Automotive Aftermarket and the Shoe Business

Saint Louis has a long history with the Shoe industry. In the early 1900s, St. Louis was known as “first in shoes, first in booze and last in the American League” (the latter was a reference to the poor performance of the St. Louis Browns baseball team. Over the years, this saying was later changed to the snappier “Shoes, Booze and Blues.”)

The parallels between what the American Shoe industry went through in the 1980s and what the Automotive Aftermarket is going through today are obvious. As with the Automotive Industry, cheap labor greatly impacted profitability of American shoe manufacturing.

It's very interesting to see how two large St. Louis shoe manufacturers reacted to this threat. The first one, International Shoe was once considered the largest footwear manufacturer in the country with strong brands such as Red Goose and Poll Parrot. (Don't hear much about those "strong brands" today, do you?)

International Shoe's response was to use a strong cash position to diversify into other businesses until, in 1987, they were almost completely out of the shoe business. After a troubled divesting effort resulted in Chapter 11 reorganization in 1991, the company finally focused on the furniture business. This is from their website:

Furniture Brands is now established as the largest residential furniture manufacturer in the country with six of the industry’s most recognizable brand names [...]. As the company pursues opportunities in offshore sourcing and strengthens its dedicated distribution — particularly single-branded stores — Furniture Brands is transforming itself from a mere furniture manufacturer to a branded consumer products company, with a heightened focus on its brand names and on its direct relationships with the furniture consumer.

Scary... sounds like they keep learning the same lessons.

The second story is quite a bit different. Brown Shoe was also a St. Louis based company that grew with the fortunes of the industry. Like International Shoe, they grew through acquisition as well. The difference was, they purchased mostly footwear or closely related businesses. When cheap foreign manufacturing arrived in the mid 1980s, they established an “international” division and began a “decade-long strategic repositioning” that included selling any non-footwear businesses and closing all domestic manufacturing plants.

The result? This last year Brown Shoe announced record earnings.

Kind of makes you think, doesn't it? Maybe the Automotive Aftermarket has something to learn from the experiences of the footwear industry. After all, they once had a big business in reman shoes too.

AAIA Meeting in Atlanta

Just back from a quick one-day meeting in Atlanta with the Technology Standards and Solutions Committee of the AAIA. (They really need to change that committee name again!) This was my first meeting as Chairman of the ACES sub-committee and I had a great time.

It was good to see so many turn out for this meeting because it wasn't a scheduled event with the full Association. It was especially nice to see Ron Larson back "in the fold" after his dalliance in another, much less interesting industry than ours. Welcome back Ron... Wrenchead is lucky to have you.

I really enjoyed the presentations updating the technology initiatives. It's obvious to me that ACES is finally reaching critcal mass. iSHOP2 and IPO both depend on it, and with SEMA's recent interest and support, I believe the ship is finally sailing.

Which is why everyone was so interested in the meeting held the day before at NAPA for all data receivers. At the Committee meeting the next day, Mark Hickman spoke for the group. He said it was a productive meeting that generated several positive recomendations to be announced in the next few weeks. We can only hope it will help to improve ACES adoption.

Thanks to everyone who attended for a great meeting.