Lunch at The Four Seasons with: Mario Moretti Polegato
Published by The New York Sun on 2006-05-23
Mario Moretti Polegato was born a vintner and became a shoemaker.
"Cultivating vineyards and making wine was the family business," the founder and chief executive officer of Geox, one of the world's three biggest shoe companies, said. "But producing shoes is my mission."
That mission has made him a billionaire and one of the wealthiest men in his native Italy, according to the 2006 Forbes annual list of rich people world-wide.
Mr. Polegato said he wasn't particularly awed by his membership in the very select club of global billionaires.
"There's no point in being rich if you cannot help people," he said. "So to me, philanthropy is as important as creating jobs."
It took Mr. Polegato barely a decade to drive his shoe company from scratch in a small factory near Venice to one with a market capitalization of nearly $4 billion. Geox will sell 16 million pairs of casual shoes in 68 countries this year, reflecting a 30% growth over 2005.
Those countries include America, where Geox will soon increase its stores to 15 from the current 7.
"The American connection is extremely important to us," Mr. Polegato said. "My view is that the business relationship should be built on what already are strong cultural and historical ties between our two countries."
In a recent conversation with a reporter, Mr. Polegato made frequent references to culture and history, both subjects that he's amply qualified to talk about. After all, he's a scion of a family that has been producing wines in northern Italy since 1622 - in 2006, it will turn out 18 million bottles of clarets and cabernets. He has a degree in oenology from the University of Conegliano. He's studied law. He's on the boards of various museums and cultural societies.
"My shoe-making flows out of Italian culture - the emphasis we have always put on style and precision," Mr. Polegato said.
The precision part of the Italian ethos led him to invent a membrane for shoe soles. His invention expedited air flow in both rubber and leather soles. In short, Geox shoes breathe, and also are water proof. The feet - which in the average person produce 100 liters of sweat a year - are kept cool and dry.
"I offered my technology to businesses in Britain and America more than 10 years ago - but nobody seemed to believe in its efficiency," Mr. Polegato said. "So I decided that I would start my own production."
To start that production meant he'd need capital. Mr. Polegato poured $1.2 million of his own money into the enterprise, and persuaded five people he knew in Venice to work for him. In the event, they and other investors found much to celebrate over - the company has consistently yielded 30% profits annually. The value of Mr. Polegato's initial investment has risen to more than $3.5 billion.
Well before he made his fortune, of course, Mr. Polegato needed a name for his product.
"I looked in Greek mythology and came up with 'Geox' - which stands for earth," he said. "It seemed fitting to name a shoe company that."
But why not look in Roman mythology for a name?
Mr. Polegato said: "Somehow 'Geox' was hard to match."
His success is hard to argue with. Not only is Geox the largest shoemaker in Italy, it's rubbing shoulders with two much older manufacturers, Clarks of Britain, and Ecco of Denmark. Mr. Polegato employs 5,000 men and women, not only in Italy but also in countries like Romania, Czechoslovakia and China, where he has assembly plants.
In those plants, Mr. Polegato turns out shoes for the entire family. His shoes sell around $120 a pair.
"No matter where they are assembled, all our shoes have Italian design and material," Mr. Polegato said. "And in every facility, we have an Italian supervisor. Our leather is made at our private tannery in Florence. Our marketing is aimed at projecting the appeal of Italian design worldwide, combined with my 'breathable' technology."
The appeal of his shoes led him to start making clothes. Mr. Polegato said that among his patented inventions is a jacket with perforated shoulders that allow the fabric to breathe.
"It's important to allow the body heat to rise inside the jacket," he said. "It's called the 'chimney effect.'"
Mr. Polegato reached across the dining table and opened the reporter's jacket. He was clearly displeased at the Savile Row tailoring.
"See what I mean? There's no outlet for the vapors trapped inside the jacket to rise," Mr. Polegato said. Sure enough, the bottom of the inside lining was cooler than the section near the shoulders.
That demonstration over, Mr. Polegato steered the conversation toward his focus on innovation. More than 3% of the company's annual sales of $600 million is channeled into research and development, a relatively high figure in the shoe industry.
"You see, I have continually emphasized R&D," he said. "In fact, our company has a university on the premises where we train engineers in our technology. Some of our best ideas come out of that process. Right now, we have nearly 40 patents."
The subject of patents is dear to Mr. Polegato.
"I believe that it's one of our shortcomings in Italy - we haven't learned to obtain patents in a timely manner," he said. "That's why our ideas get 'borrowed' elsewhere. Maybe it's just the traditional Italian generosity of spirit that we think nobody is going to steal from us."
Another subject dear to Mr. Polegato is management.
"There's traditionally been too much power in the owner of small and medium sized businesses in Italy," he said. "I decided to decentralize management by bringing in specialists to head various departments - and then let them do their best. We implement a code of ethics at the company. I encourage open communications, both internal and external."
When Mr. Polegato talks about management, he does so with a special sophistication that comes from the gene pool. His family owns Villa Sandi, one of Italy's best known vineyards; production of wines is managed by his mother Amalia, and brother Giancarlo. (Mr. Polegato's father Divo died in 1979 when he borrowed Mario's Ferrari and crashed, according to Forbes.) Among the wines Villa Sandi produces is Italy's best selling Champagne, Prosecco.
"From wine making to shoe making - life has been very joyful," Mr. Polegato said.
Senior Writer and Global-Affairs Columnist