Famous Footwear to leave Madison
Madison, WIMike Ivey %u2014 4/11/2008 9:11 am
Brown Shoe, the parent company of Famous Footwear, is consolidating its corporate headquarters in suburban St. Louis, a move that will cost Madison some 270 jobs. The company announced Thursday that it would begin immediately closing its offices at 7010 Mineral Point Road and moving those positions to Clayton, Mo. It plans to complete the move by the fall of this year.
Employees here will be offered jobs in St. Louis or a buyout package of 1.5 weeks of pay per year of service. The company also will offer relocation or outplacement assistance.
"Moving our Madison office, which has the smaller population of the two, will be the least disruptive to our business and our employees, enabling us to continue providing great products and service to our customers," said Famous Footwear President Joe Wood. "Nevertheless, we understand this will be difficult for some of our people, and we are committed to easing this transition for them."
Wood, who will be relocating himself, said it was too early to determine how many people might make the move to St. Louis.
Famous Footwear also employs about 130 people at its 750,000 square-foot distribution center in Sun Prairie. The firm also operates four retail stores here. Those operations are not affected by the move.
Brown Shoe said it will consolidate operations at its 12-acre site in Clayton, which houses its current headquarters and approximately 650 employees. Another 500 to 700 positions could be added there over the next few years, it said.
Also, Brown Shoe said it would take advantage of various Missouri economic development programs and eligible incentives totaling more than $43 million.
"This proposed redevelopment project is very exciting for our state and it assures the creation of about 700 new jobs and the retention of 600 existing jobs," said Missouri Gov. Matt Blunt.
Tony Hozeny, a spokesman for the Wisconsin Department of Commerce, said the state worked with Madison officials to try to land the Brown Shoe headquarters, but it wasn't enough.
"We put a very aggressive and complete package together," he said. "We really went after it."
Hozeny would not disclose how much was offered or what sort of package was put together.
Madison Mayor Dave Cieslewicz said today that he was "very disappointed by this decision."
"The city of Madison worked closely with the Wisconsin Department of Commerce, the Greater Madison Chamber of Commerce and others to develop an attractive package of incentives for Brown Shoe," he said. "I personally traveled to St. Louis to make the case for Madison, and city staff and I were in frequent communication with the company."
While rumors of a move have circulated for months, the decision today caught many Famous Footwear workers by surprise.
"We were blindsided today, as the message given a few months ago was that nothing would happen real soon," said an employee who did not want their name used. "We figured it would eventually happen, but thought we had some time."
The Madison area has absorbed the loss of several corporate headquarters over the past few years including Rayovac, American Girl, Lands' End and Nelson Industries. Those companies have maintained some operations here, although top brass is now located elsewhere.
Cieslewicz said despite the loss of nearly 300 jobs, the local economy remains strong.
"Our 3.5 percent unemployment rate is the lowest of any city in Wisconsin, and one of the lowest in the nation," he said. "But today's news reminds us that if we want our economy to remain strong, we need to aggressively implement our new economic development plan and other initiatives."
In the case of Famous Footwear, Brown Shoe announced in 2006 that it planned to consolidate its headquarters at one location. The firm is the 14th largest in St. Louis, with some 12,700 full-time and part-time employees.
It had hired a firm to research either moving its headquarters, expanding at its current site or moving elsewhere. Dallas, Madison and St. Louis had all been mentioned as possible sites.
The company markets shoes under the Naturalizer, LifeStride, Connie and Buster Brown brand names. In 1981, it acquired Famous Footwear, which started in Madison in 1960 as Neil's Factory Outlet Shoes at Todd Drive and the Beltline.
"This move will aid in achieving our vision of being a leading fashion footwear marketer as it will foster collaboration, increase our speed to market and strengthen our connection with consumers," said Brown Shoe Chairman and CEO Ronald Fromm. "Additionally, we believe it will further enable us to attain our goal of doubling our rate of profitability while doubling our sales."
In addition to Famous Footwear history, Brown Shoe has its own Wisconsin link. Fromm is a graduate of UW-Milwaukee and served as executive vice president of Famous Footwear before relocating to St. Louis in 1999.
The company said it expects pre-tax expenses of $25 to $30 million to implement the transition. That includes people-related costs for relocation, severance and retention, as well as asset write-off and lease termination costs.
Established in 1878, Brown Shoe has been part of the St. Louis community for 130 years. Its history includes launching the Buster Brown children's footwear brand at the 1904 St. Louis World's Fair.
Famous Footwear has 1,100 stores nationwide offering more than 80 brands.
Brown Shoe said it will continue its support of major charitable and civic partners in the Madison community for the next three years, and honor all longer-term commitments.
