Brooks Sports readies for next 100 years
06/29/2014 6:48 AM
06/29/2014 6:48 AM
At the ready, right arm out to snatch the baton as his teammate sprints through the flags for the handoff, Jim Weber takes off for his portion of a 10-kilometer relay to commemorate 100 years of Brooks shoes.
For Weber, the CEO of Brooks Sports, it is all about the run. With his 1151 bib pinned to his bright-green shirt and his Brooks shoes laced tight, his motto is to celebrate the run: “No matter how fast or how slow – run happy,” he says.
After years of false starts and going too fast, running-shoe company Brooks has hit its stride, celebrating a century of shoemaking, 21 years in Washington and 13 years of revenue growth.
The company has had a rough 100 years: bankruptcy, moving among three states, having six owners and even more CEOs. In May, the company took its centennial as an opportunity to celebrate it all with a week of panels, talks, cocktail hours, a future of running showcase and the run to the future relay race.
Weber took the reins in 2001, becoming the fourth CEO in three years. His first order of business was to focus strictly on performance runners. The strategy has paid off; revenue has grown from $65 million to almost $500 million in 2013.
Although the Great Recession caused sales to fall, its revenue still grew to $191 million in 2009.
“Running is the cheapest, most convenient form of exercise,” Weber explained. “You don’t need a health-club membership; you don’t need any equipment. Running shoes made the cut sort of like a $3 cup of coffee or a smartphone made the cut.”
With only 13 percent U.S. market share of the $3.5 billion performance-running category of athletic footwear, Brooks has a lot of room for growth, Weber said.
But the goal is not to be like Nike, which has captured 46 percent of sales, he said, acknowledging that Brooks has run into trouble in the past. In the mid-1970s, Brooks was selling all types of athletic footwear, including ice skates and baseball cleats. Brooks was among the nation’s top-selling brands with rave reviews from Runner’s World magazine – right there with Adidas and Nike.
Jerry Turner and his brother-in-law were running the company, and the two helped come up with many technologies still used in running shoes today, Turner said.
The running boom hit in the 1970s, but by the early ’80s Brooks couldn’t keep up with production, forcing the company to file for bankruptcy protection in 1981.
“Ultimately we grew so fast that we outgrew our ability to manage the business,” Turner said. “We went from the boom to bankrupt, and I lost it all.”
Michigan-based Wolverine Worldwide – maker of Hush Puppies – acquired Brooks out of bankruptcy, then sold it to the Seattle-based Rokke Group in 1993. The Rokke Group moved Brooks from Michigan to Bothell, Wash.
The company managed to stay afloat selling $30 to $40 shoes to retail chains, such as Big 5 Sporting Goods and Just for Feet, but the high operating costs on the mediocre shoes ultimately led Brooks into debt, Weber said.
When Weber took over in 2001, Brooks had more than $30 million in debt.
Since arriving in Washington, Brooks has changed hands three more times and cycled through five CEOs. The company has been a subsidiary of Warren Buffett’s Berkshire Hathaway since 2006.
The plan when Brooks originally moved to the area was to get rid of everything that wasn’t strictly running. When Weber joined the company, he knew that was the right tactic, but his focus was on higher-quality, more expensive shoes to be sold at specialty running stores, such as Pacers Running Stores in Washington, D.C., and Super Jock ‘N Jill in Seattle.
That coupled with bringing on athlete endorsements, sponsoring races, such as the Rock ‘n’ Roll Marathon, and turning Brooks’ 1999 Run Happy ad campaign into the company motto and way of life. Weber said he knew his plan to turn around the company would work – even as people told him it wouldn’t.
His plan did work.
“Brooks is No. 1 in specialty-retail stores right now. They have so brilliantly combined the product part with the soul part,” said David Willey, editor-in-chief of Runner’s World magazine. “Runners can trust them and to do that on top of where they were – all the ups and downs that they’ve had – it is a testament to their product.”