Start-up shoe manufacturer relies only on expensive domestic production.
John Thorbeck is hoping for his next home run -- but this time it's for himself. After four years at Timberland shoes, Thorbeck went to ailing G. H. Bass & Co. and engineered a turnaround that boosted sales by $90 million. Now he is betting the success of his own shoe shop, Geo. E. Keith Co., on the emergence of new shoe buyers.
In an industry in which nearly 90% of the product is imported, Keith will rely on expensive domestic production. Thorbeck is positioning his high-end Walk-Over line between athletic and dress shoes -- and pricing it 10% to 30% above its U.S. competitors. "Since the '60s, the shoe business has been low-cost athletic imports, but their reign is over," assures Thorbeck. Sure enough, the rate of growth in athletic shoe sales has slowed, with only a few brands showing any growth. Still, competitors aren't exactly tripping over one another to follow Thorbeck's lead -- he can't name another manufacturer in domestic production.