Fashion statement an indicator of emerging Phl market

MANILA, Philippines - Signature European and US clothing brands entering the Philippine market normally set their first step in cosmopolitan shopping malls like Rockwell, Greenbelt or Serendra. But Italian label Ellesse is looking way south – toward Davao City on the island of Mindanao.

Ellesse is opening its first Philippine store next month in the 61,000-square-meter, Ayala-run Abreeza Mall, which opened in May. If any, the Davao opening may be an indicator of an economy that is no longer centered in Manila.

“You’ll be surprised. People in the provinces actually have the money, and they buy things sometimes from abroad,” says Cindie Cheng, brand manager for Ellesse in the Philippines. “So what we want to do is bring the brands to them.”

Ellesse’s fashion style is about giving a sporty but functional look to everyday wear, which is totally different from the highly competitive Adidas and Nike.

“It’s not about sweating or winning at all cost. It’s about performing and looking good,” says Mike Stopforth, managing director of London-based brand management company Pentland Group, which bought 90 percent of the label in 1994.

Ellesse founder Leonardo Servadio retained 10 percent ownership of the label. In case you don’t know how to pronounce the brand, the name Ellesse is derived from Servadio’s initials “L.S.” (pronounced “el-less”; the “e” at the end is silent).

Servadio founded the brand in 1959 in Perugia, starting with ski wear. He later expanded the line to tennis. Ellesse had endorsers such as tennis legends Chris Evert, Guillermo Vilas, Boris Becker and Anna Kournikova. It was during the 1980s that Ellesse gained popularity when it combined sportswear functionality with street wear.

“We’d like to define a category that is a mix of sports and lifestyle,” says Stopforth. “We want to see more people wear sportswear as casual wear. Many brands are getting into that category and we want to get there early enough and be renowned for it.”

Ellesse’s main target market is the 20-to-30 age bracket, people with a disposable income. “It’s for people who are sporty, and they can wear it everyday, anywhere,” says brand manager Cheng. “With Ellesse, we’re going with the functional yet fashionable.”

Although Ellesse’s niche market may be in the economic groups AB and upper C, its sporty look may have a wider appeal. It is looking at a potential large market. An estimated 61 percent of the Philippine population of 100 million is between the ages of 15 and 64, according to the CIA’s World Factbook. The median age of the entire population is 23 years old.

Ellesse plans to enter other Asian markets in the coming months. China is set for next year. The label is marketed by Manila-based Primer Group of Companies, a consortium mainly engaged in the retail and distribution of the world’s top consumer brands and products. It has offices in Hong Kong, Indonesia, Japan, Malaysia, Singapore and Thailand.

“We see Asia as the next big challenge for us. There are a lot of emerging markets in Asia. Southeast Asia is obviously an important part of that, based out of the Philippines,” says Stopforth.

He notes that among Asian markets, the Philippines’ mixed Asian, European and American culture may add to Ellesse’s success – the same way the Philippines overtook India in the business outsourcing sector because of Filipinos’ American English.

“One of the reasons why we can succeed here is an appreciation for western brands and for the understanding of them as well. Every brand has to mean something. And if you visit other parts of Asia, the very premise that the product is Western is enough,” Stopforth elaborates.

“But here it’s a little more sophisticated. If you go around, there are a lot of shops here with a great mix of brands here that are obviously doing pretty well. The Filipino customer understands what those brands are. So, for us, it’s very different from the rest of Asia in that respect.”

If Ellesse can be used an economic indicator, the readings should be positive then. Investment bank Goldman Sachs lists the Philippines in its so-called “Next Eleven” or “N11” group of emerging economies, as having a high potential of becoming among the world’s largest economies in the 21^st century.

Standard & Poor’s Ratings Services has assured that its recent downgrade of the United States’ investment rating from AAA to AA plus will have “no immediate impact” on the sovereign ratings of Asia-Pacific countries, the Philippines included. S&P’s upgraded the Philippines’ rating last year from BB- to BB, two levels below investment grade.

Ellesse will officially launch in October. Stores are planned at Ayala Town Center in Muntinlupa City in December and Bonifacio High Street in March. Rockwell and EDSA Shangri-la Mall are also in the works.

It is a known fact that a rise in one’s financial status comes a pricier taste in clothes. Stopforth doesn’t cite economic figures but definitely sees a lifestyle change. “The needs and tastes of the consumers in the Philippines are evolving, creating a demand for clothing and footwear that not only performs, but looks good as well.”