http://www.nytimes.com/2007/06/24/business/yourmoney/24shoe.html?_r=1&oref=slogin

The Florsheims, Back in Their Own Shoes
By RON STODGHILL
Published: June 24, 2007
IF a death notice had been drafted for the Florsheim Group in 2001, the year that the company went on life support, it might have read something like this:

A well-known company, whose shoes outfitted generations of American boys and men for school, work, weddings and funerals for most of the 20th century, died yesterday. Once a small, profitable and highly regarded family business, Florsheim, owned for the past 50 years by outside investors, succumbed to loads of debt, lackadaisical vision and outdated styling. Florsheim, 110 years old, is survived by a slew of much hipper brands.

But if the famous old shoemaker was once on the verge of being shoved six feet under, how has it come to pass that Thomas Florsheim Jr., 49, a great-grandson of the company’s founder, is touting Florsheim’s new fall selection? As Mr. Florsheim strolls around his Manhattan hotel room — refitted to resemble a shoe store — he is in full pitchman mode, parsing the nuances of soles, lasts and uppers. He’s also contrite about Florsheim’s failures.

“Look, we know what people think when they think of us: they think of wing tips, the capped toe, the really brogue shoes and that we had gotten to a point where we were very stodgy,” he says, fingering racks filled with the company’s new line — some 80 percent of which, he says, has been overhauled over the last three years. “But we’re moving the needle in terms of style.”

Five years ago, when Apollo Management, then the majority owner of Florsheim, put the shoemaker into bankruptcy, the company was in shambles: most of its 200 retail stores were losing money, licensing deals with designers like Joseph Abboud had proved a bust, many of its factories were operating at well below capacity and its product pipeline was outdated and shoddy. That’s when the Florsheims — the family, not the company — did a bit of, well, sole searching.

Driven by sentiment as much as opportunity, two of the Florsheim scions, Thomas Jr. and John, along with their father, Thomas Sr., bought the broken shoemaker in 2002 for about $45 million, nearly 50 years after their family first gave up control. Since reacquiring the shoemaker that bears their name, the Florsheims have achieved the improbable.

“They’ve picked their family name out of the garbage bin and polished it up and made it a success again,” says Joseph Gomes, a retail analyst at McGinn Smith & Company. “In a business that continues to be dominated by bigger and bigger players, that has not been an easy thing to do.”

But if Florsheim’s second act offers a crash course in resurrecting a failed brand name, it also sheds light on the fragility of family succession and control in even the most established of enterprises — and how botched transfers of power from one generation to another at Florsheim caused conflicts that separated the family from its legacy for decades.

“Running any family business is notoriously troublesome, and very few ever make it into the fifth generation,” John Florsheim says. “This one almost didn’t, partly because of the relationship between my father and my grandfather. There was no love lost between them.”

Florsheim’s turnaround comes just as so-called heritage brands — weathered brands like Dr. Scholl’s and Chuck Taylor — have found a growing cachet among younger customers. But analysts still question whether Florsheim itself can capitalize on that trend by making long-term customers out of fickle 18- to 25-year-olds who are coveted shoppers in the $25 billion domestic footwear industry.

“We are at a time and place when resurrecting brands is at an all-time high — what was once old and obsolete is now new again,” says Marshal Cohen, chief analyst at the NPD Group, a research firm that tracks retail trends. “The question is whether the brand can truly step out of its comfort zone to push the envelope with a younger generation. Just because you resurrect a brand doesn’t mean you are going to stay there.”


AS Mr. Florsheim paces around his hotel room, he stops midstride and points at the calfskin toe of his 10-D, low-slung brown leather loafer. “A couple of years ago, there wasn’t a shoe in the Florsheim line that I would have worn,” he says. “We don’t think we’re Gucci, but our styling is much more contemporary now.”

Making Florsheim more contemporary has paid off. The Florsheims own more than a third of a small, publicly traded company near Milwaukee, the Weyco Group, that distributes such moderately priced footwear lines as Nunn Bush, Stacy Adams, Brass Boot and, of course, the revived Florsheim. While the Weyco Group does not record the separate earnings of its three shoe divisions, company officials said that Florsheim had pretax profits of more than $15 million last year on sales of $95 million, compared with pretax losses of $26 million on sales of $183 million in 2001. (The 2001 figure, however, included sales at more than 170 retail stores that have since been shuttered.)

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Last edited by Jerrysfriend (2007-06-24 11:11:33)