Streamlined Logistics with Allen Edmonds

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?

Changing Business, Changing Logistics

Omar Collazo performs one of the 212 steps that go into an Allen Edmonds shoe.

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.

Logistics optimization is business opportunity

Sales rep Vincenzo Vitale fits a customer in one of Allen Edmonds’ 46 global retail locations.

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!’”

Global reach

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.”

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COMMENTS

  1. Jon - January 24, 2014

    How can you talk so much about "made in America" when you manufacture so many of your styles in the Dominican Republic? What a joke!

    Reply »
    • Paul Grangaard - January 27, 2014

      Hi Jon – Thanks for the chance to address this question.

      Less than 2% of the shoes purchased in the U.S. are made in U.S. manufacturing plants. Allen Edmonds is one of the last remaining U.S. shoe manufacturers. We make 90% of our shoes in our plants on the shores of Lake Michigan in Port Washington, Wisconsin. Our employment in the U.S. since 2010 has grown over 50%, by over 250 people, and we employ about 700 people now in our country(and still counting). Sales hit a new record for the company in 2011 and we grew 20% per year in 2011, 2012 and 2013.

      All of our shoes made in the U.S. are made of two sewn-on-sole constructions. They're high value shoes made of high end leathers in multi-step handcrafted methods that can support higher pricing. About 80% of our sales are made in the 212-step Goodyear welted handcrafted process for which we're overwhelmingly known, and the rest are American handsewns that have the sole sewn through the bottom of the shoe (our bestselling Maxfield style is made this second way).

      During the darkest days of the Great Recession, I became frustrated by the poor sales of our uncompetitively priced boat shoes and driving moccasins, and by the huge majority of the shoe industry that's dominated by cemented rubber sole construction, a construction method in which we had no expertise, experience, capital equipment or product offerings. We were forfeiting the dominant part of the men's shoe industry by being either too costly in boat shoes and drivers, and completely absent from the cemented bottom market — and I really hated forfeits when I played sports as a kid.

      So, we started making a few styles in the Dominican Republic. There's a strong base of cemented-sole and boat shoe manufacturing down there we were able to tap into. We're careful to use a sub-brand — "ae by Allen Edmonds" and "Jack Nicklaus Signature Golf by Allen Edmonds" — for our DR-made styles. If it says only "Allen Edmonds" in the heel, its one of the 90% we make in Wisconsin.

      Having 10% of our sales in DR-made shoes helps us grow our store base, our non-production employment (such as the new distribution center highlighted in the article above) and it allowed us to enter the golf market with a fighting chance against all the China-made shoes. I can assure you that building U.S. employment is a big part of what motivates our leadership team every day. I remember welcoming a new side-laster to our Goodyear welt Blue Production Line a while ago. He had been unemployed for a couple of years, making ends come closer together (but not meet) through unemployment insurance and landscaping jobs. As I thanked him for joining our team, he thanked me for the job and said, "This job is the difference between my daughter going to college and not going to college." Making that kind of difference in people's lives is the best part of our recent success.

      Best wishes,
      Paul

      Reply »
  2. Brad Schrader - January 25, 2014

    Just a simple thank you for producing such a fine product . I am all about wearing the Shelton cordovan . I would not think of wearing any other business shoe . Most comfortable business shoe I have ever worn.

    Reply »
    • Paul Grangaard - January 27, 2014

      Thanks Brad! We appreciate your support!

      Best wishes,
      Paul

      Reply »
  3. Ron Jarvis - January 27, 2014

    I've just discovered Allen Edmonds and I'm a fan for life. Incredibly comfortable and well-made shoes. Proud to support a company that supports American manufacturing.

    Reply »
  4. Joe Roesmann - January 30, 2014

    Have been a satisfied customer for over 30 years. In that time I have purchased 4 pairs of shoes..which your recrafting department has kept in good " as new" condition . I have always been treated like I was the only customer Allen Edmonds has.

    Reply »
  5. Cynthia Hugghins - January 30, 2014

    Paul,
    How can I find out about becoming a supplier to Allen Edmonds?

    Thanks!

    Reply »
  6. Francis Pendergrass - January 30, 2014

    I don`t shop for shoes that often, but when I do I buy Allen Edmonds. They are great shoes. I work for FedEx and I understand being proud of your product and thank for giving FedEx the opportunity to service you.

    Francis

    Reply »
  7. George Hall - January 31, 2014

    Allen Edmonds shoes are a great product and best of all American made!!!

    Reply »
  8. Patricia Boyd - January 31, 2014

    I applaud Allen Edmonds for manufacturing a fine product in America…Thank you!!! I yearn to purchase a well made woman's shoe made in America…

    Reply »
  9. alan herbers - January 31, 2014

    Allen Edmonds ROCKS! For many years I have searched for a quality, stylish shoe rather than one that for which I had to settle. My shoe size is 11.5 B and it is EXTREMELY difficult to find a reasonably priced, comfortable shoe. The fact the shoes are made in the USA is even better as I am trying to buy more "American-Made" products.
    I will continue to purchase your shoes as my budget allows. Knowing that you are a FedEx customer is icing on the cake. Thank you for your business!
    Sincerely,
    Alan

    Reply »
  10. Julie Martin - February 3, 2014

    I hope you consider branching out to the female market in the near future! We like quality shoes too!

    Reply »
  11. eyob sahle - February 4, 2014

    I'm glad you are reborn. However, i have the smallest feet in the whole world so, i'm not fortunate to wear your beautiful shoes. Do you think you can solve my problem by making size 6 shoes?

    Reply »
  12. Pat Tobin - February 4, 2014

    Still a satisified customer! Mine are 30 years old and STILL going strong. I had a "cat's paw" sole added to slow the wear but other than that they still fit great!

    Reply »
  13. Mike Hendershott - February 5, 2014

    I've had a pair of Allen Edmonds dress shoes for about ten years. They fit and
    feel good, and still look great. I'd like to get another pair in the casual
    look shown here. For those customers in Denver, there's a store at the Cherry
    Creek mall that has been there for many years, and they carry a lot of other
    Allen Edmonds high-quality products. Mike H.

    Reply »
  14. Melanie Townsend - February 6, 2014

    "If the most valuable things your father taught you about life could have a scent — value, trust, respect — this would be it." That's some great imagery, you should use that in your advertising. I'd never heard of this company before, but I love that it's a fine lifestyle brand, American made, and a FedEx customer. I will be purchasing a pair for my husband soon. I also agree that you guys should consider branching into fine women's wear. Much continued success!

    Reply »
  15. Hugh F Hughes - February 6, 2014

    I've been a customer for years as well…. I recently purchase a pair of AE shoes and within two months the sole separated. I sent the shoes to the AE recrafting department only to be told I bought the wrong size. Funny thing is these are the same size AE's I have bought for the last 15 years, in many different styles. In case anyone is wondering my weight has not changed by 10lbs in all that time. Made in America, has always meant something to me as well…..
    Still love your shoes…..

    Reply »
  16. Michael C - March 14, 2014

    I have been a fan for many years, and have been pleased with the EEE wide-widths that have been available. Once I
    retrieved a pair that had been inadvertently donated over the holidays! "Sorry folks!" – I gave a cash contribution in lieu of the shoes, and took them home! I am proud that Wisconsin is my new home, and that it also home to Allen Edmonds.

    Reply »

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