The Stride Rite Corporation
Address:
191 Spring Street
P.O. Box
Lexington, Massachusetts 02420-9191
U.S.A.
Telephone: (617) 824-6000
Fax: (617) 824-6549
http://www.strideritecorp.com
Statistics:
Public Company
Incorporated: 1919 as Green Shoe Manufacturing Company
Employees: 2,300
Sales: $572.7 million (1999)
Stock Exchanges: New York
Ticker Symbol: SRR
NAIC: 316219 Other Footwear Manufacturing; 42234 Footwear Wholesalers; 44821 Shoe Stores
Company Perspectives:
The Stride Rite Corporation is the leading marketer of high quality children's footwear in the United States and is a major marketer of athletic and casual footwear for children and adults. Our business was founded on the strength of the Stride Rite children's brand, but today includes a portfolio of great American brands addressing different market segments within the footwear industry. ... The company is predominately a wholesaler of footwear, selling its products nationwide to independent retail stores, department stores, sporting goods stores, and marinas. We market our products in countries outside the United States and Canada through independent distributors and licensees. The Company imports substantially all of its products from independent resources in the Far East who manufacture footwear according to each brand's specifications and quality standards.
Key Dates:
1919: Company founded in Boston by partners Slosberg and Green as the Green Shoe Manufacturing Company.
1924: Green sells his share of the company to Charles B. Strecker and his son, Seymour.
1929: Seymour Strecker sells his share to Philip Green.
1933: Green Shoe buys the name Stride Rite from Tom Lalonde, manufacturer of children's shoes hired by the company as a sales person.
1960: The company goes public.
1962: The company acquires the Weber Shoe Company.
1966: Green Shoe Manufacturing Company becomes Stride Rite and acquires the H. Scheft Company and Stone Shoe Company
1968: Arnold Hiatt, Blue Star's president, becomes the first non-family member president of Stride Rite; company buys the Orange Shoe Co.
1971: Stride Rite opens the first company-run daycare center in the United States.
1979: The firm opens its first Overland Trading Company and purchases Keds and Sperry Top-Sider from Uniroyal.
1983: Company headquarters moves to Cambridge, Massachusetts.
1993: Bob Siegel is named company president and CEO.
1997: Siegel retires and Jim Eskridge succeeds him as president.
1999: Eskridge resigns and is succeeded by David M. Chamberlain.
Company History:
Founded in 1919 as Green Shoe Manufacturing Company, the Stride Rite Corporation has become a major designer and manufacturer of shoes and casual footwear for both children and adults. Stride Rite markets its products under its own brand names: Stride Rite, Pro Keds, Keds , Sperry Top-Sider, Munchkin, Street Hot, and Grasshoppers. It also markets footwear under the licensed brand names of Tommy Hilfiger and Nine West Kids. Besides wholesaling its line, Stride Rite sells its shoes through about 120 company-owned stores as well as about 50 leased departments in major department stores and some 30 Stride Rite Family Footwear outlets. It also manufactures and markets a limited line of adult and children's sports and casual wear. Although headquartered in Lexington, Massachusetts, most of Stride Rite's footwear is made through contract arrangements with manufacturers in the Far East. Even though it markets its products in more than 30 countries, about 96 percent of its annual revenue comes from domestic sales. Stride Rite has also been recognized in the United States for its innovative, socially-conscious programs.
1919--24: Partners Slosberg and Green Start Company
In 1919, Jacob A. Slosberg founded a small shoe manufacturing company with his partner, Philip Green. Initially set up in converted stables in the Roxbury section of Boston, the Green Shoe Manufacturing Company specialized in making stitchdown shoes (also called welt shoes) for children. The company, employing nearly 100 people, was able to produce between 800 and 1,000 pairs of shoes each day.
Slosberg, who came to the United States from Russia in 1887 at the age of 12, had almost 30 years of experience in the shoe manufacturing industry when he co-founded Green Shoe. Beginning in 1892 he had worked for a series of shoe and shoe machinery manufacturers in Lynn and Beverly, Massachusetts. In those factories he had spent long hours stitching shoes and later dismantling and reassembling shoe machinery. He had then become a foreman at the Thomas Plant Company, a manufacturer of shoe machines, and when Thomas was sold to United Shoe Machinery, he joined the Greenberg-Miller Company, a manufacturer of children's shoes in New York. He put the money he had been able to save and the experience he had been able to garner into Green Shoe.
In the early 1920s a disagreement emerged between Philip Green and Slosberg. Some sources say that it involved the quality of the product, which Slosberg was determined to maintain, while others say it was about whether to produce children's shoes or, as Green favored, women's shoes. In any case, in 1924 Green sold his share of the enterprise, which was bought up by Charles B. Strecker, a banker, and his son Seymour.
1925--44: Green Shoes Fares Well Through the Depression and War Years
Green Shoe grew rapidly under Slosberg's direction. The main brand names were Green-flex and Mo-Debs. Because of overcrowding in the converted stables, Slosberg built a new manufacturing facility. Seymour Strecker sold his share of Green Shoe to Slosberg ten days before the stock market crash of 1929. However, even during the Depression, Green Shoe continued to grow. By the mid-1930s, the company was manufacturing about 3,000 pairs of shoes per day. During hard times, the company gained a reputation for reliability and value.
In 1933 Green Shoe, already seeking a brand name that could unite its entire line, hired Tom Lalonde, a manufacturer of children's shoes, to work in sales. Lalonde owned the name Stride Rite, and Green Shoe bought the name for $1,000 from him, using it for a line of extra support shoes. By 1937 the name was extended to all shoes manufactured by the company.
Jacob Slosberg had two sons, Sam and Charles, who began work at Green Shoe in the early 1920s. Sam eventually went into sales, and Charles took over manufacturing. Charles visited shoe factories in the United States and Europe in order to find ways of streamlining production and distribution without sacrificing quality. He was particularly concerned that the company be able to deliver shoes to outlets in a timely fashion with a minimum of mistakes. To this end, he developed a highly efficient in-stock system. Incoming orders were analyzed immediately. If the items requested were out of stock, production lines were switched over to that product as needed. Workers known as 'expediters' hand-carried these orders through the production process. In this way, the company was never 'out of stock.' This enabled Green Shoe, and for some years Stride Rite, to guarantee that 100 percent of an order would be delivered within 24 hours of the placement of the order.
During World War II, Green Shoe helped develop and manufactured the nurse's field boot and the WAC boot for the Army. Slosberg, who was a member of the War Production Board, used the opportunity to encourage retailers to buy Stride Rite, with the result that the business boomed. It was also during the War that the company began selling shoes to department stores such as Jordan Marsh, Filene's, and Dayton Hudson in Detroit, all under private store labels.
1945--70: Rapid Expansion, Going Public, and Becoming Stride Rite
The years between 1945 and the late 1950s saw the most rapid expansion in the company's history, partly as a result of the postwar baby boom. One of the hallmarks of the company came to be multiple widths in children's shoes. Daily production rose to about 25,000 pairs in 1959. The work force quadrupled, and factory floor space increased seven-fold. In fact, the Stride Rite factory was at the time the largest factory in the United States manufacturing all of a company's products under one roof.
When Jacob Slosberg died in 1953, his sons. and son-in-law Martin Landay, assumed the management of the company. Samuel became president and Charles treasurer, with the additional duties of managing production, maintenance, and in-stock operation. Landay was named vice-president. Charles Slosberg died unexpectedly in 1960.
The 1960s and 1970s saw great changes in the way Green Shoe did business. The company went public in 1960. Then, in 1962, the first of several acquisitions greatly expanded the company. That year, Green Shoe acquired the Weber Shoe Company in Tipton, Missouri. Weber became a Green Shoe manufacturing facility. A second factory was built in 1969 in Hamilton, Missouri, to augment Weber's capacity. The Weber acquisition was followed in 1964 by that of the R.J. Potvin Company, in Brockton, Massachusetts. A new warehouse was built there in 1965.
In 1966, with increased capacity and public recognition of its name, Green Shoe became the Stride Rite Corporation. In that year, the company acquired the H. Scheft Company and Stone Shoe Company in Boston and in 1967, Blue Star Shoes, Inc., in Lawrence, Massachusetts. Arnold Hiatt, Blue Star's president, became the first non-family member to become president of Stride Rite in 1968. The same year, Orange Shoe Co., in Orange, Massachusetts, was added to Stride Rite. The shoe company that began in 1919 with a capacity of 1,000 pairs per day was producing 30,000 in 1969.
This period also saw great changes in the work force at Stride Rite. During the 1960s, African American women in particular joined the Stride Rite work force in great numbers, reflecting the changing population of Roxbury, the neighborhood in which the Boston factory was located. Many of the new employees could work only if they had day-care services for their children. Thus, in response to its employees' needs, Stride Rite opened the first company-run day-care center in the United States in 1971. The idea for the center, conceived by Arnold Hiatt, was initially seen as a charitable gift that would serve the surrounding community only. As Hiatt explained, 'The company had had a charitable foundation for some time, but it had limited itself to the traditional kinds of gifts-hospitals, universities, and other very visible community organizations-and had played a relatively passive check-writing role. I felt it was time for us to do something in a more targeted way ... in our community. At the time our offices and our plant were located in Roxbury, and I thought we ought to do something right there.'
Shortly after the center opened in the spring of 1971, it began enrolling employees' children. Hiatt commented: 'We're given credit for being a pioneer in employer-supported day care, but our aim was to provide child care for the community, for children of welfare mothers and single-parent households. Shortly after we started, one of our workers approached me and said, `You're willing to do this for the children in the neighborhood. Why don't you do the same for our children?' And I said fine. And from that day forward we tried to maintain a balance at the center between children from the community and the children of our employees.'
Although company headquarters were moved to Cambridge, Massachusetts, in 1983, and the original site was turned into a warehouse, the day-care center continued to service the same number of children as before. (In 1993, the company announced that the Roxbury warehouse would close. However, grants were made available to community groups to continue providing day-care services.) In addition, a day-care center was opened in Cambridge. The Stride Rite day-care centers, which were modeled in part on the Head Start program, have been studied and adapted by hundreds of companies all over the United States. Stride Rite looked into providing day-care services to employees at its production and distribution facilities outside of Massachusetts, but it plans were hindered by complications resulting from state regulations regarding child care. Abroad, the company had fewer problems, and by 1993 had opened a day-care center at a Stride Rite factory in Bangkok, Thailand.
Continued Expansion through Acquisitions in the 1970s--80s
During the 1970s, faced with stalled profits due to skyrocketing leather prices and competition from low-priced imports, the company decided to explore new territory, entering the market for the outdoorsy, sporty shoes gaining popularity among young people and children. The company opened its first Stride Rite Bootery in 1972 and its first Overland Trading Company in 1979. In addition, the company purchased Keds and Sperry Top-Sider from Uniroyal in 1979 for $18 million and $5.7 million respectively. Keds, which had been losing money for Uniroyal, achieved a full turnaround by 1982, and Sperry also became very popular as a result of the 'preppie look' fad of the 1980s. In fact, in the early 1980s, Sperry grew at a rate of 80 percent, a rate described as 'unmatched at the moment in the shoe industry' by Footwear News in 1982. The ultimate decline in the popularity Top-Siders emphasized what at the time was a basic Stride Rite marketing approach: in general the company did not try to hitch onto every fad and did not try to associate its name with high profile athletes as did some of its competitors. The success of Top-Siders was unplanned and unexpected; thus the downturn was also unexpected.
During this time, Stride Rite benefitted most perhaps from its reputation as a maker of high-quality children's shoes. Parents looked for reliable quality and value for their children, and the company appeared not to stray too far from their expectations. Moreover, studies began to appear in the 1980s indicating that toddlers learned to walk better in shoes than in sneakers, and these findings fueled a 31 percent increase in sales of baby shoes in 1986 over 1985. Several of Stride Rites' baby shoes were granted the Seal of Acceptance by the American Podiatric Medical Association in 1989, the only baby shoes to hold that seal. As children's apparel became trendier in the 1980s, Stride Rite responded by changing its marketing, while retaining the basic look and quality of the line itself. By early 1989, Stride Rite had 715 retail units, 70 percent of which were owned by independent dealers, and the 25 Overland Trading Companies were spun off as an independent entity in 1988. Also in 1989, Keds brought out a line of natural fiber sportswear for children, under the name Keds Kids Clothes. Two years later, in 1991, Stride Rite founded Stride Rite International as a vehicle for marketing its products in foreign countries. The division marketed Stride Rite shoe lines in Europe, Asia, and Latin America. In 1992, the company also began to market a domestic line of women's clothes, Keds Apparel.
During this flurry of marketing activity, Stride Rite also started a new social program. Hiatt, who was then chairman of the company, had read an article in 1986 in the Wall Street Journal which detailed problems encountered by families with both child care and elder care responsibilities. After several years of research and with funding from the Stride Rite Charitable Foundation and input from several social agencies and Wheelock College, the company opened its Intergenerational Day-Care Center in 1990. The Center, which was housed at the company's headquarters, had separate areas and activities for seniors and children as well as common areas. According to Karen Leibold, the director of the center, 'The relationship between the children and the elders has really exceeded our expectations. We thought we'd need to bring them together very slowly, with a lot of staff direction and with specific projects to do. What we've found is that they're like magnets with each other. ... Sometimes it can be five minutes at the beginning or the end of the day. ... Sometimes it's waving across the lunchroom at each other. Sometimes it can be an extended period of time, reading books together, or cooking, or making things with blocks or Play-Doh.'
Stride Rite demonstrated that socially conscious policies and profitability could go hand in hand. Net income rose by $5 to $10 million each year between 1984 and 1991--from $5.4 million to $66 million--and its return on equity exceeded 30 percent between 1989 and 1991. Both of these figures were down slightly in 1992; net income dropped to $61.5 million and equity return to 23.6 percent even though net sales increased. Still, the company appeared to understand the employees and customers who make such growth possible. At the time, Arnold Hiatt summarized the Stride Rite philosophy: 'We don't live in a vacuum. We live in a community. And that community has needs. It is people from the community who buy our products and support our business. It doesn't seem too far-fetched to have an interest in the well-being of that community. We're just broadening the definition of our self-interest.'
1993--2000: Ups and Downs and Revamped Product Lines for the New Century
After Bob Siegel was named Stride Rite's CEO in 1993, the company began updating its product line, partly in response to the great popularity of the variety of athletic shoes being marketed by such competitors as Nike and Reebok. The need to do so had become obvious, mostly because the thicker-soled, training and running footwear had by then replaced the old style tennis shoe as the casual footwear of choice in America. Bottom-line figures for Stride Rite showed that its market share of casual footwear sales was nosediving. In 1994 its net income dropped to $19.8 million, down from $58.3 million the previous year, and in 1995, with its total revenue falling off to $496 million, the company recorded a $8.4 million net loss. Siegel responded by closing more than 80 company-owned, underperforming retail stores, which by 1996 put the company back in the black, but just barely. Sales in that year continued to fall, dropping to a low of $448.3 million, down from an average total revenue of $556.6 million for the five year period between 1990 and 1994.
The market realties forced Stride Rite to adopt a more fashion-conscious philosophy. In 1997, the company commissioned Todd Oldham to design a new line of Keds. It also partnered with London Fog to develop a Sperry clothing line, with Nine West for a line of children's shoes, and with Tommy Hilfiger for a line of adult footwear. Also, in 1998, the year in which Siegel retired, using its poor sales record as the principal reason, Stride Rite severed the licensing ties with Levi Straus that had been agreed to in April 1997.
Former Mattel executive Jim Eskridge succeeded Siegel as Stride Rite's CEO. During his tenure, which was less than a year, Stride Rite continued to rally, with revenues climbing to $539.4 million in 1998, and $572.7 million in 1999, with net income figures, respectively, of $21.1 million and $26.4 million. The financial gain was achieved at some cost, notably in the cutting down of the company's work force, which fell from 3,500 in 1996 to 2,300 in 1999, way below the 1990 figure of 5,600.
Over disagreements with the board about the company's direction, Eskridge resigned in July 1999. Temporarily, his place was taken by Myles J. Slosberg, board member and grandson of Stride Rite's founder. Thereafter, David M. Chamberlain, former Genesco chairman, was named both CEO and chairman. Under his watch, Stride Rite's profits again dove, partly because Keds, Sperry, and Tommy Hilfiger footwear did not perform as hoped. Nevertheless, Chamberlain claimed that the company was strengthening its product line and would rally in the Spring 2001 selling season.
Principal Subsidiaries: The Keds Corp.; Sperry Top-Sider, Inc.; Stride Rite Children's Group, Inc.; Stride Rite Intl Corp.; Stride Rite Sourcing Intl, Inc.
Principal Competitors: adidas-Salomon AG; Brown Shoe Company, Inc.; Converse Inc.;
Genesco Inc.; NIKE, Inc.; Reebok International Ltd.
Further Reading:
Chabrow, Eric, 'Supply Chains Go Global,' Information Week, April 3, 2000, p. 50.
From Green Shoe to Stride Rite, Cambridge, Mass.: Stride Rite Corp.
Gonsalves, Antone, 'Stride Rite Gets E-Com Footing: Outsourcing Design and Upkeep of Apps Brings Shoe-Selling Online, on Time,' PC Week, September 27, 1999, p. 31.
Keegan, Paul, 'Doing the Rite Thing,' Boston Magazine, July 1991, p. 22.
Laabs, Jennifer, 'Family Issues Are a Priority at Stride Rite,' Personnel Journal, July 1993, p. 48.
Morgan, Hal, and Kerry Tucker, Companies That Care, New York: Simon and Schuster, 1991.
Moukheiber, Zina, 'They Want Mules, We'll Sell Mules: Robert Siegel's Management of Stride Rite Corp.,' Forbes, September 12, 1994, p. 42.
Olivieri, David, 'Progressive Company Profits from Its Steady Pace,' Business Journal, May 25, 1992, p. 4A.
Reidy, Chris, 'Lexington, Mass.-Based Shoe Maker Hopes for Rebound under New CEO,' Knight-Ridder/Tribune Business News, November 4, 1999.
Solnik, Claude, 'Recharged Stride Rite Seeks to Give Keds Sales More Voltage,' Footwear News, February 4, 2000, p. 7.
Stone, Nan, 'Building Corporate Character: An Interview with Stride Rite Chairman Arnold Hiatt,' Harvard Business Review, March-April 1992, p. 94.
Tedeschi, Mark, 'Stride Rite Corp. Selects David Chamberlain as Chairman/CEO,' Sporting Goods Business, December 10, 1999, p. 30.
Van Tuyl, Laura, 'Day Care Program Bridges Generations,' Christian Science Monitor, April 15, 1991.
Wilson, Marianne, 'Through a Child's Eyes,' Chain Store Executive with Shopping Center Age, September 2000, p. 156.
Source: International Directory of Company Histories, Vol. 37. St. James Press, 2001.
