Allen Edmonds gains footing in China

Exclusive shoemaker plans to open 12 stores

Former US presidents Ronald Reagan, George H.W. Bush and Bill Clinton are all familiar with Allen Edmonds, or more particularly, its black-toecapped leather shoes. The high-end shoe manufacturer, based in the state of Wisconsin, is now hoping the rest of China can look similarly stately.

The upscale men's footwear brand is betting on the world's second-largest luxury goods consumer market with an ambitious plan to open up to 12 stores in China over the next five years.

To usher in its new venture, it has already attracted one big name in China with a pair of really big feet - Yao Ming. Allen Edmonds custom-made size 19 brown shoes for the Chinese basketball legend were presented at Beijing's historic Qianmen Street earlier this month to launch the brand's fall/winter 2012 collection in China.

"When I think of China, I think of 2.6 billion feet. We don't want to lose the big and potential market," says Paul Grangaard, president and CEO of Allen Edmonds Shoe Corp.

Allen Edmonds' first store in China will open in mid-November in Shanghai's Grand Gateway shopping mall in the city's Xujiahui district. A store will open in Beijing next year.

"We are scheduled to have at least six to 12 flagship stores and over time, 40 or 50 stores in China in the next five years," Grangaard says.

It operates 47 retail stores in the United States and manufactures all of its shoes in the US. It recently signed a 10-year licensing agreement with Talent Creations, a Shanghai-based supply chain management company. Under the agreement, Talent Creations will open Allen Edmonds stores and sell its shoes, accessories and apparel in China.

The reason for the partnership was obvious to Grangaard - he's still trying to figure out China's market.

"I'd rather work with someone who can help us with managing, marketing and employment problems," he says.

In the US, Allen Edmonds shoes are available in high-end malls such as Nordstrom and Macy's. The brand is currently sold in 25 markets, including Canada, the United Kingdom, France, Germany, Italy, Norway, the Netherlands and Japan. Its shoes are sold in more than 2,000 retail stores across the world.

After amassing revenue of $102 million (80.2 million euros) last year, a reported annual growth of 24.4 percent, the shoemaker hopes its expansion into China's marketplace will double its current business.

"We do already have a lot of Chinese customers in the US as businessmen travel a lot. We are not totally unknown here, we just need to get the word out," Grangaard says.

Its expansion plan, under the marketing angle that its shoes are "Made in the USA", is to open direct stores in China's major cities, while in less-populated cities it will open a mixture of direct stores and franchises.

"Only 1.6 percent of the shoes sold in the US today are made in the country. A large percentage of those are made in China," he says. "This is very unique in the marketplace that we stick to making shoes in the US."

Positioned as an entry-level luxury brand, Allen Edmonds will retail its shoes at an average price of $500 in China. Grangaard says its target customers in China are the same as in Berlin, Rome, Paris and New York. Its customers are professional men who have a strong image in the public spotlight, Grangaard says.

"They are smart buyers because they will recognize that they can wear them for more than 10 years," he says.

Most of the craftsmen working in the company's factory at Port Washington are more than 60 years old. Each pair of Allen Edmonds shoes is made according to the company's 212-step process with over 100 artisans cutting, fitting and sewing the shoes.

Allen Edmonds supplied shoes for officers in the US military in the 1940s. After World War II, as the demand for men's footwear with an expanding workforce rose, Allen Edmonds shoes grew in popularity among young consumers. George Clooney and Leonardo DiCaprio are among the brand's loyal customers.

"We will make Chinese customers know more about us through those movie stars that are well known in China," Grangaard says.

Founded in 1922, Allen Edmonds employs more than 700 people at its factory with 120 of them added in the past two years because of the company's expansion strategy.

"China is certainly an important part of that. And the development of the Chinese market will also create some jobs in the US," he says.

To better cater to the Chinese market, the company is decorating its stores with darker and richer colors to impress upon consumers that it is an exclusive brand. Grangaard says that after the brand establishes itself, it will create more sales channels, such as wholesale retailers in second and third-tier cities. E-commerce is also on the agenda - it launched a Chinese version of its website in May.

Although it is planning to build its brand image first through formal and casual shoes, the company is extending its portfolio to apparel, ties, belts, raincoats and other accessories.

"In China, we have also caught the trend that men are paying more attention to their looks all week long. The best way to have the belt really match the shoes is to have it designed with the same leather, polish and color," he says.

Grangaard admits that Italian shoes have set the standard for the past 30 years but says vintage American styles have been more popular in Milan and Florence recently.

"Styles go in waves, and the wave now is elegant brogues, burnished plain toes, plain or perforated captoes, bluchers, balmorals, Venetian slip-ons, chukka boots - that bring to bear an all-American sensibility," Grangaard says.

yaojing@chinadaily.com.cn

(China Daily 06/22/2012 page21)