The community of Port Washington released a collective sigh of relief with the recent announcement that Allen Edmonds Shoe Corp. will be sold to a private equity firm that is committing to keep the company’s headquarters, its employees, its production and its leadership team intact.
How important is Allen Edmonds to the Ozaukee County city?
“Honestly, I don’t think you could overstate the level of importance as a corporate citizen, a community partner, a community investor. The relationship has never been stronger. The hallmarks to that for me are numerous,” said Port Washington Mayor Tom Mlada. “It was a sigh of relief. Just that concept of looking to the South, if you will…there are supplier pressures, wage pressures from down South and overseas, so it was a sigh of relief.”
For a tense couple of weeks, rumors and speculation that a strategic buyer might be in play to acquire Allen Edmonds ran rampant. The Wall Street Journal reported that Men’s Wearhouse Inc. was pursuing a bid to acquire firm. Some investors speculated that Glendale-based Weyco Group Inc. might also be interested.
Such strategic buyers might not have seen the value in keeping the production of men’s high-end dress shoes in Port Washington and might have been inclined to shift production to a market with lower labor costs.
However, that would have destroyed the “Made in the USA,” handcrafted cache that is the value proposition of the Allen Edmonds brand.
Ultimately, Goldner Hawn Johnson & Morrison of Minneapolis, the private equity firm that purchased Allen Edmonds in 2006, elected to sell the company to an affiliate of Brentwood Associates, a Los Angeles-based private equity firm founded in 1972 with a track record of successful investments in growth-oriented consumer companies.
With the sale, Allen Edmonds will remain an independent private company, according to its president and chief executive officer Paul Grangaard, and will now have greater access to investment capital as a result of a successful ownership transition.
Grangaard and the company’s management team will be retained. Brentwood is committed to keep Allen Edmonds’ production in Port Washington, Grangaard said.
“They (Brentwood) are committed. They are really good people, and they like what we’ve been doing. This will just give us more fuel in the tank,” Grangaard told BizTimes. “It’s going to continue to grow. We opened our third production line here (in Port Washington) this month. It’s very exciting. We are hiring, from distribution to marketing to support functions, we’re going to continue to be a growth company. We’re constantly converting temporary workers into full-time workers. We will be increasing our growth of retail stores. We will have access to plenty of capital to grow.”
The purchase price of the private transaction was not disclosed. The selling company entertained several offers, Grangaard said, before selecting the bid from Brentwood.
Grangaard said Allen Edmonds will keep its 550 employees in Port Washington and will plan to use the cash infusion from Brentwood to expand employment at the plant and expand its retail footprint across the nation. The company has 46 retail stores across the country, with plans to open seven more in 2014 and to open more stores in “international capitols” in 2015, Grangaard said.
“We’re absolutely delighted to partner with Brentwood Associates as we drive the development of this 91-year-old growth company. This smooth transition provides us with the capital needed to continue building the Allen Edmonds brand, broadening our product line and taking our Made in the USA products to new cities around the globe,” Grangaard said.
“There is a level of prestige and pride with that brand. It really is made in Port, and there is a commitment to that. It truly is an affinity for Port Washington,” Mlada said. “We’re extremely grateful.”
Allen Edmonds is coming off of two consecutive record years of sales and is on pace for a third in 2013.
