Brooks Shoe Company is a small but well-recognized and reputable athletic footwear manufacturer. The firm is best known for manufacturing running shoes. It actually ranked among the top brands in the US during the 1970s. However, the company failed in sustaining its market leadership during the 1980s and floundered as a result.

They then came up with a new market strategy during the 90s, targeting serious runners aged between 35 and 54. This reinvigorated Brooks Sports Inc. and prompted diversification into apparel in year 1997. The firm now undertakes to design and manufacture running and fitness footwear, thus maintaining a globally remarkable presence in the athletic market. Below is the history of Brooks Shoe Company.

Origin of Brooks Shoe Company

The firm was founded in the year 1914 by Morris Goldenberg in Philadelphia when Brooks began making cleated sports shoes and ice skates. He selected the name “Brooks” as an Anglicized substitute for Bruchs, his wife’s maiden name. The company initially manufactured bathing shoes before moving into sports in 1930s. However, the company failed to distinguish itself until 60 years later when it soared high in manufacturing running shoes. Jogging became a popular activity across the US in 1970s and this in turn, made Brooks’ footwear quite popular. The company came into the running shoe industry with a spirit of innovation. Recently, they produced shoes that have the GORE-TEX water proof membrane. As we all know, runners will try everything to avoid soggy feet.

Brooks versus Nike

Brooks secured a large share of the drastically increasing profits and revenues while performing quite well in the fast-growing footwear industry. Brooks emerged as a favorite among many running enthusiasts who embraced this sport. During the late 1970s, Brooks was able to rank among the top three running-shoe brands. During this same period, an upstart rival was transformed- Nike. Nike however, could not outdo Brooks at this time.

Later, the comparisons between Brooks and Nike came to an end during the early 1980s. Nike sustained the momentum that was generated during the late 70s, helping them to develop a successful business that dominated in the athletic market. At this time, Brooks was quickly faltering. Some industry pundits claimed that the cause of Brooks’ collapse was its errant attempts to ape Nike’s strategy.

Nike later ironically intervened as savior of Brooks. The company was teetering on the brink of insolvency during the intervention period between its collapse and resurrection. And though the company was founded in 1914, its success began after its rise to prominence in the late 70s.

Brooks Comeback

Brooks strived to pay the price for its zeal within just a short span of time. It expanded its territory into other athletic-footwear markets. It made use of its success in the running shoe industry as the basis for diversification into an array of different footwear markets. These included aerobics, baseball and basketball. It also made entry into the realm of securing celebrity endorsements from popular professional athletes.

Although signing such athletes was a marketing strategy used by Nike, Brooks employed the same to keep pace with this rising giant. Some of the athletes they signed to endorse the $70 shoes include Dan Marino (football quarterback) and James Worthy (basketball star).

Brooks Downfall

Problems arose once again when Brooks began to slacken. This left the company overexposed to business downturn, hence unable to operate effectively. They resorted to using cheaper footwear materials in order to trim operating costs. They also slashed prices, distributing more of its merchandise to discount chains as they struggled to stanch the financial losses. As a result, this brand lost its credibility and got its image tarnished by the inferior products. Their marketing strategy also contributed to this as it repelled to the firm’s original customers.

There was a parent company that Brooks had, which endured all the perennial losses. Wolverine World Wide Inc. acquired Brooks in the year 1982 and operated it as its subsidiary. This firm, popularly known for its Hush Puppies shoes, felt the sting of its subsidiary’s problems having racked up $60 million in terms of losses during their decade of ownership and recording 8 consecutive years without any profit.

Rokke Group Buys Brooks Shoe Company

During the early 90s, Wolverine World Wide decided to unload that burdensome drag and found a willing buyer in February 1993. This marked the beginning of a new era for Brooks Shoe Inc. The new parent company was known as the Rokke Group, which later changed to Aker RGI- a privately-held Norwegian Investment Group that had interests in real estate, sporting goods, shipping and commercial fishing. The firm paid a sum of $21 million to purchase Brooks.

Renamed to Brooks Sports

Following this acquisition, the firm was renamed to Brooks Sports Inc. and relocated to near the headquarters of Rokke Group in Seattle. At the time of the purchase, Brooks was generating about $100 million in annual sales though company officials later contended that those financial figures were inflated by Wolverine World Wide. The firm that once ranked top three was now ranking 25th as of year 1993 with it dominating just 0.4% of the domestic market.

The company really needed profound changes. However, it appeared to regress instead of pressing forward as problems stemmed from its senior management. This delayed the implementation of programs designed to cure all the company’s ills. The cloud hanging over its managerial ranks was then cleared away in August 1993. Three of the firm’s executives, including the president, departed either after voluntarily stepping aside or being fired.

The stewardship of the company was then devolved to the Chairman and CEO of Rokke Group, Bjorn Gjelsten. This was just but a temporary solution to the firm’s problems. Gjelsten assumed control of the company as he searched for a suitable permanent replacement. In late 1993, he found a well-regarded executive known as Helen Rockey, who by this time was working for Nike as a general a manager of sport graphics and accessories division.

Rockey’s Stewardship

Gjelsten was impressed with Rockey’s performance. She became the first woman to head a major athletic-shoe company in the US. Rockey started by implementing sweeping changes and announced her intention to increase all the sales and profits by 25%. She undertook to oversee the re-engineering of Brook’s products, an approach which put the firm’s main focus on serious runners. Other sports categories were eliminated.

By June 1984, she had already delivered a running shoe which retailed at $109. She then began circuiting the retail establishments and concentrated on the running stores that used to serve as Brooks’ strongest distribution channel. Rockey preached product excellence as she promised revamped products. She also promised much better sell-through support by detailing plans that provided marketing support, sponsored athletes and incorporated individual retail establishments.

All the changes implemented by Rockey were able to create a leaner and more focused company. Profitability was restored within just her first year of stewardship. Sales rose drastically during the late 90s following the reestablishment of the brand in specialty running stores. The number of retail locations that stocked the firm’s footwear increased.

Entry into Apparel Business

Brooks Apparel

Rockey then unveiled her next plan in mid-1996, announcing that Brooks would make entry into apparel business. A full line of technical running and fitness apparel was introduced in the spring of 1997. This added a substantial revenue stream to the firm. By the decade’s end, the apparel accounted for 15% of the company’s total sales.

Aker RGI Cuts Ties With Brooks

Despite this improving performance, Aker RGI decided to cut its ties with Brooks. The company was thus sold to Stamford-Connecticut Venture Capital firm-J.H. Whitney & Co. for about $40 million. Aker RGI however, decided to retain a 20% stake in Brooks, with J.H. Whitney taking 60%, Rockey and 70 other employees taking 20%. Annual sales increased by 30% between 1995 and 1999. This led to high expectations of the company’s growth in some years to come.

Rockey’s Resignation

These expectations were shattered in March 1999 once Rockey made a startling announcement. She decided to leave Brooks for Just For Feet Inc. where she would take position as the president and CEO. This came a few months after she had led an employee buy-out of the firm. Consequently, Bruce Pettet, Vice President of Sales and Marketing took over the titles of CEO and President from Rockey. Bruce guaranteed that he would continue the strategies and policies that were developed by his predecessor.

Acquisition of Total-Quality Apparel Resource

Pettet oversaw the acquisition of Total-Quality Apparel Resource Inc. in November 1999. As a subsidiary, this strengthened Brooks’ presence in apparel. Later on in 2004, Russell Corporation acquired Brooks. In August 2006, Brooks was then sold to Berkshire Hathaway. The current CEO is Jim Weber, who was recognized as the Pacific North-West Entrepreneur of The Year in June 2013.

Brooks earned 3 industry distinction awards for eco-friendly technology and environmental stewardship. In 2010, Brooks joined forces with Prof. Joseph Hamill and Prof. Peter Bruggeman, leading biomechanical researchers. They helped in conducting intensive studies on running motion with intent to garner information which influenced and refined Brook’s footwear design.

Sponsorships

Brooks is now the main sponsor of the Hansons Brooks Distance Project. It was also the exclusive uniform provider for the national football team of Chile, a relationship that ended in 2010 once the Chilean Football Federation signed a deal with Puma.

With annual revenue over half a billion dollars,  Brooks today is a strong brand in the athletic shoe and apparel market.