Business Model

Cia. Hering, the largest retail franchises network in Brazil, with more than 135 years of history, has a distinctive business model, characterized by brand management, manufacturing and retail management.

Brand Management

The Company's portfolio consists of 04 strong brands with distinct positioning:

Hering

Democratic brand, aimed at the male and female public, presents an authentic, casual, relaxed and comfortable style, being widely accepted by all age groups and social classes;

Hering Kids

Focused on children of all social classes, is known for its comfort and quality. It offers products that combine style and well-being, allowing the child to live a full and healthy childhood;

PUC

With the proposal to offer a differentiated, colorful and cheerful fashion for children of classes A and B, presents an offer of high-quality products for special occasions; and

DZARM

A brand that follows the contemporary urban rhythm of the woman who has no time to lose. It operates through a multichannel platform with a complete and versatile portfolio for all occasions, translating the latest trends of a cosmopolitan lifestyle, with great value for money, convenience, and fashion information. The DZARM woman has between 25 and 34 years old and belongs to classes A and B.

 

Value Proposition

A CASUAL LOOK, THAT DEEPLY UNDERSTANDS ITS CONSUMERS AND OFFERS PRODUCTS AND SERVICES WITH DISTINGUISHED QUALITY AND COMFORT, BRINGING ACCESSIBILITY OF VALUE AND EASE OF PURCHASE.

Production

The hybrid production model is one of the Cia. Hering’s differentials and is characterized by the combination of own production, hird-parties manufacturing and outsourcing ('purchase of finished product') in the internal and external market, ensuring flexibility and speed to meet market demand. This model allows to search for the best option among in-house manufacturing, outsourcing certain stages of the manufacturing process or purchasing finished goods - ‘make or buy’ policy. On average, 80% of the items are produced by the Company and the remaining 20% are bought as finished goods.

Cia. Hering has three industrial parks located in the states of Santa Catarina, Goiás, and Rio Grande do Norte. The plants contemplate all production stages: Knitting, Processing, Cutting, Sewing, Finishing and Packaging. Some steps in the manufacturing process can be carried out by third parties, especially the manufacturing/sewing, so-called 'factions' - widely used in industry.

Manufacturing activities apply state-of-the-art technology, allowing the expedited delivery of substantial volume of products with quality. The use of this technology offers greater production efficiency, minimizing waste of raw material and allowing a better cost control. To preserve such technology, investments are made both in the manufacturing plants and in the acquisition of equipment and structure updating, as well as in training and improvement of employees.

Retail Management

Cia. Hering has two distribution centers located in Blumenau - Santa Catarina and Anápolis - Goiás. From these centers, it is possible to serve all the owned and franchised stores, multibrand retail customers and webstores. Logistics systems are totally integrated with distribution, sales, production and third-party purchases channels. It is possible to determine the quantity and frequency of distributions based on point of sale demand, inventory levels, product characteristics and points of sale location. The distribution centers receive finished products from the manufacturing units and from third-parties already packed and tagged with appropriate bar codes. When delivered to road transport, the products are divided in accordance with a previously planned route, reducing delivery times and transport costs.

Cia. Hering adopts a multichannel distribution model with high capillarity, through Franchises, Own Stores, Multibrand and Webstores. The store channel accounts for approximately 50.0% of sales, of which ~ 15% operated by the Company and ~ 35% managed by franchisees. In addition, the Company has more than 10,000 multibrand retail customers, which account for about 47% of the sales and the webstores of the Hering, Hering Kids, PUC, DZARM, and Espaço Hering brands, which together account for 3% of sales.

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