Allen Ed­monds, stag­ing a come­back, walked in the com­pe­ti­tion’s shoes.

The Washington Post Sunday - - BUSINESS - — Kim­berly A. Whitler Whitler is as­sis­tant pro­fes­sor of busi­ness at the Univer­sity of Vir­ginia Darden School of Busi­ness.

The big idea: When Paul Gran­gaard be­came chief ex­ec­u­tive and pres­i­dent of Allen Ed­monds in 2008, he staged a turn­around of an iconic Amer­i­can brand. The cre­ator of clas­sic, high-qual­ity shoes for men — worn dur­ing the in­au­gu­ra­tion of ev­ery pres­i­dent from Ron­ald Rea­gan through Ge­orge W. Bush — was on the verge of bank­ruptcy. How could the com­pany re­vive sales of its pre­mium qual­ity (and priced) shoes dur­ing the Great Re­ces­sion?

The sce­nario: At the heart of its chal­lenge was a lack of clar­ity of what the com­pany stood for in the minds of cus­tomers, em­ploy­ees and chan­nel part­ners — what the brand should be. This led to prob­lems in all ar­eas of the busi­ness, in­clud­ing po­si­tion­ing, pric­ing, dis­tri­bu­tion, man­u­fac­tur­ing, prod­uct and com­mu­ni­ca­tions. In the 2000s, Allen Ed­monds be­gan de­sign­ing and man­u­fac­tur­ing its shoes over­seas and al­tered the prod­uct (and stores and com­mu­ni­ca­tion) to look more Euro­pean. Gran­gaard asked the se­nior team a few ques­tions: “What do our loyal cus­tomers think of the brand change? What does our tar­get cus­tomer think of our shoes? How do our shoes stack up against the com­pe­ti­tion ?”

The res­o­lu­tion: They set out to gain in-depth knowl­edge of the mar­ket and cus­tomers. The se­nior team vis­ited sev­eral mar­kets; dis­sected, an­a­lyzed and even wore their com­peti­tors’ shoes; and talked with cus­tomers. They wanted to know why loyal cus­tomers had aban­doned Allen Ed­monds. They learned they had to recom­mit to the orig­i­nal brand po­si­tion­ing — as a clas­sic, hand­crafted Amer­i­can shoe com­pany — while adding a con­tem­po­rary and more ca­sual twist. They brought man­u­fac­tur­ing back to the United States, added more ca­sual styles, re­vived four iconic ones, re­designed the stores to com­mu­ni­cate the “Made in the USA” her­itage. The re­sults were strong. From 2006 to 2008, Allen Ed­monds’s sales had de­clined about 30 per­cent, and op­er­at­ing profit fell by 90 per­cent. From 2009 to 2014, the com­pany more than dou­bled its rev­enue.

The les­son: The Allen Ed­monds turn­around was rooted in a deep un­der­stand­ing of the mar­ket­place. If Gran­gaard had fo­cused mainly on in­ter­nal oper­a­tions, he likely would have ad­dressed the chal­lenge in a dif­fer­ent way, per­haps look­ing to in­crease prof­its by re­duc­ing op­er­at­ing costs, raw­ma­te­rial costs and la­bor. These so­lu­tions would have failed to ad­dress the cen­tral prob­lem, which was align­ing the brand and strat­egy with the per­cep­tions of Allen Ed­monds’s his­tor­i­cally loyal cus­tomers.

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