Survival of the fittest

Paul Grangaard

President and CEO

Allen Edmonds Shoe Corp.

201 East Seven Hills Road, Port Washington

www.allenedmonds.com

The economic downturn took a heavy toll on Port Washington-based Allen Edmonds Shoe Corp., a high-end men’s footwear manufacturer. Allen Edmonds was able to survive the downturn and rebound significantly by listening to its customers and focusing on what made the company successful, said Paul Grangaard, president and chief executive officer of the firm.

“The crash of 2008 was the latest in a long stretch of increasing pressures for Allen Edmonds. More than 98 percent of the shoes sold in the USA are manufactured offshore, mostly in low-wage countries, so cost competition is intense. And for 20 years, fashion trends have gone toward business casual dress and Italian styling, dampening demand for our traditional product line.

“When the crisis hit, men pulled back substantially on purchases as they worried about the impact on their jobs, families and savings.

“We were forced to reduce staff by 8 percent late that year. However, we kept more master craftspeople than our business justified, retaining our shoemaking skills and our commitment to superior quality. We froze manufacturing wages, and we cut headquarters salaries and eliminated their incentive compensation. Our majority owner and lenders re-invested in the company to give us breathing room.

“Most significantly, we focused on great service to core customers, listened to their input and re-committed to Made in USA production. Instead of pulling in our horns, we acted like a growth company by introducing new products, such as casual shoes that fit our core customers’ tastes. We also re-introduced four Timeless Classics styles that had been highly popular (all ended up being Top Ten sellers last year).

“So that loyal customers could more easily afford ‘like-new’ shoes, we offered special pricing for re-crafting of existing AE shoes. Along the way, we re-connected with key Milwaukee partners in advertising, shoe finishings and community relationships.

“The results? Our plant has been working overtime since Q4 2009, and we’ve already added back more workers than we laid off. Sales in our own stores are up more than 20 percent compared to 2009, and we’re opening new locations. We’ll re-craft about 60,000 pairs of shoes this year, up from 35,000 annually before the crisis. Our promise to be The Great American Shoe Company is brighter than ever. Core partners – from customers to employees to financial partners to Milwaukee community members – have made all the difference. We’re grateful.”

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