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The Globe and Mail

How Aldo has put the boots to its rivals for 40 years

Canadians can be an unassertive bunch. They are fearful of foreign takeovers, be it Nexen or Rona. They are inconsolable in the face of Research In Motion's agony. And while the world celebrates the strength of Canadian banks, we dismiss them as greedy.

Yet there is nothing modest about flashy Aldo, the Montreal retailer whose sparse media attention is not reflective of its successes in North America and abroad.

A lot of it has to do with the fact that Aldo is still privately held, 40 years after Aldo Bensadoun, a French immigrant of Moroccan origin, opened his first store on Ste-Catherine St. But some of it comes from an old truth: Good news makes no news.

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With 1,600 stores in 80 countries under four banners (Aldo, Spring, Globo, Little Burgundy), Aldo is on track to reach a record $1.8-billion in sales for its 2013 fiscal year, which ends Jan. 31, up from $1.6-billion last year. And profits are following suit, according to David Bensadoun, president of Aldo global retail and Aldo product services. "Despite the global recession, we are doing well," says the eldest of Aldo Bensadoun's three children, aged 42.

Not only has Aldo conquered the United States, whose cemeteries are full of unsuccessful Canadian franchises (Le Château, Danier Leather, La Senza, etc.), but it has found a way to last in the cutthroat world of retail and fashion. Competition is fiercer than ever as everyone from grocers to clothiers wants a foot in the shoe business. This apparently uneventful resilience is, in fact, an outstanding accomplishment.

It is a business cliché that companies need to have a laser-sharp focus on what they do best, and not get sidetracked by peripheral problems. Yet that fundamental principle often gets lost in fast-growing retailers, notes Jacques Nantel, professor of marketing at HEC Montreal and a retailing expert.

How Aldo renews its collections with fashionable shoes designed in Montreal but sourced in a sophisticated manufacturing network that spans three continents (Asia, Latin-America, Europe) is a fascinating affair.

Every three months, the retailer replaces the 500 pairs of women shoes in its average-sized Aldo stores. After looking at thousands of catwalk and street style images, the design team draws 5000 samples. Then a group of buyers, designers and executives, among which is creative director Douglas Bensadoun, David's younger brother, weed out the models. The task is easy at first, but hairsplitting in the end.

From the sample to the store, it takes just 12 weeks, and for "repeats," a bare six weeks.

"We do a lot of work to stay on top of our game," says Mr. Bendasoun, a tall and sturdy man who is sporting a pair of Italian suede shoes that are part of the higher end men's Mr. B line Aldo is about to launch. In the Ste-Catherine Aldo store near Peel St., he feels the soles of a pair of heels. "Look at the padding, he says. It's expensive, but the girls that grew up wearing Ugg boots and flip-flops won't wear uncomfortable shoes."

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"They are so close to their customers that marketing intelligence research is actually superfluous to them," Mr. Nantel says.

Designing all those samples just to throw them away got Aldo into a new line of business. Two years ago, the company started producing private label shoes for stars such as Madonna and for retailers such as Hudson's Bay Co., Kohl's and J.C. Penney Co. This is now a $115-million-a-year business which David Bensadoun hopes to triple in five years.

"Anybody can produce shoes, but we have the retail expertise: We know what sells, and at what price," he says.

This is the creative thinking that some of Montreal's most innovative entrepreneurs and designers like Guy Laliberté or Denis Gagnon will come to celebrate in a series of conferences to be held next week in Montreal as Aldo turns 40.

As Aldo executives sat down to prepare them, they got their heads out of their samples and started thinking about where Aldo is headed.

"We want to become the Apple of footwear," says David Bensadoun. A shoe retailer so dominant in its stores and its e-commerce it would outshine the Jones Group, Steve Madden, Brown Shoe Corp., the Camuto Group and Deichmann.

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And if they do, maybe Canadians will start shaking some of their complexes.

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