Bonia’s brand crosses borders

KUALA LUMPUR: “Leather is our passion”, said business development
general manager of Bonia Corp Bhd Geoffroy de Drouas during a recent
exclusive interview with The Edge Financial Daily at its headquarters
here.

What started over 30 years ago as a humble leather goods
wholesaler is today a local leather empire with a brand strong enough to
win business overseas.

Bonia was founded in 1974 by executive
chairman Chiang Sang Sem, who was at that time a leather goods
wholesaler. Inspired by 16th century sculptor Giambologna on a trip to a
leather trade fair in Bologna, Italy, Chiang registered the name
“Bonia” in his tribute.

Since then, he has turned the business
from a wholesaler to a leading fashion house renowned for its quality
leather handbags, shoes and menswear. Its growing line of fashion
accessories now includes perfumes.

Over the past four years,
Bonia’s revenue grew at an average annual compounded rate of 13% a year
from RM221.37 million in 2006 to RM360.1 million in 2010. Net profit
growth was even stronger from RM13.83 million to RM33.55 million,
reflecting a 24.8% compounded annual growth rate over the same four-year
period.

Closing at RM1.68 last Friday, Bonia’s market
capitalisation stood at RM338.64 million and is trading at eight times
current year earnings, according to Bloomberg data.

Bonia built
its name on quality leather goods, mostly calf hide, but also including
nappa, ostrich and deer skin. Recently, the label relaunched a
collection which used calf leather from Italy that were coloured using
the more eco-friendly vegetable dyes.

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De Drouas: Retail is [very much about] detail.

In efforts to keep abreast with the ever evolving designs in fashion, Bonia Design Studio was registered in Italy last month.

“We
have set up a design studio in Milan with a designer who is heading the
team there. His name is Gaetano De Franceschi,” said de Drouas. De
Franceschi helped Bonia create its 2010 Spring/Summer collection.

With
an experienced designer at the forefront of the fashion wave, de Drouas
foresees the brand entering into the European market in the not too
distant future. “We plan to go through the Italian department stores,
like Rinascente, and hopefully Galleries Lafayette in Paris,” he said.

Other
foreign expansion plans include the Middle East, where Bonia wants to
increase its presence. It already has operations in Syria, Oman and
Saudi Arabia. Currently, the group is actively seeking a distributor in
Dubai and from there, Bonia also plans to tackle the rest of the region.

“We
really have strong potential in the Middle East for various reasons.
First of all, a lot of people from the Middle East come to Malaysia and
they are familiar with the brand. Then, Malaysia has a very good image
in the Middle East,” de Drouas explained. The region’s current
instability means it needs to be a tad patient in executing its
expansion plans there.
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When
it comes to appointing a retailer or distributor, de Drouas said Bonia
needs to be cautious in selecting the right partners to protect its
branding.

“We are looking at people having experience with
retail industry. This is essential. You don’t order shoes the same way
you order spare parts. Retail is [very much about] detail,” he said.

On
the home front, Bonia sales currently make up 75% of group revenue, up
from 70% four years ago, as tourists in Malaysia lap up its offerings at
its well-placed boutiques in Kuala Lumpur, Penang, Genting Highlands
and the Kuala Lumpur International Airport.

“We have been
receiving emails from expatriates who’ve moved to the region asking
where the nearest Bonia boutique is,” De Drouas said, adding that a
number of its loyal supporters prefer Bonia products to the more
globally known names as they recognise a good product with the brand
while others choose to be different from the brand-centric herd.

“I
was in Galeries Lafayette (in Paris) when I saw a woman with this
beautiful Bonia bag. I ran up to her to find out where she had got it
from, and she said that she had got it in Malaysia,” De Drouas said of
an experience he had with a customer, and the fact that the Bonia brand
is gaining more international attention.

With new designs
released every year, the Bonia label draws in crowds from a wide
spectrum and is diversified enough to suit different tastes. One example
is in men’s shirts.

“Before, we had shirts with no pockets. So,
I said [to the team] look, in Malaysia if you want to sell, you need
pockets. Not necessarily with the logo, but I say... [to] please
everybody, have it with and without the logo.”

Bonia has also
diversified its product range by creating a line of perfumes for men and
women. The idea was introduced by De Drouas himself during a company
meeting two years ago.

“Not because I’m French,” he joked, “but
because I’ve been in this business before, I suggested we come up with
fragrances to bring up the image [of Bonia]. It’s easy to manufacture,
it’s easy to store, easy to sell. [It] doesn’t take much room, and it
has at least three years shelf life.” The French-made perfumes might
soon be airborne as Bonia is currently in discussions with Malaysia
Airlines to sell them in-flight.

As for potential competition on
the local scene, Bonia has been able to create a niche. Its core leather
goods products face no local competition in Malaysia, and the Bonia
brand has been extended to include menswear, accessories, perfumes and
luggage sets. Late last year, the company expanded its portfolio of
brands and market reach by acquiring a 70% stake in Singapore-based Jeco
Group.

Jeco is the licensee of Pierre Cardin’s leather goods in
Singapore and the master licensee for Renoma in Singapore, Malaysia and
Indonesia. It is also the sole distributor of Bruno Magli products in
Singapore and the owner of the licence to the Braun Buffel brand in Asia
Pacific.

Indeed, De Drouas is particularly excited about the German brand Braun Buffel being under the Bonia stable.

“Braun
Buffel compliments Bonia well. It’s a similar industry. So, this is a
business we understand, we can manage it,” said De Drouas. The
acquisition of this licence helps Bonia strengthen its weak position in
China where Braun Buffel is popular.

Sophisticated, classic and
with attention to detail, Bonia has grown from its humble beginnings to a
respected label. De Drouas said the company’s main objective is to
consolidate the company within the next two years. With plans to board
flights as well as enter into Europe, exciting times are ahead for
Bonia.