Sole Success

It's easy enough, when you know a few tricks, to change a frog into a handsome prince. And it's not so amazing, when you know the right words, to turn an ugly duckling into a swan. But how do you transform an Abington Shoe Co. into a Timberland? How do you pull a brand name out of a hat, or, in this case, out of a boot?

It happened once in Newmarket, N.H., but even today, Herman and Sidney Swartz, the two brothers who own the Timberland Co., are slightly surprised that they brought it off. "Sure, we used a little brains," Herman says, "but you wouldn't believe that luck we've run into."

At one time, the Swartz brothers toiled thanklessly in private-label obscurity. Now their company is recognized nationwide for high-quality outdoor footwear. Once they advertised only in hunting and outdoor magazines. Now they tout their wares in the New Yorker. Once their products were displayed in the fluorescent hangars of the big discount chains. Now they're in the boutiques of Saks and Bloomingdale's. And once Herman and Sidney rode to work together in an aging, compact Plymouth. Now they make the trip in a grey Mercedes-Benz 300 SD.

Theirs is a real-life fairy tale that turns on a boot. That's right, a big, leather, waterproof, insulated boot with about a mile or so of thong to lace it up over the ankle. The brothers convinced folks that if they wore this knobby, rubber-soled boot they would be -- and this is hard to say without a chuckle -- fashionable.

"Once Saks used our boots in a window display right there on Fifth Avenue," 45-year-old Sidney say, "I guess we sent down an army of people to look at it and take pictures. I couldn't get over it."

A similar sense of wonder characterizes much of the Timberland story. Perhaps that's because, with what was an almost cosmic sense of timing, certain critical decisions coincided with certain critical events to transform the Abington Shoe Co. into the Timberland Co. The story can easily make you realize that business success is often powered as much by a kind of magical coincidence as by rational planning.

In 1918, when he was 21, Nathan Swartz, Herman's and Sidney's father, emigrated to the United States from Russia and got a job as an apprentice stitcher in some forgotten shoe company in Boston. As the years went by, he sampled a variety of responsibilities in the shoe business, including selling, managing, and manufacturing. "Throughout the thirties and forties," Herman says, "my father had a lot of ups and downs. The shoe industry was not as kind to him as it might have been."

But in 1951, Nathan found a niche for himself when he bought a half interest in the Abington Shoe Co., an existing business housed in a former paino warehouse in South Boston. In 1955, when his partner died, he bought the other half; that year, his two sons joined him. For the next 15 years, father and sons struggled with the punishing economics and cutthroat competition of high-volume, private-label shoe manufacturing. They made a glossy oxford, a moccasin-toe workboot, and a functional, if not handsome, workshoe.

The principal attraction of Abington's products was price; they sold for roughly $4.95 a pair even in the middle 1960s, which made them very popular with discount stores."We were just a commodity," says 54-year-old Herman. "We tried to make a nickel or dime on each pair. During those years we were just trying to keep our heads above water."

But low margins weren't the worst part of the experience. "There were no real roots set down," Sidney says. "You didn't know where your business was going. A buyer's loyalty lasted only as long as the last order he had written. It was always feast or famine."

The mid-1960s were particularly bitter: Too many competitors chased too little business. At the end of a typical day, as Sidney wanted through the shoe departments of nearby stores, he saw rack after rack filled with competitors' shoes. "They were literally giving them away, losing 75 cents or a dollar a pair, just to get into the chains. They were desperate for business. We didn't eat very well for a while."

For Abington, though, the hard times were a blessing in disguise. By 1968 many weaker shoe manufacturers had gone out of business as the persistent price war took its toll. That cleared the way for a business boom between 1969 and 1973. The tough competition also inspired the Swartz brothers to introduce a manufacturing innovation, and convinced them that they had to break free of the boom-and-bust cycle.

For the first time, the story gets dusted with magical coincidence. Herman and Sidney were thinking economy, not brand-name marketing, when they decided in 1968 to buy equipment for injection molding. This process forms a thick rubber sole onto any leather upper without stitching, thus eliminating needle holes that leak. More important at the time, the process also eliminated the costly, hard-to-find hand-stitchers themselves. "Injection molding," Herman says, "had the reputation of being used only on the cheapest shoes. But we decided that there was no reason we couldn't make a quality shoe by combining high-grade leather with injection molding. The labor savings were enormous."

But the brothers didn't have the $16,000 they needed to buy the molds. "Now here's one for you," Herman says, recalling the minor miracle. "Sidney and I had bought some stock in a small company at $4 a share and just when we needed the money for the equipment that stock went to $16 a share. Can you believe it?"

Labor was still a problem, even with the new machines. The old neighborhood just wasn't the same. Skilled help was scarce and often unreliable. When a few employees were mugged on the way to work, the brothers decided it was time to relocate. In 1969, they moved out of the old piano warehouse and into an old mill in Newmarket, N.H., about an hour and a half north of Boston. Newmarket was a nice enough New England town. It was a little frayed around the edges, but it offered one major advantage: skilled labor, left over from the heyday of New England's shoemaking industry.

Once again coincidence worked to Abington's advantage. The company got the people and equipment it needed just as many of the big retail chains started major expansion programs. "Between 1969 and 1973," Herman says, "our sales almost doubled every year. The chains were opening new stores right and left. They had to have products, and there were a lot fewer suppliers, so we got all the business we could handle."

The drought was over, business was booming, but instead of whooping for joy, the brothers were gnawing their fingernails. "We knew," Sidney says, "that behind this fabulous feast was a door that could slam shut at any time. I mean we had lived through it more than once, and we were simply paranoid about it happening again."