ANNE ARCENAS-GONZALEZ, TERRY S.A. INC.
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 just 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,” recalls 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 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?’ Parang it was too overwhelming. We were at a crossroads,” Anne recalls.
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 notes. The opportunity to grow, however, just couldn’t 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 in Makati City; there are currently 37 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,” says 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,” says 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, says 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,” says 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,” says 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 last year.
Anne still has sleepless nights—anyone who employs around 500 people is entitled to—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 says.
She’s 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.”
CRISIS MANAGEMENT
In 2009, just when Havaianas Philippines had secured its place in the local and regional markets, the recall of Havaianas flip-flops in the United States resulted in a ripple of unease among Filipino consumers.
The furor got to the point that the Department of Trade and Industry issued statements to media that the slippers would be destroyed if proven to have high lead content.
“I really thought it was a crisis. If only people knew the real story,” says Terry S.A. Inc. managing director Anne Arcenas-Gonzalez, indicating the U.S. pullout was voluntary, and that Havaianas Philippines had—despite more relaxed local regulation—followed suit.
Gonzalez says she “needed to do interviews on TV” to communicate that they understood the concerns of the customer and would accept returns and provide refunds or replacements. “Everyone in the company was pitching in to handle calls, do logistics for the exchanges,” she says.
She also had the on-shelf models tested by SGS Philippines to prove these were safe.
“It made us a stronger brand and a stronger company,” she says. “We did not go the route of being overly defensive, but we did not do the route of not acknowledging,” she concludes.
Originally published as part of a composite feature, "Fearless," in the June 2014 issue of Entrepreneur Philippines.
Photos of Anne Arcenas-Gonzalez by Jason Quibilan. Makeup by Vida Non Jaucian.