# Allen Edmonds bought by Caleres



## Woofa (Dec 23, 2014)

https://www.bizjournals.com/stlouis/news/2016/12/13/caleres-buys-allen-edmonds-for-255-million.html

Thoughts?


----------



## Clintotron (Mar 24, 2015)

Is Dianne single? Hmmmm. Seriously, though. The words "materials sourcing" didn't sit well with me. I have one pair of AE and no history with those shoes or the company, but they're fantastic quality.


Sent from my iPhone using Tapatalk


----------



## momsdoc (Sep 19, 2013)

The comments from Caleres pertaining to AE's manufacturing ability, and Paul's comments about access to greater materials sourcing, gives me pause.

As a subsidiary to a much larger, and broader based clothing supplier, it would seem AE's corporate philosophy of quality and U.S. production will inevitably be drowned out. From his comments here and in the news, I've always thought Paul regarded AE as more a family owned enterprise despite its corporate owners. As such he has been able to keep it true to its traditions. Will the new CEO, be it Paul or someone else continue to do so? History does not give one hope.

Thankfully I have all the AE shoes and boots I will need or want for my lifetime. I hadn't planned on any future purchases, and am now glad I have oversupplied myself. 

Gentlemen who have been sitting on the fence, consider 2017 your year to jump into the pond and have your fill. As for me, I'm glad my Iberian makers are still going strong.


----------



## SG_67 (Mar 22, 2014)

This was the statement that got my attention:

"We're also eager to explore their manufacturing resources, as we continue to focus on our ability to increase our speed to market."

That means expanding production, which means off-shoring more of the production. I realize AE is a proud domestic heritage brand, but I'm over them. I have enough shoes in my rotation that I can look elsewhere at more interesting options. Once you've got the basics covered, AE loses it's relevance.


----------



## Peppercorn78 (Aug 2, 2014)

It doesn't say whether Mr. G will stay on as CEO. I always considered him the vanguard protecting product quality and customer care.


----------



## Orsini (Apr 24, 2007)

The beginning of the end for AE.


----------



## swils8610 (Mar 12, 2016)

To bad. AE is likely become like Florsheim, Hanover and many other long gone but not forgotten quality US manufactures. 


Sent from my iPhone using Tapatalk Pro


----------



## Watchman (Jun 11, 2013)

Alden just got a whole lot more appealing...


----------



## mreams99 (Jan 7, 2015)

I'm not happy to hear about a big change for a company that I appreciate. It's a little scary not knowing what changes will be made.

I think that's a key point though -- we don't know what will change. Perhaps it's premature to mourn the loss of this company. Perhaps the changes will be improvements. We just don't know.

I have decided that rather than worry and complain about changes that haven't even happened yet, I will wait to see what happens.


----------



## SG_67 (Mar 22, 2014)

Whenever a company like this is bought and sold, a little piece of it dies. At some point all that's left is the name.


----------



## Watchman (Jun 11, 2013)

When I toured the factory about 2 years ago, they were working 6 days a week from what I remember and making about 1000 pairs of shoes/boots per day.

And there was like a war cry for more and more then...now look at them...

This really is tragic. But, I suppose we should give them the benefit of the doubt.


----------



## Fraser Tartan (May 12, 2010)

I think in the next few years we'll be left with a select group of Made in USA shoes selling for $150 or $200 more than they do today. The majority of Allen Edmonds shoes will be made overseas and they'll try to sell those at current prices.

I don't think Made in USA will be going anywhere but you'll have fewer USA-made models to choose from and you'll be paying a premium. Those $395 (retail) Park Avenues will be going for $545 soon enough.


----------



## Oldsarge (Feb 20, 2011)

There is something in the American soul that loves bad news and is always eager to make the assumption that any change will be for the worst. As a Registered Skeptic I refuse to leap to judgement. Come the day when the phrase "made in the USA" no longer appears on the AE label I will concede the jeremiads were correct. Until then, should I need another pair of dress shoes I will look first to AE. Of course, that day may be years in the future since I already have wall full!


----------



## harmelba (Jun 6, 2015)

Like the rest of you, I assume this will negatively impact quality. I have plenty of their shoes to last a while, certainly long enough to hear how this will turn out long term.

Sent from my SM-G930T using Tapatalk


----------



## FLMike (Sep 17, 2008)

First of all, this shouldn't come as a huge surprise. Every private equity portfolio company is bound for a new owner within 5-7 years no matter what. It's just the nature of PE....AE has been an exit strategy in the making since it was bought by its current ownership.

That said, I'm not encouraged by this transaction. Caleres is a portfolio of Chinese-made, mass market footwear brands and discount shoe stores. According to their most recent 10-K, of the 47 million pairs of footwear sourced in 2015, 45 million were sourced from China and Vietnam. I sure hope they don't make any drastic changes to AE's current production model in the name of efficiencies and/or cost savings that would bring harm to the brand. Similarly, if they start selling parts of the AE line through their 1,000-plus Famous Footwear stores in strip centers and discount malls, that would likewise be very bad news for the brand, in my opinion.

I know it doesn't make sense to jump to conclusions about their plans for AE, and as others have suggested, we should problem give them the benefit of the doubt. Still, I'm not feeling real warm and fuzzy about this one. Time will tell.....


----------



## ErnstStavroBlofeld (Jan 8, 2013)

I can see why some people sense dread at this news and tbh I'm concerned as well.

However, I have some reasons to look up in a sense as AE was already owned by another private equity firm before this deal. Furthermore, I was speaking to an AE employee that I know and he said the company's long term strategy was "to double down on the Made in America aspect. As he told me AE was expanding it's WI manfaucturing operation due to the above and generous tax and investment ncentives from the State of WI.

Which makes sense because let's be honest that's one of the few things a company in the anemic menswear business has going for it these days. Get rid of that and quality-an AE will be worthless from a financial standpoint.

Also from the macro view of things let's also remember that the US has just elected a President who has been harshly critical of outsourcing and has threatened to go after companies that do so and/or attack them on Twitter causing their value to plumment.


----------



## MNJ83 (Oct 11, 2015)

Oldsarge said:


> There is something in the American soul that loves bad news and is always eager to make the assumption that any change will be for the worst. As a Registered Skeptic I refuse to leap to judgement. Come the day when the phrase "made in the USA" no longer appears on the AE label I will concede the jeremiads were correct. Until then, should I need another pair of dress shoes I will look first to AE. Of course, that day may be years in the future since I already have wall full!


Has this not happened already with most of the American shoe industry? I don't think anyone is being a prophet of doom, it's just hard to imagine that Calaris, has any interest in continuing the current AE model of US made shoes


----------



## Oldsarge (Feb 20, 2011)

Attacks on Twitter dropping value? Really? I'm sorry but I seriously doubt that there is a CEO in the US that gives a rat's patootie about what The Donald says on Twitter. Carrier and Ford squeezed huge tax advantages out of the gov and still sent thousands of jobs to Mexico. There's a cartoon running around that has a little girl on her phone saying, "Trump? If I don't get a $7,000,000 bailout I'm outsourcing my lemonade stand to Mexico." That's how much his Twitter matters. Now, off all political topics and back to the sackcloth and ashes over this change of ownership.


----------



## ErnstStavroBlofeld (Jan 8, 2013)

Oldsarge said:


> Attacks on Twitter dropping value? Really? I'm sorry but I seriously doubt that there is a CEO in the US that gives a rat's patootie about what The Donald says on Twitter. Carrier and Ford squeezed huge tax advantages out of the gov and still sent thousands of jobs to Mexico. There's a cartoon running around that has a little girl on her phone saying, "Trump? If I don't get a $7,000,000 bailout I'm outsourcing my lemonade stand to Mexico." That's how much his Twitter matters. Now, off all political topics and back to the sackcloth and ashes over this change of ownership.


Oldsarge,

You might want to ask Carrier, Boeing,, or Lockheed Martin about that.


----------



## Dhaller (Jan 20, 2008)

Well, just thinking out loud:

AE was acquired in 2013 for $180mil, and has just been bought for $255mil, which would be considered a moderately good return (11-12% annualized) from a private equity perspective... but it was a turnaround situation in 2008, so factoring that in, it's advanced remarkably in 8 years.

AE has stated (in May of this year) that a core feature of it's (then) strategic plan was do shift brand direction from "established workforce" to "millennial men", in particular men entering the workforce, even going so far as to develop discounted student packages for job seekers. I would guess that this direction is of interest to Caleres, and we'll see style launches targeting that market segment.

It's hard (for me, not having a current Hoovers subscription) to find financials on AE, but Caleres enjoys a gross profit margin of 40% on total revenues, which is certainly far leaner than AE. I'm not sure what AE's total revenue is, but it was $120 million when it was acquired in 2013, so just assuming that revenue tracks paper value (a gross estimate, admittedly), current revenue may be in the neighborhood of $180-$200 million. Just jumping ahead a bit, and using retail sector P/E averages, I'd guess AE's earnings are around $8 million, giving it something like a 4-5% profit margin.

So compare that: AE's 4-5% to Caleres' 40%. Caleres will certainly discipline the AE unit to bring it in line with overall financials, which means there absolutely have to be significant under-the-hood changes at AE : new diffusion lines, cost cutting, and so on, if I had to guess.

We'll see!

DH


----------



## FLMike (Sep 17, 2008)

Oldsarge said:


> I'm sorry but I seriously doubt that there is a CEO in the US that gives a rat's patootie about what The Donald says on Twitter.


As a certain someone has been famously known to say lately..... "Wrong!"


----------



## drlivingston (Jun 21, 2012)

Most of us are realists and are capable of seeing past the ballyhoo of administration transition economics. I guarantee you that this has been in the works for far longer than Trump has been president-elect. The writing on the wall is bold but simple. Many people in Port Washington better be getting their resumes in order. By this time next year, there will be some Asian (China and/or India) AE models.


----------



## medhat (Jan 15, 2006)

drlivingston said:


> Most of us are realists and are capable of seeing past the ballyhoo of administration transition economics. I guarantee you that this has been in the works for far longer than Trump has been president-elect. The writing on the wall is bold but simple. Many people in Port Washington better be getting their resumes in order. By this time next year, there will be some Asian (China and/or India) AE models.


Maybe, Yes, I agree that a sale was an inevitable consequence of AE's recent success, but the wholesale move of production overseas I would feel is unlikely. But first, 'cause I know he's likely to read this thread, thank you Paul for making a quality American-made product we can argue over. If we (collectively) didn't care, this whole topic would be a non-starter. So thanks for all you've done up to now for AE. I'm presuming you may be on a retainer. Correct?

Okay, playing Carnak (old Johnny Carson reference). I DON'T believe AE's future earnings growth is via selling the same volume for 50% more; there just isn't that large a market for $500 dollar shoes, regardless of country of origin. Nah, I'd be pretty confident that AE would, akin to men's clothing, introduce a "diffusion" line of well-styled, foreign-manufactured, shoes. Imagine a Fifth Avenue in a cheaper leather, composite sole, made overseas, retailing for about $100. Purists (i.e. "us") are likely not to buy them (rain shoes?) but that price point would be much more appealing to the large swath of Americans who don't own, or plan to own, multiple pairs of dress shoes (yes, they do exist!). To me that's the ticket to revenue growth. They keep the Port Washington manufacturing facility, which is already working at/near capacity, and off shore the diffusion line, which ends up at places like Macys and perhaps even Mens' Wearhouse. Nordstrom can continue to sell "main line" AE, and the mail order and shoe banks stuff stays pretty much the same. The new parent company makes more money. Everyone's happy.


----------



## MNJ83 (Oct 11, 2015)

The article quotes Grangaard as saying "this is what he has been looking for the past 8 years" ....ha. He had me fooled. I wonder if he will be making any more
posts around these parts.

The writing is indeed on the wall. AE was not sold of to Alden or to a Northampton great. It was sold of to a maker of cheap Asian made shoes that are the opposite of everything that AE represents. I can't think of anyone worse to have acquired AE.


----------



## Oldsarge (Feb 20, 2011)

Agreed. That would be my take on things. Made In America is a rich niche market but it's for the well-heeled. Those poor souls whose jobs were 'outsourced' can't afford to pay the price American workers demand for quality goods so they are somewhat forced to get what they can at Was-Mart--Chinese made landfill ware. It is sad but I see no getting past the grim fact that the well-paid Middle Class Worker is becoming a rare beast. Today's factories are all run by robots and the only humans are robot tenders. This is no job for the high school drop out! Those who have the ability and the drive to learn serious skills will still do well but for the rest the future is bleak.

Tell your children to become hard-hat divers. Take home in that trade often exceeds $250,000/year.


----------



## MNJ83 (Oct 11, 2015)

medhat said:


> Maybe, Yes, I agree that a sale was an inevitable consequence of AE's recent success, but the wholesale move of production overseas I would feel is unlikely. But first, 'cause I know he's likely to read this thread, thank you Paul for making a quality American-made product we can argue over. If we (collectively) didn't care, this whole topic would be a non-starter. So thanks for all you've done up to now for AE. I'm presuming you may be on a retainer. Correct?
> 
> Okay, playing Carnak (old Johnny Carson reference). I DON'T believe AE's future earnings growth is via selling the same volume for 50% more; there just isn't that large a market for $500 dollar shoes, regardless of country of origin. Nah, I'd be pretty confident that AE would, akin to men's clothing, introduce a "diffusion" line of well-styled, foreign-manufactured, shoes. Imagine a Fifth Avenue in a cheaper leather, composite sole, made overseas, retailing for about $100. Purists (i.e. "us") are likely not to buy them (rain shoes?) but that price point would be much more appealing to the large swath of Americans who don't own, or plan to own, multiple pairs of dress shoes (yes, they do exist!). To me that's the ticket to revenue growth. They keep the Port Washington manufacturing facility, which is already working at/near capacity, and off shore the diffusion line, which ends up at places like Macys and perhaps even Mens' Wearhouse. Nordstrom can continue to sell "main line" AE, and the mail order and shoe banks stuff stays pretty much the same. The new parent company makes more money. Everyone's happy.


No company can successfully be all things for all people. There is only so much diffusion you can do before you start watering down the brand. This has been tried over and over and over with the same result. Even now you have Coach and Ralph Lauren pulling out of retail stores like Macy's because it has damaged the brands image. If you start selling 100 dollar Chinese AE's at Macy's (which I imagine is a plausible scenario) then they are destroying whatever element of exclusivity AE has left. People like exclusivity.


----------



## drlivingston (Jun 21, 2012)

medhat said:


> Maybe, Yes, I agree that a sale was an inevitable consequence of AE's recent success, but the wholesale move of production overseas I would feel is unlikely.


I agree. I never said that the whole plant would be closed. I just indicated that many will lose their jobs as some production will be shifted to Asia. Look at other Caleres brands and their respective histories.



medhat said:


> They keep the Port Washington manufacturing facility, which is already working at/near capacity, and off shore the diffusion line, which ends up at places like Macys and perhaps even Mens' Wearhouse. Nordstrom can continue to sell "main line" AE, and the mail order and shoe banks stuff stays pretty much the same.


Other retailers like Belk and VonMaur already carry some mainline models. Every time that I pick up a pair of US-made Florsheims or Cole Haans, I am reminded of a time when they were solid companies producing a solid product. Then... well, it doesn't take Paul Harvey to tell us the rest of those stories.


----------



## Flanderian (Apr 30, 2008)

Peppercorn78 said:


> It doesn't say whether Mr. G will stay on as CEO. I always considered him the vanguard protecting product quality and customer care.


Paul Grangaard is an investment banker. They bought AE for $180M 3 years ago per the NYT, and sold it now for $255M, per the St. Louis Times. $75M isn't bad appreciation over 3 years.



Fraser Tartan said:


> I think in the next few years we'll be left with a select group of Made in USA shoes selling for $150 or $200 more than they do today. The majority of Allen Edmonds shoes will be made overseas and they'll try to sell those at current prices.
> 
> I don't think Made in USA will be going anywhere but you'll have fewer USA-made models to choose from and you'll be paying a premium. Those $395 (retail) Park Avenues will be going for $545 soon enough.


That's what Johnston and Murphy did at first with its product line before moving virtually all of its manufacturing off shore.



FLMike said:


> First of all, this shouldn't come as a huge surprise. Every private equity portfolio company is bound for a new owner within 5-7 years no matter what. It's just the nature of PE....AE has been an exit strategy in the making since it was bought by its current ownership.
> 
> That said, I'm not encouraged by this transaction. Caleres is a portfolio of Chinese-made, mass market footwear brands and discount shoe stores. According to their most recent 10-K, of the 47 million pairs of footwear sourced in 2015, 45 million were sourced from China and Vietnam. I sure hope they don't make any drastic changes to AE's current production model in the name of efficiencies and/or cost savings that would bring harm to the brand. Similarly, if they start selling parts of the AE line through their 1,000-plus Famous Footwear stores in strip centers and discount malls, that would likewise be very bad news for the brand, in my opinion.


Per the Caleres website the brands include the following list. How many are made in the U.S.?

_Family:

_At more than 1,000 stores and online at famous.com, Famous Footwear features styles from hundreds of name brands for the whole family.

_Healthy living:

_Naturalizer, Dr. Scholl's Shoes, LifeStride, Bzees, and Rykä are designed for consumers seeking comfort and style without sacrificing performance.

_Contemporary fashion:

_Sam Edelman, Franco Sarto, Via Spiga, Vince, Diane von Furstenberg (DVF), George Brown Bilt, Carlos by Carlos Santana and Fergie Footwear keep stylish women and men in step with the latest trends.


----------



## Flanderian (Apr 30, 2008)

New AE logo?


----------



## CSG (Nov 22, 2011)

I just might have to buy a couple more pairs of AE shoes (if I can get them delivered without factory defects).


----------



## drlivingston (Jun 21, 2012)

Flanderian said:


> New AE logo?


It is just androgynous enough to work.


----------



## eagle2250 (Mar 24, 2006)

Maybe it's time for the younglings to more seriously consider British made shoes! In the mean time, I will continue to lovingly care for/maintain the pairs of AE's and Aldens that presently reside on my shoe racks. Why all this sense of surprise? China decided a long time ago that we could be bought cheaply enough that they wouldn't have to beat us on the battlefield, but rather could quietly establish a controlling equity interest in all that is American! (Heavy sigh!!!)


----------



## Flanderian (Apr 30, 2008)

drlivingston said:


> It is just androgynous enough to work.


As you no doubt know, Caleres is the successor corporation to the Brown Shoe Co., one-time publisher of Buster Brown comics featuring Buster and his dog Tige as pictured. Heavily advertised on kid's TV shows, the only way you could get one is to buy a pair of shoes. I was sold and nagged my mother until she coughed up the extra couple dollars which was the price differential between my normal Thom McAn's and the Brown shoes.

I didn't think the Brown shoes were any better, and I read the comic and thought it sub-mediocre. I'm not sure I ever found Buster androgynous, but there sure was something quietly sinister in his representation, and his dog looked a lot like the vicious strays that lurked in empty lots and harassed kids to and from school.

Aka, they were creeps! :angry:



eagle2250 said:


> Maybe it's time for the younglings to more seriously consider British made shoes! In the mean time, I will continue to lovingly care for/maintain the pairs of AE's and Aldens that presently reside on my shoe racks. Why all this sense of surprise? China decided a long time ago that we could be bought cheaply enough that they wouldn't have to beat us on the battlefield, but rather could quietly establish a controlling equity interest in all that is American! (Heavy sigh!!!)


Ah-ha!

The vast majority of struggle is economic at its root, and business can be warfare by another means.

We surrender! Welcome to America, a wholly owned subsidiary of China Inc.! :biggrin:


----------



## Old Road Dog (Sep 4, 2015)

*Allen Edmonds acquired by Caleres*

One of our favorite shoe makers has been acquired by Caleres, who among other brands owns Dr. Scholls brand shoes. Sounds like AE 's will be even more comfy than before, and you will no longer have to cut out sections of their shoes to avoid bunion pain. Things could be worse... they could have gone out of business for good.


----------



## FiscalDean (Dec 10, 2011)

Please let us know what your source is.


----------



## SG_67 (Mar 22, 2014)

There's another thread alluding to this.

https://askandyaboutclothes.com/community/showthread.php?235111-Allen-Edmonds-bought-by-Caleres


----------



## crispyfresh (Jan 30, 2016)

Allen edmonds about to become Johnston and Murphy ...


----------



## CSG (Nov 22, 2011)

So will their remanufacturing operation move to China?


----------



## Flanderian (Apr 30, 2008)

CSG said:


> So will their remanufacturing operation move to China?


More likely here . . . .


----------



## Oldsarge (Feb 20, 2011)

You know, the last time AE changed hands this forum went through the same wholesale wringing of hands and wearing of sackcloth and ashes. The factory remained in the US and the shoes were still the same. But as I said above, Americans love bemoaning every possible thing, especially changes. Enjoy your bitter tears, chaps. But do beware of prescriptions opiates. Depression kills.


----------



## MNJ83 (Oct 11, 2015)

Last time AE changes hands it was not to an entity that makes all of its shoes in China. This is not gnashing of the teeth it's an obvious outcome.


----------



## SG_67 (Mar 22, 2014)

Who knows what they'll do. Maybe they bought it so they could add a higher end range to their line up. 

It's true that the last time this happened there was a lot of "gnashing of teeth" but it's also the consensus that the quality has has down. It's also a fact that they've produced some truly ugly shoes and some real flops.


----------



## crispyfresh (Jan 30, 2016)

MNJ83 said:


> Last time AE changes hands it was not to an entity that makes all of its shoes in China. This is not gnashing of the teeth it's an obvious outcome.


I'm not pretending to be a expert on this either, but i do know this: Everytime a company purchases another company, they wanna see a return on their money. Allen Edmonds in my opinion is gonna venture into the lower priced shoe arena to recoup that money for their new buyers.

Worst case scenario should be a " niche" line of Allen Edmonds priced around $500 or so, and a ton of $200 dollar shoes competiting with Cole Hann and Johnston and Murphy, etc.


----------



## Ensiferous (Mar 5, 2012)

Dhaller said:


> I'd guess AE's earnings are around $8 million, giving it something like a 4-5% profit margin.
> 
> So compare that: AE's 4-5% to Caleres' 40%. Caleres will certainly discipline the AE unit to bring it in line with overall financials, which means there absolutely have to be significant under-the-hood changes at AE : new diffusion lines, cost cutting, and so on, if I had to guess.


Not my area of expertise, but how possibly could an American shoe manufacturer realize such an enormous increase in their margin without drastic cuts in labor cost, i.e. offshoring?


----------



## Woofa (Dec 23, 2014)

I hope that AE will continue to make its basic conservative dress shoes in the US with no change in quality. I would not be surprised however, to learn that they will continue to expand into additional revenue streams (like clothing) as well as the more casual, lower quality shoes (in for a season or two and then discontinued) which they can sell at a lower price point but witha bigger profit.
The problem as I see it is that prices have continued to go up. A look at their website shows all the staples (Park Avenues, Fifth Avenues, Strands, etc.) at $400.Perhaps still a decent value but high enough that discerning men who really know and care about their footwear will start thinking about buying elsewhere (Meermin) or spending the extra money to move up to the next level (Alden.) I think there is a small but strong market for a good quality pair of men's dress shoes in the $250to $300 range but as that price goes up, I think you lose market share to the Cole-Haans of the world. I know that many of us here get AE's on discount either through the ShoeBank or NordstromRack and that they can still be bought new at 50% off retail for good value but I highly doubt that we are the main targeted consumer.


----------



## FLMike (Sep 17, 2008)

Ensiferous said:


> Not my area of expertise, but how possibly could an American shoe manufacturer realize such an enormous increase in their margin without drastic cuts in labor cost, i.e. offshoring?


I wasn't going to reply to Dhaller's post, because I figured kudos to him for trying to put some numbers to it. However, there are many, many flaws in his analysis. You've hit on but one. He made some assumptions to try and estimate sales, and then back into earnings using some industry average PE multiple. Even if his assumptions about sales and PE were good (not sure that they are), the denominator of PE is net (after-tax) earnings. So he then calculated a _net_ earnings margin for AE of 4-5% and compared it to the Caleres _gross_ margin of 40.7%. Totally apples and oranges. The Caleres net margin is 3.2%, by the way (according to their 10-K). AE's gross margin is unknowable. Another major issue with the whole analysis is that the numerator of PE is equity price. We don't know the equity value of AE, only the total (enterprise) value of the transaction, which includes AE's LT debt. You don't really use PEs when discussing private company valuations anyway. The proper comparison would be enterprise value to EBITDA (earnings before interest, taxes, depreciation & amortization), compared to industry average EV/EBITDA multiples. Bottom line is we just don't have enough information on AE to make comparisons, or to even determine the true success of Brentwood'a investment in AE. While we may know their purchase price and sale price, we don't know how they put together the capital structure (sr/sub debt vs equity), or how much additional equity or debt capital they may have invested during the time they owned AE. Again, there were lots of holes in Dhaller's analysis, but all the info you could possibly want on Caleres is easily accessible in their 10-K filing.


----------



## SG_67 (Mar 22, 2014)

I can't see how AE can charge anymore for their shoes, at least the retail price. If they cross over the $400 threshold and certainly if they approach $500, there are far better competitors. 

The way they will increase profits is by churning out shoes from overseas sweatshops. That's probably what Ms. Sullivan is talking about when she mentions "sharing our expertise" and "capabilities inherent in a much larger footwear company". 

The only expertise they have is producing crap shoes at sweatshop prices thereby maximizing the profit margin.


----------



## Nick V (May 8, 2007)

I don't understand the naysayers....

In 2006 AE sold to Goldner, Hawn for 100 mil. A few years later Goldner sold to Brentwood for 180 mil. After holding the company for 3/4 years Brentwood has now sold it for 255 mil.
In each case the naysayers were saying the same things they are saying now......

Mr. G. has been the CEO going back to the Goldner Hawn era. I'm not sure if this is a fact but, I heard he will be staying on.

AE is a solid healthy U.S. company. So strong that companies have been making large investments in them. They are investing in the continued success of AE's future.

So, I'm going to disagree with the naysayers. I'll put my chip on the history of all these transactions, the results and that AE will only get better.


----------



## zainab (Dec 15, 2016)

Dear I sent you a private message, I need your help choosing a shoe for walking, between Meermin and Ecco.


----------



## crispyfresh (Jan 30, 2016)

SG_67 said:


> I can't see how AE can charge anymore for their shoes, at least the retail price. If they cross over the $400 threshold and certainly if they approach $500, there are far better competitors.
> 
> The way they will increase profits is by churning out shoes from overseas sweatshops. That's probably what Ms. Sullivan is talking about when she mentions "sharing our expertise" and "capabilities inherent in a much larger footwear company".
> 
> The only expertise they have is producing crap shoes at sweatshop prices thereby maximizing the profit margin.


Thats precisely the way i see this playing out. I'm predicting they will weed out slow selling models and keep a core group of handmade shoes around $400-$500. The rest will be $200 shoes competiting with Cole Hann, etc.


----------



## FLMike (Sep 17, 2008)

SG_67 said:


> The only expertise they have is producing crap shoes at sweatshop prices thereby maximizing the profit margin.


Well, to be fair, they also have expertise in running a chain of 1,000-plus retail stores that sell such shoes (their own brands and others). Here is the line-up of men's "dress shoes" available in their Famous Footwear stores. I cringe at the thought of some AE- or AE derivative-branded shoes showing up within that line-up.

https://www.famousfootwear.com/Mobi...ear.com&icid=mensLP_LNdress&N=4294957708+6208


----------



## Clintotron (Mar 24, 2015)

SG_67 said:


> I can't see how AE can charge anymore for their shoes, at least the retail price. If they cross over the $400 threshold and certainly if they approach $500, there are far better competitors.
> 
> The way they will increase profits is by churning out shoes from overseas sweatshops. That's probably what Ms. Sullivan is talking about when she mentions "sharing our expertise" and "capabilities inherent in a much larger footwear company".
> 
> The only expertise they have is producing crap shoes at sweatshop prices thereby maximizing the profit margin.


These mergers always contain generalizations that prevent us from having a sure idea in what the direction is or will be. I do understand the need for ambiguity for legal butt-covering, but it forces us to wait for the old expression "time will tell" to come into fruition.

Sent from my iPhone using Tapatalk


----------



## FLMike (Sep 17, 2008)

Clintotron said:


> These mergers always contain generalizations that prevent us from having a sure idea in what the direction is or will be. I do understand the need for ambiguity for legal butt-covering, but it forces us to wait for the old expression "time will tell" to come into fruition.
> 
> Sent from my iPhone using Tapatalk


I would agree with you in the case of private equity acquisitIons. However, when the buyer is a public company, the strategy is very clearly articulated by management to shareholders, and to the analyst/investor community at large. In the case of the AE deal, Caleres management has promised to provide more details regarding the acquisition during its fourth quarter earnings conference call.


----------



## FLMike (Sep 17, 2008)

FLMike said:


> I wasn't going to reply to Dhaller's post, because I figured kudos to him for trying to put some numbers to it. However, there are many, many flaws in his analysis. You've hit on but one. He made some assumptions to try and estimate sales, and then back into earnings using some industry average PE multiple. Even if his assumptions about sales and PE were good (not sure that they are), the denominator of PE is net (after-tax) earnings. So he then calculated a _net_ earnings margin for AE of 4-5% and compared it to the Caleres _gross_ margin of 40.7%. Totally apples and oranges. The Caleres net margin is 3.2%, by the way (according to their 10-K). AE's gross margin is unknowable. Another major issue with the whole analysis is that the numerator of PE is equity price. We don't know the equity value of AE, only the total (enterprise) value of the transaction, which includes AE's LT debt. You don't really use PEs when discussing private company valuations anyway. The proper comparison would be enterprise value to EBITDA (earnings before interest, taxes, depreciation & amortization), compared to industry average EV/EBITDA multiples. Bottom line is we just don't have enough information on AE to make comparisons, or to even determine the true success of Brentwood'a investment in AE. While we may know their purchase price and sale price, we don't know how they put together the capital structure (sr/sub debt vs equity), or how much additional equity or debt capital they may have invested during the time they owned AE. Again, there were lots of holes in Dhaller's analysis, but all the info you could possibly want on Caleres is easily accessible in their 10-K filing.


Following on these comments, an analyst who covers CAL stock has estimated AE revenues of $160-180 million, gross margin of 45-49% (versus 40.7% for CAL), and EBIT margin of 9-12% (vs 5.2% for CAL). So, AE already has higher profit margins than CAL. The analyst noted AE's low department store exposure, and identified adding to AE's small wholesale presence (estimated 70/30 retail/wholesale mix) and driving international growth (currently just 5% of AE sales) as key opportunities. He also suggested that CAL's capabilities in product design and sourcing, as well as warehousing and distribution, will naturally complement AE's existing business. No specific mention of moving production overseas, but he did cite the fact that almost all AE products are sourced in the U.S. as a reason to like the deal. Read into that what you will.

CAL management intends to provide more details regarding the acquisition during its fourth quarter earnings conference call in mid-March.


----------



## AllenEdmondsCEO (Mar 17, 2009)

Season's Greetings,AAAC Friends -- I've read through most of the comments in this thread. But it has been a busy several weeks and I have obligations to address, so I'm going to reply in general now and hope to get back to you in early 2017 for more interaction..

Caleres bought AE as the cornerstone of their strategy in men's dress and dress casual footwear and lifestyle branded products, where they currently hardly compete. I'll report directly to CEO Diane Sullivan, who's a great person and, like me, prefers to focus on vision and strategy. I like her already. We've known each other for about 3 years and she's been helpful in the past on a personnel recommendation. It's terrific to be bought by a company that doesn't have other men's brands for us to have to maneuver around. We can expand and grow now with no constraints because some other brand in the portfolio has a corner of the marketplace, well, cornered.

Our strategies will stay the same but grow, and the team is all staying in place. Caleres bought us because of what we could do with them, not what they could do to us. They have respect for our 95 year heritage, for how we do things differently than the women' side of their business, for the fact that we're a higher-end brand and that a high price:value relationship is our hallmark and for our management team. Importantly, they know we have one of the most impressive customer bases in menswear.... by far. So the changes you'll see will be those of intensifying who we are and what we do in good ways -- more marketing and customer development because of their longer term time horizon. 

Manufacturing in Port Washington is our core commitment. It's not going away. Period. Count on that one. The "materials sourcing assistance" they can give us is in componentry. They know European tanneries, sole makers and last manufacturers that we don't really know but who could be helpful.
Time marches on and change is inevitable. The Allen family, after 3 generations of ownership, ran out of scions to run the company and sold in 1983 to a group of investors led by John Stollenwerk. John took over leadership and ran it until 2006 but he had no heirs to turn the business over to either, so he sold to GoldnerHawn, where I worked. I came in as CEO two years later after some serious troubles and, over the first couple of years, made some serious personnel changes in parts of senior management and product development. We thought we'd be bought in 2013 by a strategic buyer/industry player, which is when I first met Diane Sullivan, but we were bought by Brentwood instead, another private equity firm. The folks in Northampton and in Massachusetts do indeed make good shoes, but they are all quite a bit smaller than today's AE and were never candidates. Brentwood brought some great expertise to us in catalog strategy development, retail store design and site selection -- which really helped catapult the company these past three years. Caleres approached them and gained a chance to do due diligence and negotiate a purchase on an exclusive basis. We weren't actually "for sale" but they met Brentwood's requirements. 

Each time the company has changed hands, the new owners have made the business better. I'm really confident that will again be the case with Caleres and my team and I are excited about the potential. Please rest assured. We know who Allen Edmonds is and what makes it successful. We'll keep it going that way. (However, I realize a couple of you don't see the good in that statement. Ah well. We'll press on nonetheless.)

Happy Holidays to you all!
Paul


----------



## orange fury (Dec 8, 2013)

Happy Holidays to you as well Paul, thank you for taking the time to respond!


----------



## CSG (Nov 22, 2011)

Thanks for the response, Paul. I must say though, your quality control is wanting. I had two pairs of Schrier loafers sent to me, both with significant manufacturing defects. I'm getting to the point where buying online from AE is getting too problematic. Feel free to PM me for details. I'd love to buy some McAllisters and get a decent pair of Schriers but I'm tired of waiting on hold for customer service and then a few weeks for a refund.

Chris


----------



## Watchman (Jun 11, 2013)

Thank you Mr. Grangaard for you gentlemanly response. You have struck me as a stand up guy every time I have read or met with you.

Blessings to yourself and AE. I wish you all the best.

Thanks.


----------



## Pentheos (Jun 30, 2008)

Soon we'll be seeing AE in outlet malls alongside Sperry, Nike, and Reebok. D widths only. Thank you very much.

The death of a brand.


----------



## drlivingston (Jun 21, 2012)

Paul has been a friend to AAAC for quite a while. I do hope what he says comes to pass. However, I worry that Ms. Sullivan is humoring him until she can figure out a way to outsource production and maximize profits. Many of you will remember when they shifted boat shoe production from Lewiston, ME, to the Dominican Republic in 2006. Then there is the handsewn "made in the USA" line which are 90% constructed in the DR. They are then shipped to Port Washington for final construction so that they can legally bear the "made in the USA" label. I fear that their international production footprint is about to rapidly expand.


----------



## SG_67 (Mar 22, 2014)

While I have no doubt that there is a commitment to continuing to produce domestically, that commitment does not preclude off shoring. 

When one talks about bringing things more quickly to market there's really no other way to view it.


----------



## cincydavid (May 21, 2012)

We shall see...I had been thinking about simplifying my work shoe rotation into AE Grayson in every color they make except walnut...perhaps it's time to stock up.


----------



## AllenEdmondsCEO (Mar 17, 2009)

Good Dr Livingston -- You underestimate my ability to judge people and their character, sir. I'm not worried about what you worry about , and I have the first hand experience to make the judgment. Trust me on this one. And thanks for your support over the years. 
Paul


----------



## AllenEdmondsCEO (Mar 17, 2009)

Thanks, Watchman. Best wishes for the Holidays and 2017! Paul


----------



## SG_67 (Mar 22, 2014)

It's not as though AE is unfamiliar with offshoring. It's already being done with a number of models in the DR. While I have no doubt that the core models (PA, MacNeil, etc.) will still be made in the U.S. more models and more lines may become available being sourced offshore and available at different discount/off priced retailers. 

Furthermore, while I respect the fact that made in the USA is still a commitment, I'd like to know exactly how much of the shoe is produced and manufactured right here. I'm not calling into question anything nor am I assuming to know; I'm genuinely interested. I know that there's an actual legal and statutory designation as to what qualifies as this.


----------



## AllenEdmondsCEO (Mar 17, 2009)

Regarding our DR boat shoe production and Lewsiton -- here's the full story. In 2008 at the depths of the economic crisis -- globally and on a micro level at AE -- we had to make cuts to survive and keep our loans. Our revenues were down a third since 2006 and we couldn't pay our interest on our loans. The boat shoes we made in Maine didn't sell much against Chinese imports. I worry about all of our jobs everyday, including the shoemakers but also all of those who bring our products to market and sell them. Boat shoes in the DR can be sold at competitive prices in our stores while still retaining th higher quality leathers and superior longevity we're known for. The DR is an American ally in our hemisphere (Monroe Doctrine anyone?), just a few hundred miles on a flimsy refugee raft away from south Florida. I'm almost as proud of the livings and jobs we sustain down there as I am in PW. (It does us no good for America to hog the prosperity ball in the Western Hemisphere.) What we're best at and will always be best at in the US is calfskin Goodyear welted dress shoes. We'll continue to grow employment in our Wisconsin plant by growing our brand and customer base for that core product through more stores and more online exposure. We'll also keep supporting higher-end US production in belts, business leathers, sport coats, socks and outerwear like our great shearling coats. We've created jobs at our US non-shoe suppliers, including requiring the return onshore of equipment for US production. But we can't sell enough $250 US boat shoes to justify the inventory across 70 stores and missed sales on those products are missed commissions for our US salespeople, and a chance for competitors to serve our customers. I never liked to lose in baseball, but I really hated not getting to play because of a forfeit. We decided to quit forfeiting the boat shoe and driving mocc game by getting competitive in the DR. 

Back to Lewiston and the crisis of 2008... instead of closing the plant, laying off about 40 people suddenly and paying corporate severance, we worked over several months to be able to sell the plant for the depreciated value of the equipment on our books, and the assumption of our lease, to its former owner, Mike Rancourt, thereby allowing Mike to keep the people and to re-start his family business. I knew he'd be a small competitor to us going forward, but shutting the plant would have been the end of shoemaking and jobs for too many people. Mike has done nice work since 2008 with his family helping out. Frankly, as you can tell, finding another way to deal with that problem, other than the usual route of plant closure, is something for which I'm most proud of our team. I speak about "find the other way" when I speak to MBA students. 

SG Oscar Wilde -- we don't know each other and I've hesitated to call you out in the past. Your continued negativism really does nothing to create or sustain US jobs, it actually hurts them by casting your dispersions on what we can really do. How about a little slack for what we're trying to accomplish here in the face of the 98% of shoes and apparel bought in America that are made in America (The American Apparel and Footwear Association's data)? I'd appreciate it.

Paul


----------



## mreams99 (Jan 7, 2015)

Paul,

Thank you for your answers, and for everything else.
Have a merry Christmas!


----------



## SG_67 (Mar 22, 2014)

AllenEdmondsCEO said:


> Regarding our DR boat shoe production and Lewsiton -- here's the full story. In 2008 at the depths of the economic crisis -- globally and on a micro level at AE -- we had to make cuts to survive and keep our loans. Our revenues were down a third since 2006 and we couldn't pay our interest on our loans. The boat shoes we made in Maine didn't sell much against Chinese imports. I worry about all of our jobs everyday, including the shoemakers but also all of those who bring our products to market and sell them. Boat shoes in the DR can be sold at competitive prices in our stores while still retaining th higher quality leathers and superior longevity we're known for. The DR is an American ally in our hemisphere (Monroe Doctrine anyone?), just a few hundred miles on a flimsy refugee raft away from south Florida. I'm almost as proud of the livings and jobs we sustain down there as I am in PW. (It does us no good for America to hog the prosperity ball in the Western Hemisphere.) What we're best at and will always be best at in the US is calfskin Goodyear welted dress shoes. We'll continue to grow employment in our Wisconsin plant by growing our brand and customer base for that core product through more stores and more online exposure. We'll also keep supporting higher-end US production in belts, business leathers, sport coats, socks and outerwear like our great shearling coats. We've created jobs at our US non-shoe suppliers, including requiring the return onshore of equipment for US production. But we can't sell enough $250 US boat shoes to justify the inventory across 70 stores and missed sales on those products are missed commissions for our US salespeople, and a chance for competitors to serve our customers. I never liked to lose in baseball, but I really hated not getting to play because of a forfeit. We decided to quit forfeiting the boat shoe and driving mocc game by getting competitive in the DR.
> 
> Back to Lewiston and the crisis of 2008... instead of closing the plant, laying off about 40 people suddenly and paying corporate severance, we worked over several months to be able to sell the plant for the depreciated value of the equipment on our books, and the assumption of our lease, to its former owner, Mike Rancourt, thereby allowing Mike to keep the people and to re-start his family business. I knew he'd be a small competitor to us going forward, but shutting the plant would have been the end of shoemaking and jobs for too many people. Mike has done nice work since 2008 with his family helping out. Frankly, as you can tell, finding another way to deal with that problem, other than the usual route of plant closure, is something for which I'm most proud of our team. I speak about "find the other way" when I speak to MBA students.
> 
> ...


Not casting dispersions at all and I'm all for made in America. I have no doubt that AE will continue to produce domestically. But like every business you, and now the new owners, will attempt to maximize profit. Which means that you'll likely look to offshore production as one solution. That's all I'm saying.

And now that we're engaged, why did the Bleecker boot leave the line up. You guys had a really nice product and poof! It's gone.

My problem with AE is not the business model. On the contrary, I base most of my critique as a consumer and more and more I'm seeing less and less attractive shoes in the line up.


----------



## Peppercorn78 (Aug 2, 2014)

Paul, I appreciate your dialogue here, and your stewardship of AE, but I have a personal bone to pick with you. Last spring on Reddit, you personally promised me a comeback for the amazing Shaker Heights boot this fall. WHAT HAPPENED??? 

LOL


----------



## CSG (Nov 22, 2011)

I'd like to see Paul address the quality concerns I mentioned earlier in this thread. This is something that has been discussed here over and over.


----------



## crispyfresh (Jan 30, 2016)

As long as they keep the core group, I am OK with them outsourcing.


----------



## Nick V (May 8, 2007)

Mr. G--

Thank you for your transparent explanations of the latest transaction and the intent of your future plans for AE. I,m not surprised.

I would like to share my experiences with AE past and present.
Being behind the shoe repair counter I have been dealing with the AE product for over 40 years. I am very familiar with the AE customer as well.

When Goldner purchased AE (under Mr. Grangaard's leadership) they purchased a company in decline.
From what I saw it was a company that lost it's focus. Nothing new in the way of styles, new shoes were falling apart, customer service was non existent. They're reputation was quickly declining and, deservedly so. People forgot that.

Following Mr. G's interim position of temp. CEO He asked off the board at Goldner to become full time CEO of AE. This was a huge commitment for a person to leave his forte in order to pursue what He apparently saw as a great opportunity to rebuild a company with an outstanding American heritage. If it was only about the dollars He could and would have moved the company off-shore then. After the Brentwood transaction He could have done it then as well.

Under Mr. G's (and His team's) leadership AE has made tremendous strides resorting AE's reputation as a great American company. And, let's face it, the climate is now and finally heading that way.....

So, why at this point would Mr. G. shift gears, go off-shore, water-down/dismantel the company? It defy's logic after such a commitment when the odds were against Him. Makes no sense to me.

As I see AE today, they are focused, they have they're finger on the pulse regarding consumer expectations, they are willing to try some new things, customer service is exceptional, they expanded their market to the younger gen. while keeping their core market and, more...

Again to the naysayers, maybe you watched the movie "Wall Street" to many times. What you are printing is negative speculation and only that negative speculation with no basis -or- under Mr. G's leadership has proven no merit. We need more U.S. business leaders like Him.


----------



## eagle2250 (Mar 24, 2006)

^^+1!
While I am not in the shoe business, as a 45+ year customer of Allen Edmond's, I have been and will remain a fan of the brand I suspect for the rest of my days. Their shoes have seen me through careers in both the USAF and in law enforcement. Thank you AE for your Leeds shoe design! I've always gotten good value for the money spent and while on a couple of occasions their customer service has told me things I didn't want to hear, they have always been straightforward and honest with me. I can't ask for much more than that. Paul has been as open and up front with us as any CEO that I am aware of and he has achieved much at AE in terms of bringing the company back and opening options up to it's customers. I know nothing of the CEO of Caleres, but Mr Grangaard has gotten my trust the old fashioned way...he has earned it. if he says this is a positive development for AE, I for one believe him!


----------



## oxford (Feb 24, 2008)

*Welcome to GLOBALISM*

It is all about money and Allen Edmonds Execs took the money and ran as have many others. The brand will soon be found at department stores and discount shoe retailers. They are not concerned for the American worker or customer. I quit buying Trad Clothes when they went to side vents to obsolete the items I own in order to get me to begin buying all over. It is all about trends and marketing. Widen those lapels or narrow them. Widen the trouser legs or narrow them Keep buying Gentleman, since I retired I go to Wal Mart.


----------



## fishertw (Jan 27, 2006)

MNJ83 said:


> The article quotes Grangaard as saying "this is what he has been looking for the past 8 years" ....ha. He had me fooled. I wonder if he will be making any more
> posts around these parts.
> 
> The writing is indeed on the wall. AE was not sold of to Alden or to a Northampton great. It was sold of to a maker of cheap Asian made shoes that are the opposite of everything that AE represents. I can't think of anyone worse to have acquired AE.


I was ordering a pair of Leeds from one of their outlets last night via phone. When I mentioned the buyout the sales person said that they were all pretty anxious about what the future holds for continuing US made shoes by AE. There was a great awareness of the liklihood of dramatic change in the company. All I can say is that I have always received great service from all avenues of AE and am sorry to see this happening to another great brand.


----------



## Avers (Feb 28, 2006)

Interesting discussion and no new posts since Dec of last year.

It seems the new owners are all about the growth, but there's no growth potential in AEs core business - high end dress shoes. Number of people who wear suits - AEs client base - keeps going down. In addition prices are going up (hello $400 shoes), which further limits the market. 

The only place for growth is to expand into lower price / lower quality lines. As said in above posts - most likely there will be two quality tiers - made in the US and outsourced. Who knows how long will they co-exist. This will certainly do some damage to the brand.

I personally don't have good feeling about AEs future. I hope I am wrong. In any case - I have enough of quality AE shoes (many never used) in my closet to last me for decades.


----------



## Doctor Damage (Feb 18, 2005)

Oldsarge said:


> Those who have the ability and the drive to learn serious skills will still do well but for the rest the future is bleak.


I'm not sure what Americans will do when 80% of them are permanently unemployed and their children and grandchildren will never have a job.


----------



## Doctor Damage (Feb 18, 2005)

Avers said:


> Interesting discussion and no new posts since Dec of last year.
> 
> ...
> 
> I personally don't have good feeling about AEs future. I hope I am wrong. In any case - I have enough of quality AE shoes (many never used) in my closet to last me for decades.


I can't believe I missed this thread. I agree, this doesn't bode well, unless the new owners are hands-off people who are just bringing money. But I don't think anyone is hands-off these days -- we seem to live in a world in which everyone with lots of money thinks they're an expert on everything or that their skills and experience is transferable to everything.


----------



## Doctor Damage (Feb 18, 2005)

crispyfresh said:


> With the internet, competition is fierce. I can even see the new owners closing the brick and mortar stores. Again, i don't want that to happen, but its a different world in retail. Just be glad Alen Edmonds is still around unlike numerous companies that have went under. For instance, DuckHead, a brand many southerners know from the 80s, tried to make a comeback a couple years ago. They are already in limbo again. Bills Khakis is in trouble. Its the way it is now.


But at least Jeff Bezos is doing fine. Isn't that enough?


----------



## pcunite (Nov 20, 2006)

It was sometime in 2006 that my last pair of US made shoes had totally fallen apart. It was a pair of Bostonians made in 2000 I think. At the time, I think I paid $100 for them. I did not know a lot about shoes, but I knew I wanted something that was sharp looking, hard wearing, and was a good value (not Veblen).

At the time, I just intrinsically thought that an American made shoe would give me this. So, I went out and bought a pair of Bostonians (online I believe). I was shocked to learn that most of the American shoe manufactures were shadows of themselves (Florsheim, Johnson & Murphy, and now my beloved Bostonians). These were the brands my grandfather's generation wore. Men who were tall, worked hard, and had awesome shoes when they dressed up. But I'm living in a different world where things like "honor" get lost to the "maximizing profits" business plan.

People shed blood to build this nation so us younger folks could sell out all she's worth to anybody with a nickel. We gotten have big houses and drive big cars before we're 30 ya know! Then the whole yacht thing.

So, I searched until I came across this forum and thus the Allen Edmonds brand. I've been very happy with the value, until they hit the $400 price point! They are everything I remember the older brands to be. Now, over a decade later, I don't care too much which country an item is made in, only that it is the best it can be, and the people behind it are taken care of. I'm glad to know that Indian people can be lifted out of poverty for example.

I do wonder though &#8230; in the future, how will young people be able to discover what a "good value" is? I'll tell you how. From creating their own brands. Old brands will not be able to be trusted anymore.

Allen Edmonds has been sold how many times since 2006? $400 for a pair of shoes to wear to my daughter's wedding? Come on! Okay, okay &#8230; I think the most I've spent was $300, I always tried to get seconds, so &#8230; I was never the target. I think I've bought something like 12 pairs of AE shoes. They just seemed so nicely made.

These days I'm kinda having a reaction to whatever being dressed up means. Seems to be something I don't care for. It's sure not about being an honorable upstanding person. So, I'm into these now and my AE's gather dust. Much more comfortable too.


----------



## pcunite (Nov 20, 2006)

In continuation …

Shoes can be made anywhere as far as I'm concerned, as long as the quality is good. But Allen Edmonds shoes are supposed to be American made, right? As to quality, who will hold them accountable? Who of its leaders will be able to abstain from the temptation to obtain personal gain over something opaque like American Heritage? Will they turn into a Florsheim? 

We don't know. It's probably not going to matter. I just know that I can't admit to having a $400 pair of shoes on my feet without being able to explain why they cost that amount. The answer can't be "because an American has a job". That is disingenuous and you know it.

Should AE be forced to be made in America? Should they be forced to be a good value? We did not force all the other brands. Perhaps it's best we let the company do what it thinks is best, and if they do so honorably, we support them.

The real standard bearers for the American ideal was actually above the corporations. It is that body which can be a help to companies like AE, and to the American worker, in my opinion.


----------



## Oldsport (Jan 3, 2012)

My God. You're going to have to summarize that into a point...


----------



## pcunite (Nov 20, 2006)

Oldsport said:


> You're going to have to summarize that into a point ...


The USA made shoe brands of ole became something different and younger folk mistake them to be quality dress shoes. Allen Edmonds claims to not be doing this, and I thank them for that. However, there is the appearance of a future event where they'll be pricing themselves into market segmentation ... which would be an ill-fated attempt to have their cake (American Heritage and high end at $400) and eat it too (become the new Florsheim with $150 offerings).

If they go this route (tier 1, tier 2, you have more money? Well you need to buy tier 3!) they'll just dilute the meaning of an old American name into nothingness. If played correctly, the investors make a mint and trash a brand. Buy hey! Who cares? This destructive process can take twenty years. The investors will still get what they wanted!


----------



## FLMike (Sep 17, 2008)

Blah blah blah death to capitalism blah blah


----------



## FLMike (Sep 17, 2008)

Oldsport said:


> My God. You're going to have to summarize that into a point...


I like your pre-edit comment better.


----------



## SG_67 (Mar 22, 2014)

We're talking about shoes, right?


----------



## 215339 (Nov 20, 2012)

I'm relatively late to the AE party, but I've noticed there is not much consistency outside of the core shoes.

Ex: Where are the non-cordovan Leeds?

I'm also noticing weekly sales, and there doesn't seem to be much difference between seconds quality shoes and first quality shoes.


----------



## clee1982 (Jan 10, 2009)

So based on what I read so far, we want cheap shoes, made in America, decent quality, always on discount...?


Sent from my iPhone using Tapatalk


----------



## FLMike (Sep 17, 2008)

Huh?

.


----------



## smmrfld (May 22, 2007)

clee1982 said:


> So based on what I read so far, we want cheap shoes, made in America, decent quality, always on discount...?


Your reading skills require some remediation. :icon_scratch:


----------



## clee1982 (Jan 10, 2009)

Well, we want made in America, check, complain about price increase and most of us buy on discount (my definition of cheap), also check, since no one wants bad quality, so what am I missing?


Sent from my iPhone using Tapatalk


----------



## jpm1shoes (Jul 6, 2017)

Interesting to go back and read this. 8 Months after the sale, some casual welts, formerly made in the US, are now being made in the DR. This is quite a departure given that the DR plant was reserved primarily for boat shoes and driving mocs. I don't believe any GYW production had occurred in the DR previously. 

In addition, two new non-recraftable Clarks-esque styles are made in Italy and selling @$295....


----------



## YukonCornelius21 (Oct 28, 2009)

Support Rancourt!


----------



## crispyfresh (Jan 30, 2016)

Rancourts are great shoes , but pricey. I'm sticking to Allen Edmonds shoebank and sales instead...


----------



## SG_67 (Mar 22, 2014)

I don't own any Rancourt and can only go off of what I see online, however, the retail price seems to be somewhat on par with AE. They are certainly smaller and don't have quite the distribution that AE has, but a good option nonetheless. 

I've said this before, but after one has the basics covered, there's really little else that AE can offer that is of any interest. Certainly nothing on offer that cannot be had elsewhere.


----------



## Flanderian (Apr 30, 2008)

I'm sure everyone (But me!) knows this already but Mr. Grangaard is evidently gone.

See post #34 at below -

https://askandyaboutclothes.com/com...4-Allen-Edmonds-Factory-1sts-QA-failure/page2


----------



## FLMike (Sep 17, 2008)

AllenEdmondsCEO said:


> Good Dr Livingston -- You underestimate my ability to judge people and their character, sir. I'm not worried about what you worry about , and I have the first hand experience to make the judgment. Trust me on this one. And thanks for your support over the years.
> Paul


Intersting to look back at some of the bold, reassuring comments made by Paul G. in this thread, in light of the recent talk of his departure from AE.


----------



## Fraser Tartan (May 12, 2010)

_Caleres names president for new men's, international division_ (St. Louis Post-Dispatch)

_Caleres has hired Malcolm Robinson to lead the shoe retailer's new men's and international division as president._

https://www.stltoday.com/business/l...cle_6ae6dc68-be55-5418-8109-faeb092613af.html


----------



## twoinhandknot (Jan 25, 2017)

So uh... I'm guessing this would be a good time to stock up?


----------



## Fraser Tartan (May 12, 2010)

From 1992 to 2011, Malcom Robinson was at PVH Corp. (Phillips-Van Heusen) where he was Group President Sportswear and managed PVH Heritage Brands including Timberland and G.H. Bass.


----------



## Fraser Tartan (May 12, 2010)

twoinhandknot said:


> So uh... I'm guessing this would be a good time to stock up?


Here are my predictions. :teacha:

1) Allen Edmonds will offer a limited selection of premium made in USA shoes such as the Park Avenue. They'll be more expensive and not as good as today's product.
2) Most Allen Edmonds shoes will be imported and be made in the same factories as other Caleres footwear brands.
3) Allen Edmonds factory seconds as we know them will be going away.
4) The Allen Edmonds clothing experiment will end.
5) Famous Footwear, owned by Caleres, will add Allen Edmonds to their line-up and eventually become the largest retailer for Allen Edmonds. But, they won't carry any made in USA models.
6) Fans of corrected grain leather will have more models to choose from.


----------



## poppies (May 11, 2017)

Fraser Tartan said:


> Here are my predictions. :teacha:
> 
> 1) Allen Edmonds will offer a limited selection of premium made in USA shoes such as the Park Avenue. They'll be more expensive and not as good as today's product.
> 2) Most Allen Edmonds shoes will be imported and be made in the same factories as other Caleres footwear brands.
> ...


This seems a painfully accurate possibility.


----------



## crispyfresh (Jan 30, 2016)

I need to jump on a couple of shoebank shoes before the 404 error message comes up... I know where this is headed...lol


----------



## SG_67 (Mar 22, 2014)

poppies said:


> This seems a painfully accurate possibility.


Agreed. They will soon be on par with J&M and Cole Haan.


----------



## Andy (Aug 25, 2002)

Flanderian said:


> I'm sure everyone (But me!) knows this already but Mr. Grangaard is evidently gone.
> 
> See post #34 at below -
> 
> https://askandyaboutclothes.com/com...4-Allen-Edmonds-Factory-1sts-QA-failure/page2


Paul has "retired" but will stay on several months to help with the transition.


----------



## clee1982 (Jan 10, 2009)

It's not like AE makes amazing shoe (at retail, though they do go on discount all the time) even their independence collection has mediocre finish compare to CJ/Carmina


Sent from my iPhone using Tapatalk


----------



## crispyfresh (Jan 30, 2016)

clee1982 said:


> It's not like AE makes amazing shoe (at retail, though they do go on discount all the time) even their independence collection has mediocre finish compare to CJ/Carmina
> 
> Sent from my iPhone using Tapatalk


AE shoes that are discounted are the best deal in the shoe world..


----------



## clee1982 (Jan 10, 2009)

5 years ago I agree with you, now lots more Goodyear manufacture, and they do go on sale as well, though none have AE type of distribution channel


Sent from my iPhone using Tapatalk


----------



## Hayek (Jun 20, 2006)

I think that all of this pessimism is unwarranted but typical of this community's reaction to any moderate change that happens at any one of our favorite companies.

The cheap/foreign made shoe market is already overcrowded. I fail to see how or why AE would want to play in that space when they already have a fine niche as the "cheapest 'good' shoe" on the market and a devoted following.

It would not shock me if they outsourced more of their low end models and cut their selection down a bit, but if the quality goes down, they really have very little else to go on. It's not like they're a well known luxury brand like LV, Gucci, Polo, etc. that can easily sell out by selling loads of cheap stuff to the masses.

This reminds me of the concerns everyone had about Bill's outsourcing all of their manufacturing and throwing quality out the window in order to have wider distribution. What would be the point? I have a hard time seeing them compete with the Vineyard Vines and Polos of the world when the only people that buy Bill's buy them specifically for their high quality.


----------



## barca10 (Apr 21, 2012)

SG_67 said:


> Agreed. They will soon be on par with J&M and Cole Haan.


It seems like that is what most people want.


----------



## winghus (Dec 18, 2014)

clee1982 said:


> 5 years ago I agree with you, now lots more Goodyear manufacture, and they do go on sale as well, though none have AE type of distribution channel
> 
> Sent from my iPhone using Tapatalk


What Allen Edmonds has that no one else does at similar price and quality is they make every last in every width. European companies don't do that, at most they offer two widths on a few lasts. I can generally get any AE shoe in AA A B C D E EE and EEE in every size from 5.5 to 13.5. I can walk into a store locally and try them on also. I don't live in NY City so access to foreign makes in person isn't possible. I agree with most of the criticisms of AE but it's just about the only quality option for a lot of the US under $400 and with the shoebank, even better prices.


----------



## Centaurus3200 (Jun 12, 2017)

AE will probably be like Dr. Martens. Most made overseas... But a small "vintage line" still made at their old factory.


----------



## Mike Petrik (Jul 5, 2005)

Hayek said:


> I think that all of this pessimism is unwarranted but typical of this community's reaction to any moderate change that happens at any one of our favorite companies.
> 
> The cheap/foreign made shoe market is already overcrowded. I fail to see how or why AE would want to play in that space when they already have a fine niche as the "cheapest 'good' shoe" on the market and a devoted following.
> 
> It would not shock me if they outsourced more of their low end models and cut their selection down a bit, but if the quality goes down, they really have very little else to go on. It's not like they're a well known luxury brand like LV, Gucci, Polo, etc. that can easily sell out by selling loads of cheap stuff to the masses.


Agreed. Entering the already crowded J&M and Cole Haan space seems like bad business for a non "luxury" brand. My bet is on your prediction.


----------



## TimF (Aug 21, 2016)

Centaurus3200 said:


> AE will probably be like Dr. Martens. Most made overseas... But a small "vintage line" still made at their old factory.


Once they move overseas, they move fully overseas. They cannot justify the fixed costs and capex of keeping Wisconsin factory if it only generates a small part of revenue. They might do a limited run "partnership" with the likes of Rancourt, that's it.


----------



## blue suede shoes (Mar 22, 2010)

TimF said:


> Once they move overseas, they move fully overseas. They cannot justify the fixed costs and capex of keeping Wisconsin factory if it only generates a small part of revenue. They might do a limited run "partnership" with the likes of Rancourt, that's it.


J & M keeps a small line made at their factory in TN, while making the great majority of their shoes overseas.


----------



## Mike Petrik (Jul 5, 2005)

TimF said:


> Once they move overseas, they move fully overseas. They cannot justify the fixed costs and capex of keeping Wisconsin factory if it only generates a small part of revenue. They might do a limited run "partnership" with the likes of Rancourt, that's it.


AE is profitable and among the best values on the market. If you are right the new owners would have to conclude that migrating from a successful niche to the commoditized world of inferior footwear would yield higher profits. I don't see why that would be the case.


----------



## FiscalDean (Dec 10, 2011)

clee1982 said:


> 5 years ago I agree with you, now lots more Goodyear manufacture,
> 
> What? Isn't goodyear manufacturing a good thing?


----------



## Fraser Tartan (May 12, 2010)

I forgot that Allen Edmonds has a factory in the Dominican Republic. There have been recent reports of some formerly made in USA Goodyear welt models being made there. That could be a sign of things to come for the rest of their Goodyear welt production.


----------



## Mike Petrik (Jul 5, 2005)

FiscalDean said:


> clee1982 said:
> 
> 
> > 5 years ago I agree with you, now lots more Goodyear manufacture,
> ...


----------



## FiscalDean (Dec 10, 2011)

Mike Petrik said:


> FiscalDean said:
> 
> 
> > He is not suggesting otherwise. He is responding to the previous post and quibbling as to whether discounted AEs still represent the best value in the shoe world, presumably since the last decade has seen quite a few new entrants into the quality men's footwear market. He makes a fair point, but on top of the distribution channel none of these competitors remotely offers the array of styles and, most especially, sizing options. Its chronic quality control challenges notwithstanding, AE really is pretty special.
> ...


----------

