do and I know that carries through to our customers. From a service and support perspective, Skitmore said, “For 30 years, our goal has been to provide the best possible service to our customers and partners. Every minute of every day we strive to provide solutions to deliver a seamless experience. And, we have a world class customer service team at the end of the phone line. “But the key point of Marchon/Altair’s magic is that we treat everyone according to their needs. Our customers are not numbers—in many cases they are friends and partners and we have a common goal—to provide the best possible optometric and optician care to the patient and consumer.” Skitmore said the VSP Premier program will continue to be a focus in 2017. “Our Premier practices have benefited greatly from being part of this program. We know that owners and doctors want to see more patients. “The Premier Program does that to the tune of 26 percent compared with a non-premier practice. Our teams are trained to take our customers through the benefits of the program in order to grow the business and offer a tailor-made approach to achieve the best results.” Marchon’s brand mix and how the stories of those brands are told, is another priority, Skitmore pointed out. “The world’s premier sport brand, Nike, is now joined by Columbia in our performance category. Our own Marchon brands, include Dragon, one of our fastest growing brands, and Flexon. “In addition, global brands such as Calvin Klein have been with us since eyewear brands first took off in the early 1990s. And now, the renewed excitement for Calvin Klein, with Raf Simons arriving, provides energy for our sales team and new stories. Our sales teams believe in taking the time to tell the brand stories to make sure the right brand matches the right patient,” Skitmore said.