Les cahiers de Intima - Milavitsa - (Page 8)

Focus on Milavitsa Striving for Success From the former state-owned garment manufacturer during the Soviet period, to the present days’ competitive private firm, Milavitsa Chairman Dmitry Ditchkovsky, draws a picture of a leading company capable of attaining ambitious targets and determined to reach new heights. Mr. Ditchkovsky, Milavitsa had to undergo major structural changes to go from a stateowned status, during the communist period, to the privately-owned company it is today. What has been the most challenging part of it? Well, at the time, just about everything was quite a challenge! Remember there were still vouchers for buying in state outlets when in 1990 Milavitsa started its privatization process. Actually, it was one of the first companies to be privatized in Belarus. After the Soviet Union disintegration, any company oriented towards sales in the former USSR-republics had huge problems with raw materials coming from European countries because of numerous difficulties in foreign currency exchange. There was a collapse of established sales channels in other republics because of breakdown of commercial links within the former Soviet Union. As a result the volumes dropped down and the workload suffered terribly. At that time the company managed to secure itself by assertively entering new markets, particularly in Russia and offering CMT services for western brands. These initiatives prevented the company from substantial downsizing and personnel lay-off, which actually happened to the majority of Belarussian companies in the early 90s. Looking back, I would say the company has inherited from its past history some kind of internal drive and passion to be N° 1 and it is this very peculiar characteristic that, in different situations, made things happen. With the same commitment to always improve and go further, we were the first company in the country to obtain ISO certification, in 1996, very much in advance on the general consideration of that recent standard. In 1998 the Russian default crisis came and severely hit Milavitsa’s main market forcing the company to make substantial efforts to go through this new challenge, but they made it. This same strive led the EBRD to make its first investment in Belarus and acquire substantial share in Milavitsa’s capital in 2001. It was certainly the determination of a woman, Zinaida Valekha, who managed the company from 1991 to 2002, associated to a company culture devoted to continuous improvement which allowed Milavitsa to succeed in its privatization and all other new initiatives in such a short time. It is now up to us to take it to new heights. You joined the company in June 2002, what were the major challenges you had to face? In 2002 the company was in a difficult situation with stagnant sales. Despite this, we knew the potential was there to double our sales in five years, which we actually did in three. My challenge was to redefine the value chain and reorganize the company in order to switch from a productionoriented garment manufacturer into a modern market-oriented brand. We rapidly set up two separate equal-weight divisions – marketing & sales and production - to better combine production efficiency with market demand. With the arrival of Sergei Kusonski the strategic marketing unit gained momentum; clear goal and corresponding incentives with open and creative thinking did have a quite immediate impact on the workflow, and best practices were applied to logistics, production planning, order collecting, etc. We also focused on product portfolio, brand development and customer loyalty. At the same time, a serious amount of time and efforts was allocated to build a new solid business relationship with our trading partners based on mutual trust and engagement, product availability and more flexible outbound logistics. Nine months later all these efforts brought our first results in terms of orders and from 2003 our sales started growing by 15 to 20% per year in quantity and value. First sizeable results brought confidence and raised employees commitment and satisfaction. The organization climate changed within the entire company. We were on a good path… Why and when did you decide to open direct stores? The first store was opened back in 1992 in Minsk. Today it is our flagship store that we use for training purposes and demonstration of the Milavitsa retail concept business model. From the very beginning we understood we would not be able to compete on prices with imported goods and we decided to bring dynamics and new dimension into Milavitsa stores openings. To do this, in cooperation with investment banks, we set up Silvano Fashion Group in Estonia and rose €10 M for retail development in Russia, our largest market with the highest potential. THE MILAVITSA MUSEUM 6

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Les cahiers de Intima - Milavitsa