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Shoe Execs' Silver Lining Playbook

Some of the industry's most celebrated executives weigh in on the ups, the downs and the greatest learning experiences.

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For many powerful footwear executives, the rise to the top came from an unlikely source: a mix of business failures, flops and financial miscues.

But the best of today’s leaders turned those mistakes — some of which occurred in the early days of their careers, others midway through and yet others during the recent recession — into learning opportunities.

Donald Pliner, for one, understands that challenges can make one stronger.

The designer, who has struggled with both financial and legal troubles over the course of his career, told Footwear News he has learned that in times of trouble sometimes the only thing to do is keep going forward.

“I’ve lost everything in my life three times over,” he said, “but I’m taking a few steps back to take a bunch of steps forward.”

In Sam Edelman’s case, it wasn’t until being seriously injured in a horse riding accident in 2002, which ended his stint as a horse breeder and trainer, that he realized his real love was the fashion business.

Formerly the president of footwear at Esprit and co-founder of Kenneth Cole Productions Inc., Edelman said “it happened by accident” that he rejoined the shoe business after selling his Sam & Libby label to Maxwell Shoe Co. in 1996.

Meanwhile, other executives were changed for the better by picking up skills with each new opportunity.

Take Ken Hicks, chairman, president and CEO of Foot Locker Inc. He may run a sportswear chain with great aplomb now, but he recalls being completely wet behind the ears when he was fresh out of the U.S. Military Academy at West Point, in 1974.

“The only thing I knew how to do really well [upon graduating] was shoot cannons, which doesn’t work well in the real world,” quipped Hicks, who went on to earn an MBA from Harvard Business School, complete a consulting stint at McKinsey & Co., work his way through various planning and merchandising posts at department stores and land as president of Payless ShoeSource.

And if it weren’t for the Arab-Israeli conflict, Bob Goldman isn’t sure he’d even be a footwear manufacturer today. Goldman launched Cels Enterprises in 1971 as a fixturing outfit, selling the Modu Mode self-service shoe rack, of which Sears ordered 1 million units for Christmas 1973. Barely a week later, news of the Six-Day War sent “the price of plastic up three times and we couldn’t deliver at the price we sold it at,” Goldman recalled. He had to find something else to do — fast — and Chinese Laundry was born.

Sportie L.A. co-owner Isack Fadlon turned away from a full-time law career in favor of sneakers. And the reason, he explained, was simple. “In law, every day I’d wake up and destroy something,” Fadlon said. “In business, I felt like every day I could build and create something.”

Here, FN takes a closer look at the careers of five executives, the mistakes they’ve made along the way and how they’ve learned from those missteps.

Ken Hicks
Chairman, president & CEO, Foot Locker Inc.

What was your biggest career mistake and how did you overcome it?
KH: Early in my career, at May Department Stores, I had a new fixture made to display self-serve flatware in the silver department. We rolled it out to all the stores at once. The problem was the silverware didn’t fit properly, the brackets broke and were not replaceable, and the fixtures were scratched because of how the silverware sat on it. Also, I [failed to consider] that different silverware came in different sizes and they didn’t all fit. It was a $150,000 to $200,000 mistake. It was all the display money I had. I bet it all and screwed up.

What did you learn from that?
KH:
I learned to test everything before rolling it out. Just because it’s a good idea doesn’t mean it’s a perfect idea and will work under all conditions.

What continues to challenge you?
KH:
I’ve gone from Payless, where we made all our shoes, to [Foot Locker], where we make none of our shoes. The biggest adjustment is learning how to adapt to the changes in each business. The challenge of a vendor is to continually come up with new ideas that maintain viability and build on the brand, but retailers work much harder than vendors.

Was there any job you passed up along the way that you still wonder about?
KH:
A number of significant opportunities at very big retailers have come up, but the fit just wasn’t right for me. I’ve been fortunate to get all these offers. Clearly, people felt positive enough to give me a shot. This job [at Foot Locker] was right. I knew shoes, I saw the opportunities and it kept me involved in sports, which I love. I like to say, “If you move, make sure you’re running to something, not from something.”

Is there anything you’ve regretted doing?
KG:
I never look back and say, “Geez, I could’ve done this or that.” I always look forward and do the best with what I’ve got. I could’ve stayed in the Army, but if I did, I’d be retired by now. The only thing I didn’t enjoy doing was the one year I spent in Chuncheon, South Korea, from 1976 to 1977. I was allowed only one 10-minute phone call a month to my wife. At $10 per minute, [you can imagine what the] bills added up to.

Sam Edelman
President, Sam Edelman division, Brown Shoe Co.

What was your biggest career mistake and how did you overcome it?
SE:
Selling Sam & Libby in 1996 was the single worst decision of my career. I had a non-supportive board and maybe I was tired. I’d done a lot. Fortunately, we made a great decision in 2012 [to buy it back as part of Brown]. So we never think back anymore. All we do is think forward.

What did that episode actually teach you?
SE:
It taught me that when the going gets tough, the tough get going. It taught me that anything worth having is worth fighting for. And I learned that lesson really, really well. I’ve taught it to my son, who works for Brown Shoe today as an executive in our division. We never lose sight of that. We came back with a tremendous amount of energy. We’re very fortunate that Brown Shoe came in, first as our partner and now as our owner, and it’s been great.

Is there anything you would have done different?
SE:
That’s a great question. In my early 30s, I went to Esprit and if I had my choice I would’ve stayed there the rest of my life. It was a great job. But things changed at Esprit — management and other stuff — and I sort of was catapulted into starting my own company with my wife, Libby. I had many opportunities when I left Esprit, but nothing seemed as natural as starting our own company. It didn’t happen because I wanted it to, but it was probably the best thing that ever happened to us because we’ve established Sam & Libby into a very powerful brand.

What continues to challenge you?
SE:
Opening seven to eight stores within the next year, for sure. There’s a lot of pressure on me to design and develop a men’s line. I’m not saying officially whether I’m doing it, but there’s a lot of pressure on me to do it. I may do it. Then, there’s a tremendous amount of brand extension and licensing. We have some really exciting categories that we hope to launch in 2013 and 2014, both nationwide and international.

What lesson are you still learning today?
SE:
Fashion changes all the time and you have to be on top of it. That, and never read your own press.

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Isack Fadlon
Co-owner, Sportie LA

What was your biggest career mistake and how did you overcome it?
IF:
There are so many mistakes we’ve made along the way, from overbuying certain styles due to our insatiable appetite, to not investing in the right stocks. Specifically, I mean Nike Inc. From our first day of operation, we should have invested in Nike shares. I’ve learned that it’s always wise to invest in an industry and brand that you are very familiar with.


What’s been your biggest roadblock to success?
IF:
At the end of 2008, the economy changed the playing field for everyone, including us. It didn’t just hit our industry, it hit everyone. Up to that point, the sneaker industry was riding a wave where things were going well. But when the economy gets hit in such a big way, you have to think deeper and change how you function on a management level. That’s been a challenge because we have a large appetite here in terms of what we want to try and launching new brands. This recession was deeper and longer than any other one we’ve experienced in the past.

What’s been your biggest challenge?
IF:
Every day is a new challenge. In our industry, things move so fast and you always have to look to see how you can continue to develop what you’re offering. Every day I wake up and ask what’s next. The day one sits back and feels they’ve achieved everything is the day to do something else.

What remains a constant struggle for you?
IF:
How to grow in an organic way. In 27 years, we’ve had six stores plus our online store, so we’ve grown at a very methodical, slow pace. We don’t go out and seek funding. We do everything on our own, even though we’ve been approached by others to expand to the East Coast and the Midwest. My dad, who was not only my best friend but also my guide, taught me that. When we were opening in San Diego, he supported us and was there to help make sure we were ready and had everything in order first.

Do you regret turning them down?
IF:
The opportunities haven’t felt right. You can’t just take your model and replicate it. If you don’t do it right, it just waters down your brand. At the end of the day, the two decades you’ve taken to build can vanish. That’s always been a fear of ours.

Bob Goldman
Founder & CEO, Cels Enterprises Inc. and Chinese Laundry

What was your biggest career mistake and how did you overcome it?
BG:
Getting into the shoe business. I’m involved in a lot of other businesses, in real estate, in finance — any business is better than the shoe business.

Why do you say that?
BG:
It’s a very complex business. Footwear is a challenge every day and every year. There are 35 components that go into making a shoe. Getting all those components into production and according to schedule, while ensuring quality is there and the sizes are right, are all challenges that shoe people have to deal with. The only industry more complicated, as I understand it, is the women’s undergarment business.

What’s been your biggest challenge?
BG:
Developing people who understand the business and understand where to go with it, and how to fit in. You can’t have a business this size as a one-man show. It’s all about structure, organization and training.

Has any deal you signed gone south?
BG:
The Modu Mode deal [in the 1970s]. It was just such a big loss. There was a $5 profit on each unit, and on an order for 1 million units, I thought I’d pocketed $5 million. But the market keeps moving. It’s part of doing business. We all have ups and downs. You just have to keep rolling ahead and focus to be successful.

Have you made any other professional errors that stick out in your mind?
BG:
We had a factory in Los Angeles in the 1990s that didn’t work out. Over the years, [manufacturing has moved from] America to Europe to Taiwan to China. It’s a challenge getting people to help you do all this. You have to deal with people in all these factories that you work with. [And it’s tough because] every country has its own idiosyncrasies. They’re not all the same.

Donald Pliner
Creative director, Donald J Pliner

What was your biggest career mistake and how did you overcome it?
DP:
Closing my Beverly Hills, Calif., store. The real problem [wasn’t the strength of the business] but that [the street where the store was located] was converted from a two-way street into a one-way. Business fell 60 percent overnight and I was losing a lot of money for one-and-a-half years, but my ego kept it open. Every time I walk down that street [now I think] it’s really a shame. It was on the same block as where I opened my first store in 1967, so there was some heritage there.

What have you been most humbled by?
DP:
In 2008, [when the financial crisis hit and retail sales plunged], when many people were declaring bankruptcy, I should have made the same decision. I didn’t because I was trying to protect a lot of people who were working for me and had been working for me for more than 20 years. But now they all seem to have forgotten about it. I should have protected myself.

How have your financial troubles impacted you and your passion for the business?
DP:
You lose a little bit of your self-esteem each time. It’s very difficult when banks don’t loan you money. The number of banks that have consolidated today makes it more difficult.

Is there anything you would have done different?
DP:
I probably would’ve been more positive about how strong I really was [as a designer]. When bad things start happening you start losing faith in yourself, but you should never do that.

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