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Centennial Club: Brown Shoe Marks 100 Years on NYSE

Brown Shoe has grown into a global powerhouse since debuting on the NYSE in 1914.

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When George Warren Brown took his company public in 1914, he likely didn’t imagine that a passion project would one day grow into a global footwear empire.

Founded in 1878, St. Louis-based Brown Shoe Co. — initially named Bryan, Brown & Co. — took in $110,000 in revenue in its first year of operation, producing 150 pairs of shoes daily. Last year, the firm racked up $2.5 billion in revenue and sold 48 million pairs of Brown Shoe brands through its wholesale and owned retail channels.

“Given the long amount of time we’ve been on the [public] market, you just know how successful Brown Shoe has been and how often we had to be reinvented,” said Brown’s current chairman, president and CEO, Diane Sullivan. “At different points in time, we stood for different things. And the way the founders thought about shoes and fashion is a testament to the company we are today — they found a way to not only survive but thrive.”

Since listing on the market, the firm has endured two World Wars, the Great Depression, the Great Recession and numerous other disruptive events that have caused many companies to close their doors.

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Brown, on the other hand, has emerged stronger than ever, with plans to embark on the next 100 years by expanding its global footprint and online presence. Today, the retail and wholesale company is known for its portfolio brands that include

Via Spiga, Franco Sarto, Naturalizer, LifeStride, Dr. Scholl’s, Carlos by Carlos Santana, Fergie, Sam Edelman and Vince. The company operates roughly 1,100 Famous Footwear retail stores, which contribute more than half of Brown’s annual sales.

“It’s remarkable that one company could have remained independent ... in a highly competitive and consolidating industry. That is a vociferous testament to the fortitude of its unique corporate culture,” said Steve Marotta, an analyst at CL King & Associates. “I am thrilled for Diane and her entire team, as the centennial celebration is occurring simultaneous to the stock ascension.” (The stock reached a 52-week high of $28.73 on March 17.)

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John Malpiedi, SVP and GM of Naturalizer, noted that the firm’s four core values — trust and transparency; personal accountability; a passion for winning; and integrity — have defined Brown through the years. “The remarkable skills and talents of the people who have shaped Brown have driven its success,” he said.

Sullivan said that making it past the 100-year mark “shows you can’t think about something for the short term. Everybody who has been part of this company in some way has thought about the long term and what the firm’s legacy needs to be.”

Operating under the microscope of Wall Street analysts, while also adapting to the changing retail environment, requires a fine balance and forward planning, she added.

“One of the biggest challenges of being a publicly traded company is making sure you’re totally connecting with your customers in a way that is profitable for your shareholders,” Sullivan said. “You have to deliver on your commitments and show integrity, and that’s true for the public market and the consumer. It’s about making sure you continue to deliver the products they love.” Through the Years

Brown Shoe has changed dramatically, starting out as a U.S.-based footwear manufacturing firm and undergoing several strategic shifts that transformed it into the retail and wholesale multibrand company it is today.

George Brown started the business with just $7,000 in his pocket and $5,000 from other sources, joining forces with partners Alvin Bryan and Jerome Desnoyers, and employing New England shoemakers to manufacture product.

Speaking to Brown’s rich heritage, Michael Oberlander, SVP, general counsel and corporate secretary, observed that each decade is a chapter in the company’s very long story.

After purchasing the rights to the characters and imagery from the popular “Buster Brown” comic strip in 1904, the firm started children’s line Buster Brown Shoes.

Its first women’s brand — Naturalizer — launched in 1927 to fill a gap in the market.

“Naturalizer was the first brand to study the structure of a woman’s foot so that her shoes fit better, and it was the first American fashion footwear brand designed specifically for women,” Malpiedi said.

The brand’s tagline, “The shoe with the beautiful fit,” heralded a new era in women’s shoemaking, he added.

After expanding into the women’s market with Naturalizer, Brown began to build a footwear industry epicenter in the Midwest, taking advantage of plentiful supplies, labor and the evolution of new manufacturing processes in the U.S.

The firm’s ability to adapt in the face of challenging times is evidenced by its move to capitalize on the demand for troop shoes and boots during World War I, said Oberlander, as Brown landed several large military contracts.

“Brown was committed to supporting the war effort and achieved a large contract to supply boots to the Army,” Oberlander said. “An example of the passion and integrity of Brown employees was, when there were material shortages and delays in the factories in the Midwest, management carried the footwear components as personal baggage on overnight trains because they were so committed to fulfilling their obligations.”

From 1922 to 1925, the firm’s average earnings growth rate was 29 percent, while sales expanded 75 percent on average over the same period, according to data from Investor’s Business Daily.

In the early 1950s, the creation of LifeStride and the acquisition of Wohl Shoe Co. helped Brown gain momentum and expand its portfolio. And in 1952, the company shifted its headquarters to larger premises in Clayton, Mo.

“To grow, we realized we needed to get into businesses beyond footwear,” Oberlander said. “We became a mini-conglomerate for 17 years, but over time we realized we weren’t able to run the other businesses as well as footwear. Leadership in the 1980s and ’90s closed down all the side businesses and decided to focus solely on shoes.”

After consolidating the non-core operations, Brown expanded its retail footprint by purchasing the 36-store Famous Footwear chain in 1981.

Reflecting on the past 100 years, Rick Ausick, current division president of Famous Footwear, said, “The founders would be incredibly proud. They started with a goal in mind and a plan of how they were going to make their mark. The fact that the company has survived this long and is thriving is because the core values they instilled have lived on.”

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