Hering brings forward its store opening target by one year.

Behind the increased pace of Hering Store openings in the country lies a regional analysis effort, involving local consultants, to assess potential new markets for the network's franchises. This strategy has begun to yield results, leading the company to reach its 400th store almost a year ahead of schedule. This has even prompted the company to expand its planned Hering Store openings for this year from 71 to 86.

According to Cia Hering's commercial director, Ronaldo Loos, within this expansion process, for the first time there has been a balance in the opening of franchises by region, with emphasis on the North and Northeast. "Although the market is a little less enthusiastic than in previous years, we are finding partners throughout Brazil willing to invest in the Hering Store franchise. In this way, we have managed to accelerate our expansion process beyond what was initially planned," he told Agência Estado.

Loos highlighted that the improvement of the work through regional consultants began last year. "Before, the expansion process was very centralized, but decentralization allowed us to speed up the expansion and better understand the opportunities for opening franchises in the rest of the country, understanding these consumers and shopping mall managers," he said. According to him, currently the only state that does not have a Hering franchise is Roraima.

The director of Hering also highlighted that in some regions of the country there are more potential franchisees than available stores. Furthermore, he commented that the company conducts a detailed analysis of the point of sale and also of the franchise applicant. "We carry out a rigorous feasibility study of the operation and, most importantly, whether the investor has the capacity to support the necessary investments," he said.

According to him, some of the new franchisees are retailers who already sell the company's brands through multi-brand stores. "Previously, the greatest demand was from existing Hering franchisees. Today, as we are entering new cities, there is a trend towards greater distribution. We are looking for investors who know the region."

Studies conducted by the company, based on brand penetration assumptions and socioeconomic data, show that Hering Store has the potential to reach 604 stores in Brazil. "As GDP, income, and consumption grow, and also if we decide to enter smaller cities or regions, this number could certainly be increased," stated the company's president, Fabio Hering. The company's current expectation is to end 2011 with 433 units.

According to Luis Henrique Stockler, managing partner of Ba Stockler and professor at FIA/Provar and FGV, Hering's accelerated expansion stems from seeds sown long ago. "The company increased the responsibilities of regional managers, who were previously more focused on supplying the stores and have now become commercial managers of sales, operations, and expansion," he highlighted.

According to Stockler, the strength of the Hering brand facilitates entry into new cities, especially smaller ones. However, he warns that in these markets, in many cases, the franchisee may compete with Hering itself, since many retailers sell the brand through multi-brand stores. He estimates that there are currently 10 multi-brand points of sale selling Hering products.

Since the late 90s, the company has reinvented itself, shifting its focus away from producing basic clothing lines. "The Brazilian consumer has become more sophisticated and is looking for new products, launches, collections, and fashion," said Fabio Hering.