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Footwear giant Aldo shakes up top ranks as founder steps down

Shoes on display at Aldo in the Yorkdale Shopping Centre in Toronto.

Darren Calabrese/The Globe and Mail

Aldo Group Inc. is getting a top-level leadership revamping as the footwear giant prepares for rougher retail waters while searching for potential acquisitions to shore up its growing international business.

Founder and namesake Aldo Bensadoun, 77, will step down as chairman next month while his oldest son, David Bensadoun, 46, who currently heads its key North American business, will take over as chief executive officer from Patrik Frisk, 54.

Mr. Frisk – a relative newcomer to Aldo and global shoe-industry veteran – was brought in as CEO 2-1/2 years ago to oversee a transformation of the company's operations in a bid to adapt to the digital age as well as to mentor David Bensadoun to eventually succeed him.

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The timing of David Bensadoun's promotion to CEO is about six months earlier than had been initially planned, underlining how fast Mr. Frisk has reshaped the business and paved the way for the changes, the younger Mr. Bensadoun said.

"We were able to do more in the last 2-1/2 years than we had in the previous 10 years, in terms of change," he said in an interview.

Also as part of the leadership changes, which take effect on April 3, Jurgen Schreiber, 55, a former CEO of Shoppers Drug Mart and Rexall Health, will replace Aldo Bensadoun as chairman of the company. Mr. Schreiber has been on Aldo's advisory board for four years. And Norman Jaskolka, 62 and a 22-year veteran of Aldo who heads its international division, will also become deputy chairman.

Launched in 1978 in Montreal and now in 99 countries, Aldo is one of the rare domestic retailers that has managed to carve out a global name for itself while many other Canadian chains struggled beyond the Canadian borders. Nevertheless, stalling growth in Aldo's critical North American market and massive shifts in the retail landscape pushed it a few years ago to look for dramatic changes in its operations.

Aldo was feeling the pressures of declining shopper traffic to bricks-and-mortar stores amid stepped-up digital shopping and the rise of fast-fashion rivals such as Zara of Spain and H&M of Sweden, which were expanding their footwear offerings, as were department stores.

Mr. Frisk, who arrived at Aldo in late 2014 from the U.S.-based company which owned the high-profile Timberland, North Face and Vans brands, moved swiftly to give Aldo a makeover. The retailer focused more than ever on its two key lines – Aldo and its lower-cost Call It Spring – and shed others, while starting to close or relocate about 100 of its roughly 800 North American stores. It expanded online and overseas and bolstered Aldo's wholesale division, shipping footwear to a growing number of large retailers, ranging from e-commerce titan Inc. to Macy's Inc., the largest department-store retailer south of the border, which at the same time threaten to steal away business from Aldo. And Mr. Frisk restructured Aldo's internal organization.

David Bensadoun said the biggest challenge facing Aldo and other retailers is battling the slide in shopper traffic at North American malls. But Aldo is racing to overcome those hurdles by expanding to other markets as well as into wholesaling and e-commerce channels. "We're thankful we have a diversified, multichannel model," he said.

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Mr. Bensadoun said he will focus on boosting Aldo's e-commerce, which currently makes up close to 15 per cent of the retailer's North American business, up from about 10 per cent just a year ago and significantly higher than that proportion at many other Canadian retailers, with a goal of reaching 20 per cent in the next several years. And Aldo will soon relaunch its online-shopping site with an eye to being more mobile-friendly, he said.

Another of his priorities is working to acquire other footwear brands to add to the company's Aldo and Call It Spring lines.

"If we could add a third or fourth brand to the portfolio, that would be a dream come true," said Mr. Bensadoun, who joined Aldo in 1995 as a project manager. "In our dreams we would buy something slightly more premium than Aldo that had great potential to expand internationally."

He said he didn't envision Aldo seeking a very pricey line of goods as a takeover target. "We like democratic fashion."

Over the past several years, Aldo has bet more heavily on just its two major brands – Aldo and Call It Spring – selling, for example, its Little Burgundy chain to Genesco Inc. in late 2015.

Maureen Atkinson, senior partner at retail consultancy J.C. Williams Group, said Aldo's succession planning and early moves to adapt to the fast-shifting retail environment serve as a lesson for other Canadian merchants.

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"They've put a big investment in the online business and they did it early on and continued to invest in it," Ms. Atkinson said.

Aldo also branched out early beyond Canada's borders, understanding that the heavy investment needed to build the business required it to also expand to gain economies of scale, she said.

Now the new CEO will have to navigate difficult retail waters that are increasingly being dominated by Amazon, she added.

Aldo Bensadoun, also known as Mr. B, said in an interview he is passing the torch to his son at a time when the privately held retailer, which is estimated to generate about $2-billion in total annual sales, is on a firm financial footing. He said it is profitable and hit its 2016 targets.

He said he's grateful to Mr. Frisk for spearheading the changes at Aldo, including rolling out new information-technology systems to help the company track its sales more precisely and more analytics-driven consumer research.

"We arrived at our destination a few months sooner than we anticipated with Patrik," he said.

Mr. Frisk acknowledged that usually a corporate overhaul takes longer than it did at the Montreal-based shoe retailer. "Once it's done, it's done and there's no reason to prolong it," said Mr. Frisk. He said he will take some positions on boards of directors and look for other opportunities. He added about his Aldo CEO successor, David Bensadoun: "It's really his time now."

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More


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