01. March 2015

« We hold the last flag high »

Talking with businessmen: Martin Michaeli, founder and owner of the French shoe company MEPHISTO. “Frankfurter Allgemeine Zeitung“, Monday March 2, 2015

Confortable, durable, and yet fancy: This is how a German Frenchman can produce shoes in Europe even today.

Sarrebourg, March 1st, 2015

The European shoe industry experiences since the nineteen-sixties a downturn which seems inexorable. According to numbers of the EU-commission, the industry had around 388,000 direct jobs in 2006. By 2012, the year with the latest numbers available, this number had already shrunk to 280,000.

But a small French town which belonged formerly to Gaulle is resisting. Yet, the hero of this tale is not a person out of a comic strip, but the really existing German businessman Martin Michaeli. Since fifty years he is producing in Sarrebourg in the Lorraine region shoe collections which are appreciated in the whole world. Angela Merkel, Arnold Schwarzen-egger, Steven Spielberg, the Queen of Spain, Brad Pitt and George Clooney as well as former Pope John Paul II., Luciano Pavarotti and Margaret Thatcher – they all wear or once wore one of the four Mephisto shoebrands.

“The last flag of the shoe tradition in France is now held high by Mephisto”, says Michaeli. The 69 year-old German who does not show his age is extremely proud of his achievement of a lifetime – and he does not hide it. He would not have any reason to do so, as his success in the daily battle against the structural change is more than remarkable. Today the biggest part of the Mephisto-production comes from the plants in Portugal and France. A staff of 2,800 (among which close to 2,000 in Portugal and 600 in France) is producing every year 3.6 million shoes.

Michaeli’s daughter Stephanie and his son Marc are working in management positions in the company and shall lead the resistance battle in the future. The concept: producing high- value shoes which are comfortable above all. In her marketing messages Mephisto stresses the soft footbed, the purposely maintained craftsmanship by hand and the use of natural raw materials.

“Mephisto? Aren’t this these incredibly comfortable, but old-fashioned shoes worn by the elderly on their bus trips?” asked once the newspaper “Die Welt”. But it is exactly this image the company is fighting. Mephisto wants her shoes to be easy to wear, but not old-fashioned. “In every collection we have 600 different styles, and among them there are very, very stylish ones”, says Marc Michaeli, son of the founder of the company.

The times when Mephisto was living largely on the success of one style are long gone. The famous “fast lacer” called Originals was once a big hit; a bit square, but very comfortable. The shoe has been copied 144 times; the entire Alsace-Lorraine region was producing this style, including the archrival Bata, as the production capacities of Mephisto were exhausted. The boom lasted for more than ten years, “but one day the concentration on this shoe was no longer good. People did not see the other styles any more. In Germany, the Netherlands, Switzerland and Austria we were considered being a producer of one single item”, explains Michaeli.

This is why Mephisto systematically expanded her range. On top of the core brand Mephisto there is today the ergonomic brand Mobils, the brand Allrounder for hiking and other outdoor activities, and the brand Sano which is sold as being especially comfortable. The head of the company declines to talk in detail about the latest numbers, but he gives away that Mobils is showing a double-digit growth, like in Italy and Spain. Sano, however, is still the weakest link in the chain.

The only brand produced in China is Allrounder; the shoes present a high portion of textile material. Michaeli took this decision not with a light heart. “There you have much less control over the production. What do you do, for instance, if there are issues because consumers develop allergies?” The regulations for tanning materials for example are far less severe. – But shouldn’t there be even more relocation of production to China, as the production cost are so cheap over there?

“I do not want that”, says Michaeli almost defiantly, adding: “This is probably something for tomorrow.” Moreover, he adds, the growth of Mephisto in China is not as breathtaking at it had been imagined. “We have around one hundred shops in China. But the Chinese who come to us want shoes made in France or in Europe.”

Michaeli is a kind of self-made businessman that has become rare today. The son of a shoe retailer had always wanted to become shoe maker. Immediately after attending the technical shoe school in Pirmasens he went - with little knowledge in English - to America, where he soon became plant manager. When he returned after some years to his home country, his friend and founder of Adidas, Horst Dassler, gave him the advice to set up his company in the Alsace-Lorraine region. In this region, people were speaking two languages, were open-minded and diligent. Michaeli travelled there from town to town and asked the mayor: ”Do you have communists here?”

He did not embrace labour unions either. At first, he started in Alsace, then he relocated two more times, before he finally settled in Sarrebourg, today the headquarters of the company, eighty kilometres east of Nancy. Michaeli produced relentlessly, first in an old school building, then in a former stable, always with the goal in mind to build an international corporation. He succeeded: Today Mephisto is exporting 80% of her production in 86 countries. The sales revenue can be estimated at least at 800 million Euros (see box). Mephisto is also profitable, assures Michaeli. He is proud not having had a single time to use short-time working in fifty years. “And on top of that, as profit sharing our employees received every year the equivalent of two or more monthly salaries.”

However, the plant in France has lost in importance compared to the plant located in Portugal. In Sarrebourg only small series are still produced. Moreover, Mephisto is focused on increasing her sales, in order to reduce the pressure from the cost side. To this goal, the company intends above all growing the number of corporate concept stores, as the brands can be displayed there in all their width. In Germany, Mephisto has “far too few stores”, says Michaeli – there are 34, compared to 900 around the globe. He is looking for locations in top areas, but not in extremely exclusive areas. Recently a new store was opened in the Schadowstrasse in Düsseldorf. Abroad, Mephisto runs, for example, a store in New Bond Street in London.

Michaeli lives today in Switzerland, but still travels a lot and defines the big lines in the company. “I want to continue many more years”, he says and adds in his immodest way: “I am glad to have the company and the company is glad to have me”.


Author: Christian Schubert