But there is no middle ground. Old manufacturers in the Midwest and elsewhere keep going under. The shoe business loses another 300 plants. Grow or die, goes the saying.
* * *
As if by intuition, Mike Brooks had already begun to position his company for success in what was then an unfamiliar new marketplace.
While selling to Sears, for example, he had tacked a name onto some of the red-laced hiking boots. Rocky, he decided, "sounded strong and bold and all-American." He had a new box designed, with a picture of a bighorn sheep on it, and he put the boots in it. Then he took Bob Hollenbaugh out of the factory and told him to start selling. Hollenbaugh knocked on the doors of independent stores in Ohio and nearby states. He made sales at margins far higher than Sears would ever have given the company. In 1983 the company began marketing "occupational" shoes, the kind worn by police officers and letter carriers, under the Rocky brand. The move opened up not only a new market but a new distribution network. Gradually, Mike saw that he had to reinvent the whole business. Like Timberland, his company had to be capable of making a distinctive product -- and then selling it, at comfortable margins, through whatever channels might be most appropriate. The company also had to broaden and deepen its line. You couldn't build a powerful brand with just the four Rocky boots it was then offering.
What Mike didn't know -- couldn't know -- was whether his father, still the company's sole stockholder, would accept the radical changes growth would entail. He knew that the older man didn't like change. What John wanted was to protect the company and the jobs it provided for his family and his Nelsonville neighbors. In John's mind, Mike understood, that meant this: Keep it small. Keep it manageable.
So far, the unusual father-son arrangement had worked out surprisingly well. John ran the plant. He gave Mike his head in other areas. They didn't always see eye to eye, but they rarely argued. Mike made a point of listening to John's advice. John took quiet pride in how Mike managed the business, and let him set the course. And in two critical areas, Mike's new strategy clicked into place perfectly.
For one thing, Mike created a line of products that was innovative and distinctive -- and that couldn't be knocked off the next month in Korea or Taiwan.
The ace up Mike's sleeve was Gore-Tex, the patented membrane that lets moisture escape but keeps water droplets out. Cobbling together some early Gore-Tex boots, Mike and his colleagues had realized they were onto something. Retailers and customers loved the boots. No competitor could duplicate them without a serious investment of time and money. Expanding the Gore-Tex line, Mike developed a close relationship with W. L. Gore & Associates, the material's manufacturer. In 1989 Gore announced that it would thenceforth require all footwear customers to pay $25,000 for a license. Other manufacturers were furious at Gore's audacity. To Mike, it was as if someone had erected a fence around his market, saying, Competitors Keep Out. Arriving on Gore's doorstep with a check, he broke open a bottle of champagne with Bob Gore, the company's chief executive.
The second strategic victory was equally important. In just a few years the Brooks company had created a new distribution network and a marketing strategy capable of selling to it.
Most of the marketing effort fell to Hollenbaugh, now sales manager. Hitting the road, he visited stores and lined up reps. Soon Brooks was selling to hundreds of retailers, mostly hunting and sporting-goods stores, mostly in the Midwest. It was a perfect market. The hunters and outdoorsmen who bought the boots valued their waterproof properties and would pay a premium for them. The fact that the boots carried the "Made in the USA" label was a plus. Hollenbaugh developed catalogs for the retailers. He learned how to do advertising. He masterminded campaigns in outdoor magazines. Sales rose. In 1988 the company passed the $20-million mark.
* * *
The late 1980s. Growing entrepreneurial companies are reshaping industry after industry. Most start with a clean slate -- new technologies, a new work force, a "smart team" of savvy, seasoned executives. Typically, they boast the kind of managerial sophistication that was once found only in the Fortune 500.
Old-line, family-owned companies aren't so lucky. Top executives tend to be blood relatives, which limits the talent pool. Family issues spill over into the business. Can family businesses even compete in this new economy? The answer is murky.
* * *
As the '80s waned, Mike Brooks pushed ahead, one innovation or initiative following hard on the heels of another.
In 1989, for example, the company brought out a waterproof boot made with Du Pont's tough Cordura nylon in a camouflage pattern popular with hunters. Dubbed the Cornstalker, the boot became the company's top seller.
A couple of years earlier Mike even took a step he once would have found difficult: he established first one offshore factory, and then another.
The reasons weren't hard to fathom. One, the Brooks boots, particularly their uppers, required huge amounts of hand labor. Two, the Nelsonville plant was running at capacity. It couldn't easily be expanded, and doing so probably didn't make economic sense, anyway. In 1987, looking for contractors in the Dominican Republic, Mike met Eric Beraza, a Spanish-speaking American and shoe-industry veteran who was running a plant there. Mike proposed that Beraza set up a Brooks plant and train its work force. By late 1987 the plant was up and running. With wages at that time less than $1 an hour there, the cost was competitive with anywhere else in the world. Later Beraza set up another factory, this one in Puerto Rico. Wages there were higher, but products made in Puerto Rico could be stamped Made in the USA. In the occupational-shoe market, that was a requirement.
