Sole Survivor

There's a nice story in the November 1 issue of Time about New Balance. Here are some excerpts:

...New Balance has proved that it's possible to manufacture in the U.S. and compete. The company's plant in Brighton, Mass., for instance, features robotics and a high-tech molding process that can produce an outsole in 12 seconds -- allowing New Balance to make a sneaker from scratch and fill orders rapidly as they come in. Another advantage Davis sees: better relationships with retailers. New Balance's domestic factories play a key role in filling special orders for hard-to-find sizes and widths and give the company more flexibility to help out independent retailers -- a lucrative niche. The firm has a reputation "as the easiest company to do business with," according to the trade publication Sporting Goods Investor. As for the wage gap, Davis says it's overblown. All his U.S. plants are highly automated, with bar-coded parts and computerized stitching and embroidery machines, resulting in about 25 minutes of manual labor to produce a pair of shoes versus more than four hours in a less automated Asian plant.

None of this will matter, of course, if Davis can't sell a hot product.

Davis wants to maintain as much of his operations as close to his New England home as possible, and without Wall Street pressure to eke out maximum profits, he can invest where he pleases and patiently wait for the returns. His wife Anne sits next door to him at work, running the human-resources department, and most of his senior executives have been with him for a decade or longer. Turnover rate at his plants: just 5%.

Though I am certainly no athlete, I've been a fan of NB shoes for several years. Although my current pair is made in China, this story is a good example of a company that is doing it right for its customers without sacrificing its core values. They're staying competitive without giving up what makes them strong.

New Balance shoes fit, they're comfortable, and they don't cost an arm and a leg. But my favorite thing about NB is that you can buy the same shoe year after year. I'm just finishing up my second pair of 608's. (All NB shoes have an easily identifiable model number.) I know I can go to Kohl's next week and get a new pair of the exact same shoe. It's a guy's dream come true! I don't even have to try them on.

New Balance faces the same challenges as the rest of us in the CPG business: the mass retailing oligopoly, China Inc. and fickle consumers, to name a few, yet they are winning the battle. They are privately owned and answer only to their conscience and their customers. But this doesn't mean they have their heads in the sand. They continue to be progressive and make bold, unconventional investments to grow their business. The last line in the article says it all: "Innovation, meet tradition."