Shoe Biz

Brown Shoe Company celebrates a century on the NYSE and looks ahead to its next 100 years.

 

 

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Via Spiga Elizabetha

BOLD BUSINESS MOVES and big brands have secured Brown Shoe Company a coveted spot in the world of footwear. A vast 136-year history with countless milestones and accomplishments‰ÛÓincluding the recent celeb-packed celebration of its 100 years on the New York Stock Exchange‰ÛÓmarks a huge turning point for the multi-billion dollar enterprise, whose growing contemporary fashion brands (Vince, Via Spiga, Franco Sarto and more) and sizable retail presence (including Famous Footwear and Shoes.com) are expected to take the company to new heights in its next 100 years. This past year alone has proved to be monumental for the St. Louis-based empire. CEO, President and Chairman of the Board Diane Sullivan was honored with the prestigious ACE Award for Business Visionary by the industry-respected Accessories Council‰ÛÓjoining the ranks of high-profile fashion influencers like Iman, Warby Parker, Nordstrom and Vogue Europe Editor-at-Large Hamish Bowles. The award is at the pinnacle of Brown Shoe’s success. Since 2011, the company has doubled its earnings (reporting a 45 percent increase in stock price just last year), and its multitude of brands‰ÛÓincluding the booming lifestyle line of Sam Edelman‰ÛÓare at the top of their game. It’s fitting that this year also marks Brown Shoe’s 100 years on the New York Stock Exchange. After all, it’s the 24th oldest public company in the country to have reached the honor, joined by the likes of massive corporations including Johnson & Johnson, Coca-Cola and Wells Fargo. The company went all out to mark the milestone, taking the chance to ring the closing bell at the NYSE on April 23 and holding an A-list after-party featuring entertainment by Jennifer Hudson and a star-studded guest list that included Fergie, Estelle, Kenneth Cole and Derek Blasberg, among others, at the recently unveiled 4 World Trade Center. The gravity of the achievement isn’t lost on Sullivan, who sees the milestone as the jumping-off point of what will undoubtedly be an eventful next 100 years. “Our company is filled with passion and drive, and I’ve never been more excited about our future as I am right now, tonight,” Sullivan said during her celebratory speech in NYC. “We’ve been on a mission to transform Brown Shoe from a company you’ve never heard of to one you won’t forget. And it’s our unrelenting focus on our consumers, our brands, the belief in our people, our values‰ÛÓand you‰ÛÓthat will help make it happen.”

The fact that each brand has its own distinct design lead and a team to facilitate trend forecasting, product development and execution has proven to be a winning formula for Brown Shoe. “We don’t just make shoes; we develop brands that are competitive and fashion forward in the national market,” Sullivan explains. “Our motto is also our number one policy: ‰Û÷Inspiring people to feel good and live better feet first.'”

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Brown Shoe Company’s booth at the 1904 World’s Fair in St. Louis

Today, Sullivan continues to lead the charge of innovation. A major focus for the CEO and her team has been to encourage Brown Shoe to “step out of the footwear space,” and lead its transformation into a highly competitive global brand. “We are nice,” says Sullivan, when referring to the company’s strong Midwestern roots and sensibilities. “But that doesn’t mean we aren’t competitive.”

Growing Contemporary

Although Brown Shoe has made great strides in the contemporary sector with its growing list of brands and celebrity collaborations, Sullivan believes there’s more work to be done when it comes to the visibility of the company as a contemporary fashion source. “There are still people out there who don’t know who we are and what we’re capable of, but people are starting to really realize the impact we’re having on the contemporary fashion market,” she says.

There’s no doubt Brown Shoe has unlocked the secret to turning celebrity collaborations into money-generating brands. Take Fergie, for example. The Grammy-winning pop princess began developing not one, but two lines‰ÛÓFergie Footwear and Fergalicious by Fergie‰ÛÓand, in her six-year partnership with Brown Shoe, she remains one of the company’s highest performing contemporary brands. The same goes for Carlos Santana, who combines up-to-the-minute trends to create hip footwear inspired by the energy and passion of his music.

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CEO Diane Sullivan on the red carpet before the ACE Awards in New York, 2013.

“We test things, we put ourselves out there‰Û_ our past has given us the confidence and reputation in the industry of being a reliable company,” Ausick says. “Now it’s about doing our part to keep the company moving in a positive direction.”

Being headquartered in the same city for well over a century has also granted Brown Shoe the ability to change with the consumer. “We aren’t short-termers and we don’t make decisions based on short-term solutions,” explains Michael Oberlander, senior vice president, general counsel and corporate secretary. “But that doesn’t mean we’re not quick and agile when it comes to developing up-to-the-minute trends.”

From the rapid growth of the American industry in the late 1900s, through the Great Depression, World Wars and the tech boom, Brown Shoe has weathered the ups and downs, holding tight to its core principles of respect and integrity, while pushing the boundaries of what it means to be in the shoe business. The company was among the first to harness the power of major national advertising campaigns with its series of creative ads that ran in major publications, including Vogue, Life, Sports Illustrated and Seventeen in the mid-1950s. Fast forward to the ’70s and Brown Shoe was pushing the boundaries again, restructuring the corporation to become Brown Group Inc., to better position the company to compete in the then rapidly growing and changing shoe industry.

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Brown Shoe Company’s booth at the 1904 World’s Fair in St. Louis

Today, Sullivan continues to lead the charge of innovation. A major focus for the CEO and her team has been to encourage Brown Shoe to “step out of the footwear space,” and lead its transformation into a highly competitive global brand. “We are nice,” says Sullivan, when referring to the company’s strong Midwestern roots and sensibilities. “But that doesn’t mean we aren’t competitive.”

Growing Contemporary

Although Brown Shoe has made great strides in the contemporary sector with its growing list of brands and celebrity collaborations, Sullivan believes there’s more work to be done when it comes to the visibility of the company as a contemporary fashion source. “There are still people out there who don’t know who we are and what we’re capable of, but people are starting to really realize the impact we’re having on the contemporary fashion market,” she says.

There’s no doubt Brown Shoe has unlocked the secret to turning celebrity collaborations into money-generating brands. Take Fergie, for example. The Grammy-winning pop princess began developing not one, but two lines‰ÛÓFergie Footwear and Fergalicious by Fergie‰ÛÓand, in her six-year partnership with Brown Shoe, she remains one of the company’s highest performing contemporary brands. The same goes for Carlos Santana, who combines up-to-the-minute trends to create hip footwear inspired by the energy and passion of his music.

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Brown Shoe’s former Connie line, circa 1960s.

To develop his soon-to-be-introduced clothing line, a first for Brown Shoe, Edelman and Sullivan found a partner in another native St. Louis fashion business, Kellwood Company, a manufacturer and marketer of a broad range of brands including XOXO and Rebecca Taylor. Kellwood is set to produce the Sam Edelman contemporary collection that will launch this fall, with women’s, juniors’ and girls’ apparel in a similar design aesthetic to the brand’s already well-established footwear. “We really believe that Sam Edelman can become a global lifestyle brand,” Sullivan says. “It has a huge crossover appeal amongst various age groups of women and is known for trend-driven fashion.”

For 2014 and beyond, there’s much in the works with Brown Shoe’s additional in-house designed contemporary brands, Franco Sarto, Vince and Via Spiga. The company has brought on a new designer to act as Via Spiga’s creative lead, luxury footwear expert Paul Andrew, whose first collection will hit stores this fall. Meanwhile, Franco Sarto is coming off its highest sales year to date. John Schmidt, division president of contemporary fashion, sings the praises of the transition of the Franco Sarto brand from a traditional, classic aesthetic to a more modern, feminine competitor in Brown Shoe’s portfolio. “[Franco Sarto has] maintained the authenticity, fit and quality that has made the brand so loved by consumers‰Û_culminating in the brand reaching a record high for 2013,” he says.

Sam Edelman is also set to perform at record highs in 2014, and a move into men’s footwear with Vince is a strong possibility on the horizon. “It’s all about execution,” says Sullivan. “Searching for and developing new and existing talent and continuing to make modern and relevant changes and developments in our brands while continuing to evolve within the national market.”

Ausick, a 14-year veteran of the company, agrees and sees Brown’s current initiatives as the modern progression of what the company has been about all along. “When other companies were focusing on fads, we saw an opportunity in women’s fashion, family and healthy living,” he says. “Our history gives us the confidence to keep pushing forward, developing new brands‰ÛÓwe expect to be here for the next 100 years.”

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Naturalizer’s “A Perfect Fitting Shoe” advertisement, 1944.

“In terms of being the go-to place for both footwear and people that have the know-how and confidence to develop successful brands‰ÛÓ we are the first call that people, including celebrities, will make if they are interested in footwear,” Sullivan says.

A celebrity in his own right, Sam Edelman has also launched Brown Shoe to new heights with his namesake brand. Described as the biggest growth opportunity for the company by several top-level executives, the powerhouse brand encompasses a huge portion of the company’s contemporary fashion arena. Already a fashion industry veteran when he created the brand in 2004, the designer credits Brown Shoe‰ÛÓwhich purchased Edelman Shoe Inc. in 2010‰ÛÓfor taking his company to the next level. “Brown Shoe acquired Sam Edelman when we were a much smaller brand,” Edelman says. “With their help in areas such as sourcing, IT and finances, we have been able to develop creatively to become one of the most influential companies in womenswear.”

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Brown Shoe’s popular Sam Edelman brand family is predicted to be one of the company’s largest areas of growth.

The fact that each brand has its own distinct design lead and a team to facilitate trend forecasting, product development and execution has proven to be a winning formula for Brown Shoe. “We don’t just make shoes; we develop brands that are competitive and fashion forward in the national market,” Sullivan explains. “Our motto is also our number one policy: ‰Û÷Inspiring people to feel good and live better feet first.'”

The reallignment of its portfolio in 2011, initiated by Sullivan, has been a game changer as well, setting the stage for the bold business moves that have defined the current era of Brown Shoe. In the last year alone, the company acquired high-performing fashion brand, Franco Sarto, for $65 million; it announced plans to develop a Sam Edelman clothing and accessories line and ecommerce site; and it orchestrated a collaboration with HGTV’s “Color Splash” host David Bromstad for a new Naturalizer line. The ventures could extend into several of its other contemporary brands in the future, including Fergie Footwear, Sullivan says. Although the contemporary sector currently makes up a relatively small portion of Brown Shoe’s portfolio, it is expected to be a key area of growth moving forward. “We think in the next three years it will represent 20 to 25 percent of our business, which is substantial,” Sullivan explains.

In the retail sector, the past few years have brought on a major shift in focus within Famous Footwear, a sector of the company that accounts for 63 percent of Brown Shoe’s revenue. Sullivan points out that simply opening more stores isn’t enough for retailers to stay competitive. “We are looking at the way our Famous Footwear customer is shopping and how much they are shopping online. It’s all about omni-channel marketing, knowing your customer and factoring in how and why they shop,” she says.

 

Photo credit: Courtesy of Brown Shoe Company

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