By Laurie Burstein
Footwear company builds on its 130-year legacy in St. Louis with major expansion, new strategies
The next time you slip on a pair of Dr. Scholl's or Naturalizer shoes, or perhaps some high fashion footwear bearing the celebrity names of Carlos Santana or pop
icon Fergie, or pay a visit to your
neighborhood Famous Footwear store, you may not realize they all have one thing in commonÑSt. Louis-based Brown Shoe Company.
There are millions of consumers wearing brands made or sold by Brown Shoe Company today. In fact, through Brown's Famous Footwear, Naturalizer and other retail stores, its e-commerce sites and the brands in its portfolio sold through retail partners, more than 75 million pairs of shoes are sold annually through BrownÕs worldwide operations.
There are millions of consumers wearing brands made or sold by Brown Shoe Company today. In fact, through Brown's Famous Footwear, Naturalizer and other retail stores, its e-commerce sites and the brands in its portfolio sold through retail partners, more than 75 million pairs of shoes are sold annually through Brown's worldwide operations.
Brown Shoe's retail business consists of more than 1,100 Famous Footwear stores in 50 states, along with 300 Naturalizer, F.X. LaSalle, Brown Shoe Closet and Franco Sarto stores in the U.S., Canada and worldwide. Its online footwear site, Shoes.com, offers 450 top brands and powers e-commerce sites for the majority of Brown Shoe brands.
In addition to retail outlets, Brown Shoe's wholesale operations supply brand-name, licensed and private label women's, men's and children's footwear to department stores, mass, independent and online retailers in the U.S., Canada and worldwide. The company has a design studio and showroom in New York, as well as international offices in China, Italy and Brazil.
All this made Brown Shoe a company with $2.4 billion in sales last year.
Recently Brown Shoe Co. made the decision to not only keep St. Louis as its headquarters, but also bring new jobs to the region. According to Clayco, this will include an estimated $600 million expansion.
Chairman and CEO Ron Fromm, who has been with the company for 21 years, says it was always Brown Shoe's preference to stay in St. Louis.
"St. Louis has been our home for 130 years, with the last 56 in Clayton," Fromm says. "Our decision to remain in St. Louis was about bringing talent together, not about real estate or buildings."
Fromm explains that as Madison-based Famous Footwear became Brown Shoe's biggest division, the company had a compelling business need to expand on its success by combining divisions.
"As all the divisions grew, it became apparent Brown needed to build an interconnected platform under one roof to better leverage the knowledge and insights of each on behalf of the entire company," says Fromm.
Brown considered three locations for uniting its operations—St. Louis, Madison and Dallas.
"What really made the difference is that the City of Clayton, St. Louis County and State of Missouri were able to collaborate with our development partners at Clayco and U.S. Equities to create the right solution for Brown Shoe, as well as our employees, customers, shareholders and the community," Fromm relates.
Currently there are 600 employees in Clayton with 55 employees transferring from Madison. In addition, the company has added 200 new employees. Fromm says there will be approximately 900 employees by the time the new headquarters opens in 2010. Brown expects an additional 250 to 400 new jobs over the next several years.
"Our new headquarters in Clayton will give us the ability to create an environment that is very dynamic and collaborative," Fromm says. "So much of our business is consumer-driven, and this gives us the opportunity to bring together a lot of great talent from both the wholesale and retail sides of our business to better serve our customers. It really creates new energy and excitement for us as well as our retailers, vendors and other external partners."
Joe Wood, president of Famous Footwear and Brown Shoe Retail describes the transfer from Wisconsin, "Brown Shoe has gone above and beyond to welcome Famous Footwear and ease the transition for employees who are moving to St. Louis from Madison, Wis. When the announcement was made that Famous Footwear was relocating, over 100 St. Louis employees stepped up to the plate to form an ambassador network to help us get acclimated to the St. Louis area. The company understands that when an employee relocates, the family does as well. As a result, Brown Shoe hosted Madison employees, their spouses and family members in St. Louis over a couple of weekends in May, and introduced them to the community.
"We are confident that Brown Shoe will continue to do everything possible to help us make the transition comfortable for all
concerned. We look forward to being part of the St. Louis community," says Wood.
Diane Sullivan, president and chief operating officer, switches gears to talk about the company's history, international growth, and how the business has changed.
"If we step back and think about it, how many companies have 130 years of bringing great brands to consumers?" Sullivan asks. "There are not many
companies in the U.S. today that have that kind of rich history. Throughout Brown Shoe Company's 130 years, itÕs always been about creating brands that offer
customers innovation in our product development and design."
Brown Shoe Company began connecting with consumers as far back as 1904 when it launched Buster Brown children's footwear at the 1904 World's Fair. It's still part of the brand line-up today.
Another company milestone took place in 1927 when Brown introduced Naturalizer. Sullivan says the success of this brand early on was in being able to deliver a beautiful pair of shoes that comfortably fit a woman's foot. That premise is still relevant today as the brand continues to focus on delivering comfort and style.
Today women in more than 35 countries wear Naturalizer shoes. Over the next few years, plans call for expansion of the brand into 50 countries. Naturalizer's international presence is an example of Brown's global position in the industry. Last year, Brown brought the brand to the Far East and has an opportunity to open up to 400 Naturalizer stores in China and another potential 32 new stores to open in Japan.
Brown's global reach includes growth
in new markets across Asia, Europe, the Middle East and South America. The
company has 13,000 employees worldwide with 600 based in Brown's expanded
facilities in China where new products are designed and manufactured.
Sullivan notes some of the big changes in the industry and in how Brown does business. One aspect that has really changed is the way Brown communicates with consumers she says.
"The speed in which we communicate and deliver shoes to consumers has really changed with the Internet. Our online footwear superstores offer 450 footwear brands and thousands of the latest styles," she comments.
Sullivan adds, "Product development is now a continuous process. We are constantly developing and designing new products to meet the needs of our consumers."
One of the biggest trends in the last five years is the emergence of entertainment and celebrities as part of the footwear business. Brown Shoe counts several celebrities among its brands including Latin music
legend Carlos Santana, country music star Reba McEntire and now Fergie, the popular pop music and fashion celebrity.
"The influence of celebrities and popular culture on consumers is a big part of the fashion footwear business today," Sullivan explains. "We began with Carlos Santana in 2001 which really brought a new and fresh approach by combining music and fashion. It's been an important strategy for really
differentiating ourselves by offering personality-driven footwear designs that connect with consumers in an exciting way," she says.
Sullivan says she wants people to know that Brown Shoe is committed to consumers and brands, as well as St. Louis.
"Brown has a long and rich history of building great brands by understanding
consumers' needs and wants. At the same time, we are committed to St. Louis and to the growth of the region by adding jobs and supporting local civic and charitable organizations," Sullivan says.
As far as short-term outlook, Fromm acknowledges the realities of the current economy. "This is a difficult time and
challenging economy. The good news is
that we are continuing to develop a lot of new opportunities for our customers and
our company."
Fromm outlined some of the strategies for Brown Shoe going forward:
— Continue to build on the success of Famous Footwear, which has grown significantly over the last five years, and has the opportunity to grow up to an additional 500 stores in the next five years.
—Continue to build on NaturalizerÕs global presence, in part through expansion into new countries.
—Build on fashion image brands with Franco Sarto, Via Spiga and Etienne Aigner.
—Create new celebrity brands that bring excitement and freshness to the market.
Fromm gave some closing thoughts about Brown Shoe and where the company is headed. "Brown Shoe has gone through a huge transformation from being one of the world's largest manufacturers to becoming a leading footwear marketer," he says.
On St. Louis he says, "St. Louis is the home and heritage of Brown Shoe. We are a public corporation, but in some ways still a family business that started in St. Louis. St. Louis is just a vibrant community with a rich, diverse culture and we're thrilled to be a part of everything it has to offer."
Fromm closed by saying, "As we watch our company grow and transform from a manufacturer to a marketer, our future is about continuing to deliver great brands consumers love."
| Brown Shoe Co. Puts Best Foot Forward With Charitable Giving |
Since 1878, Brown Shoe's founder George Warren Brown, had a strong commitment to the St. Louis community and was a noted philanthropist. When he died in 1921, he gave away half of his money to organizations like the YMCA, universities and colleges, orphanages, missions and homes for the elderly.
Brown Shoe's tradition of corporate giving continues today.
"Brown has a terrific heritage of being a good corporate citizen, " Fromm says. "We really want to continue that tradition during our expansion. We will certainly continue to support the community and the great organizations that we have historically partnered with, like the March of Dimes, the United Way and the St. Louis Public Schools," he says.
"In addition, it is important for us to continue to support many of the organizations we work with in Madison during this transition. We have committed to maintain our charitable commitments in Madison for at least three years," Fromm adds.
Today, contributions to charitable organizations by Brown Shoe, its divisions, subsidiaries, employees and customers through in-store programs, exceed $2.5 million. Most of the funds go toward education, the arts, civic institutions and programs where the company has stores and offices.
These are some of the main charities and organizations Brown Shoe supports:
The March of Dimes
Brown Shoe supports the March of Dimes on both a local and national level and raised $1.4 million for the March of Dimes Prematurity Campaign. Through Famous Footwear, the company and its employees participate in more than 1,110 March for Babies walk events nationwide.
FFANY/Breast Cancer
Brown Shoe partners with the Fashion Footwear Association of New York (FFANY) for the 13th annual Shoes on Sale event during Breast Cancer Awareness Month. Brown donated shoes that were sold on QVC with net proceeds going towards breast cancer research and educational programs.
Jackie Robinson Foundation
For the past three years, Brown Shoe has supported the Jackie Robinson Foundation by funding scholarships and professional development for students.
Mathews Dickey
Brown Shoe supports the Mathews Dickey Boys & Girls Club and is sponsoring this year's annual banquet which raises funds for computer training and career development.
St. Louis Public Schools
For four years in a row, Brown Shoe has participated in the St. Louis Public Schools' Back to School Family Fun Festival by donating and fitting children with thousands of pairs of new shoes. |
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