When Terry S.A., Inc. became the Philippine distributor of Havaianas in 2003, the company’s warehouse and office were bedrooms in the childhood homes of founders and husband-and-wife team Freddy and Anne (née Arcenas) Gonzalez.
Nobody expected they would sell their millionth pair three years later—or that they would import 2 million pairs on average annually. The couple only wanted a good sideline. “Because we were such newbies, I didn’t realize that this will take over my life, and that we would build a whole company around it,” recalled Anne, Terry S.A.’s managing director.
Despite their lack of a business background, they won over management of Havaianas’s parent company Alpargatas S.A. The latter had just repositioned Havaianas as a premium product and was only starting to export via small distributors. They sold the slippers at pricey lifestyle shops like Aura Athletica and Rustan’s Department Store.
A huge opportunity
A year and a half into it, their initial stocks were sold out. “There was a moment: Do I really want to take this to the next level? We got this thing going, but where do we go from here?’ It was too overwhelming. We were at a crossroads,” Anne recalled.
What stopped the panic was a reminder from her dad that all she and Freddy had to lose was money. “We weren’t talking millions and billions, it was really a startup,” she noted. The opportunity to grow, however, just could not be passed up.
Anne and Freddy opened a credit line and partnered with Jon Syjuco, a partner at Aura Athletica (which was eventually acquired by Terry S.A.). By 2005, Terry S.A. had opened its first All Flip-Flops store, selling all Havaianas footwear, in Glorietta, Makati City; there are currently 38 branches nationwide.
In 2009, they won the rights to distribute Havaianas in Malaysia and in Singapore. “I don’t think [Alpargatas] realized we would become one of their top countries, consistently every year, and their top country in Asia,” said Anne.
One of the biggest breakthroughs for Havaianas locally is their signature event, Make Your Own Havaianas, which started small in 2006, but progressively got bigger.
Celebrities became fans of the brand, here and abroad, which also helped. “One of our early supporters was Pia Magalona—and she found that so many young moms like her were collecting. They would build friendships, and started calling themselves Havaianaticos,” said Anne.
Indeed, it was a strategy that the mother brand had used worldwide. Dominique Turpin, a professor at the International Institute for Management Development (IMD) business school in Switzerland, said Havaianas made it harder for competitors to gain a foothold by going into “as many markets as possible, as fast as possible,” using the free publicity generated by international celebrities, and tailor-fitting their campaigns to each market.
“At the center of Havaianas’ success was the formula used by most other successful new brands, wherever they are based: a dedicated, persistent, and committed group of people created an innovative product that is genuinely meaningful for customers,” said Turpin, in his article, How Havaianas became a global brand: The potential for emerging countries to become international marketers.
“Filipinos really embrace it—they associate it with a milestone or a memory,” said Anne.
Nowadays, Terry S.A. markets Havaianas alongside other brands, including their own Philippine-made clothing line called Thread 365, sold in their multi-brand concept store CommonThread, which opened in Malaysia, Singapore, and the Philippines in 2013.
Anne still has sleepless nights—seems like a common occurrence to those who employs around 500 people—but she welcomes the nerves. “Anxiety is a sign that you care, that you want to do well, because if you’re overly confident, that’s a slippery slope,” she said.
She is not worried over competition, however. “I believe the market is big enough. That’s not being optimistic or in denial. We’re still here. It’s a testament to being a good product, having a good brand, and really sticking to our guns.”
Maricris is the former managing editor of Entrepreneur Philippines magazine.
This article was originally published in the June 2014 issue of Entrepreneur Philippines magazine. Minor edits have been done by the Entrepreneur.com.ph editors.