Made in America: Allen Edmonds
Five years after the Great Recession began, Allen Edmonds is a “shoe-in” to hit sales records for a third year in a row by bringing Made in America to the world.
If you want to understand where Allen Edmonds has been — and where it’s going — there’s arguably no better person in the world to talk to than Jean Roehr.
Roehr, who has been with the company since 1971, isn’t the CEO. In fact, she doesn’t even work in the same building as the executives. Roehr is the lead international shipping clerk at the Allen Edmonds Bywater distribution center in Port Washington, Wis. From her workstation just a few steps from the company’s four main loading docks, she’s at the vortex of the U.S.-owned shoe manufacturer’s aggressive expansion into international markets.
“This entire building wasn’t even here a year ago,” Roehr says, gesturing to a meticulously organized warehouse the size of a jumbo aircraft hangar. Tightly packed pallets twice as tall as the men who will wear the shoes they hold await pickup by semi. “Now they’re saying they might knock out the back wall so we can grow again.”
Roehr’s supervisor, Randy Wojcik, and his team assembled 14 miles of shelving and moved 54,000 pairs of shoes to create this new facility just last March. Oh, by the way, they did it in a single weekend. And you thought organizing your closet was hard work?
Roehr barely pauses to speak as she quickly applies shipping labels to the boxes in front of her. Three of the four pairs are high-end cordovan dress shoes bound for Shanghai, where Allen Edmonds just opened its first retail store to excited shoppers. The company plans to open three retail stores in China by the end of the year. It’s a part of the world where Made in America brands like Allen Edmonds, Red Wing and Woolrich are red-hot.
Roehr is already training in another clerk to help share the international workload — one of 24 jobs the company has created in distribution alone since 2008.
“I can tell you this,” Roehr says, “Allen Edmonds is here to grow.”
Grand brand reborn
The first thing you notice when you walk into Allen Edmonds’ distribution facility is that it has the same scent as any one of its 46 global retail locations. It’s the perfect mix of high-grade leathers, like cordovan and calfskin; shoe creams and polishes; horsehair brushes; and a hint of Harris Tweed. It’s the smell of elegance, of history, of things you have to earn over time. If the most valuable things your father taught you about life could have a scent — value, trust, respect — this would be it.
As you take a deep breath while looking at the towers of shoe boxes stretching as far as the eye can see, it’s hard to imagine that just a few years ago this company’s balance sheet was upside down. In 2008, it was buried in a mountain of debt. Company leadership was eager to reinvigorate its product line with classic designs in new colors and textures, and determined to reignite demand from both its traditional customer and a newer, younger target. Then the Great Recession hit.
“Honestly, it came down to a show of hands in the boardroom,” says the company’s CFO Jay Schauer.
A life preserver came in the form of a capital injection from Goldner Hawn, a Minneapolis-based private equity firm, which at the time included a managing director named Paul Grangaard. Clearly Grangaard saw something special in the shoe company: He soon resigned from Goldner Hawn to assume the role of Allen Edmonds’ new CEO and right the ship. From the factory floor to the executive offices, Grangaard and his management team are uniformly respected and credited with saving the company.
Grangaard immediately put the new capital to use, repositioning the company for the economic turnaround. Key to this plan: 1.) recommitting the company to its “core classics” while expanding into modern styles, 2.) more apparel and accessories, 3.) an aggressive retail presence under an expanded footprint of Allen Edmonds–branded stores, and 4) repositioning Allen Edmonds as a great American manufacturer. The goal: get the attention of a younger demographic, and take more control over marketing and the point-of-sale experience.
Timing couldn’t have been better. As the world climbed back from its brush with economic ruin, job-seeking men needed to upgrade their wardrobe. At the same time, younger men began dressing up again and, in many cases, spending more than ever before. Suddenly, Allen Edmonds shoes, which range in price from $175 to $695, were right in male shoppers’ crosshairs.
Red vest recruits
A visit to the Allen Edmonds Port Washington factory shows just how right Grangaard’s instincts were. The facility echoes with nearly relentless noise and activity. Leather is carefully inspected and trimmed. Leather uppers are fastened to lasts. Using powerful machinery, craftsmen attach Allen Edmonds’ famous cork foot bed to each shoe, one at a time. Buffing wheels spin.
Production Manager Bob Steffes, a 13-year company veteran, points out the workers in red vests. The vests signify new hires: apprentices with fewer than 90 days on the job. Today there are 42 on the floor, each getting a hands-on education in making some of the finest men’s shoes in the world. Their teachers are craftsmen who in many cases have been with Allen Edmonds for decades. Workers here receive strong pay, health benefits and a 401(k).
Grangaard may have added new styles to the Allen Edmonds arsenal and changed its retail strategy, but virtually nothing has changed about the way the shoes are made. Steffes and his teams still craft more than 90 percent of them in Wisconsin, using a painstaking 212-step process. And today they’re making more shoes than ever.
“In ’09, we were making about 900 pairs per day,” Steffes says. “Today it’s about 2,300 pairs per day. We’re working overtime about two out of every three Fridays to keep up with demand.”
“Everyone takes pride in quality,” says Linda Newkirk. She should know: She’s quality team lead for the factory and a 22-year company veteran. She also knows she’s part of a company on the rise.
“I convinced my husband to give up truck driving to work here,” she says, laughing. “And he’s glad he did! They take great care of us.”
Newkirk does admit there is one downside to working at Allen Edmonds. “I find myself looking at men’s feet all the time thinking: ‘You should be wearing better shoes!’”
While the secret sauce in the rebirth of Allen Edmonds has undoubtedly been smart style and even smarter retailing, a key ingredient in that sauce has been shipping and logistics. It’s been critical to keeping up with the new demand.
“With our more aggressive growth strategy, we needed a more aggressive shipping strategy,” says Terry Howell, Allen Edmonds’ supply chain manager, who today is wearing a shiny pair of bourbon McAllisters. “Last year we shipped 2,000 packages on our busiest day. Last week we shipped more than 3,500 packages in a day, and I know we’ll break that record again before the year ends.” Online sales via www.allenedmonds.com are a huge driver, with e-commerce growing at 60 percent year-over-year, according to Howell.
In 2012, Allen Edmonds turned to FedEx and asked the company what it could do to streamline the Allen Edmonds supply chain. Enter FedEx District Sales Manager John Whittington and an entire team of FedEx logistics and automation experts. The solution they delivered to Allen Edmonds tapped virtually every service FedEx offers its customers.
On the inbound side, the world’s finest leathers and other components arrive from multiple ports around the world — Germany, Italy and India, to name just three — via FedEx Trade Networks. And then a key, two-times-per-week inbound shipment of materials arrives from the Dominican Republic via FedEx Express® Caribbean Transportation Solutions and FedEx Priority Overnight® Air Freight — delivered two full business days faster than the previous logistics network offered. These skids are critical for manufacturing operations, and FedEx has done nothing short of convert time into money for Allen Edmonds.
“With our prior carrier, there was a set shipping schedule, and we had to organize our production facility around it,” says Dave Barber, vice president of Systems and Technology at Allen Edmonds. “What’s nice about FedEx is they created a shipping program to meet our schedule.”
“If Allen Edmonds can source a raw material anywhere in the world, we can get it to Port Washington in two to three days,” Whittington says.
On the outbound side, Allen Edmonds now relies on FedEx Ground for weekly merchandise deliveries to its 46 retail locations. And for its exploding e-commerce business, it uses FedEx Home Delivery® and FedEx Express — the latter popular with Allen Edmonds’ more demanding customers, who frequently want their dress shoes by the next morning.
“[E-commerce integration] was fairly easy, thanks in large part to how much FedEx helped us,” Barber says.
Where to next?
There is a consistent message coming out of Allen Edmonds: We will always be a shoe company first, and we will always stay true to men.
As Schauer says, “Allen Edmonds is always going to be a men’s lifestyle brand driven from the foot up.”
At the same time, there’s undeniable excitement over the brand’s increasing diversification into accessories and apparel.
Schauer proudly notes that belt sales alone are up 40 percent. As men are drawn to Allen Edmonds for fantastic shoes, they’re increasingly exploring what else the brand has to offer. Today, that includes not just belts, but also herringbone sport coats, wool scarves, briefcases and even leather iPhone covers. As much as possible, these items are all sourced and manufactured in the U.S.
The future of Allen Edmonds, in other words, appears to be as bright as the shine on a new pair of calfskin Park Avenues.
“The brand is hot,” Schauer says. “Men are dressing better. They’re wearing brown shoes instead of beat-up tennis shoes. The grunge look is out. We are really well positioned to capitalize on how men are thinking about themselves today.”