Home > International Directory of Company Histories > New Balance Athletic Shoe, Inc. - Flourishing in the 1990s and Beyond

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Flourishing in the 1990s and Beyond

By the mid-1990s New Balance was again a thriving enterprise recording encouraging financial gains. Revenues in 1995 were up to $380 million and successful forays into apparel and a variety of athletic footwear niches had been completed. At the company's five, company-owned manufacturing facilities in Massachusetts and Maine, running, walking, cross-training, tennis, basketball, and hiking shoes were assembled, giving the company wide exposure to a variety of popular recreational activities during the 1990s. When annual sales jumped to $474 million in 1996 and New Balance ranked as one of the top six best-selling footwear brands in the world and one of the top five domestically, Davis set his sights on reaching the $1 billion sales mark by 2000. Toward this end, the company made encouraging progress in 1997, when sales increased to more than $550 million. During the year, as many of the company's competitors recorded lackluster growth, New Balance exuded confidence that years ahead would bring continued success. The company established a new factory in Norway, Maine, and opened a $15 million distribution center in Lawrence, Massachusetts. To reach its goal of $1 billion in sales by the beginning of the new century, the company intensified its advertising efforts, setting aside $13 million for advertising in 1998 compared with the $4 million spent in 1997. On this ambitious note, the company prepared its plans for the future, confident that the awareness of the New Balance brand name would increase as sales climbed toward the $1 billion goal.

By the end of 1998 New Balance had transformed into one of the top five players in athletic footwear. Demand for New Balance shoes had increased such that in order to fill demand, the company had subcontracted a good portion of its manufacturing work overseas. Chairman and CEO James Davis planned to more than triple the amount of money put in to advertising New Balance shoes, focusing the ads on lifestyle and still steering clear of celebrity endorsements. In June 1998 New Balance made its first offering in the private placement market. Interest was so pronounced that the transaction rose from $50 million to $65 million. Come September 1998 New Balance purchased the Dunham brand name and prepared to launch into the business of boots, specifically outdoor, hunting, work, and sports boots. Davis announced that Dunham would become a new brand under the New Balance umbrella. Dunham would continue to manufacture their product, but New Balance would increase its distribution. All of Dunham's 33 boot models would endure.

Throughout 1998 athletic shoes were in a near universal slump, and all companies that produced them except adidas and New Balance were losing money. New Balance was up 15 percent from their profits in 1997. While they enjoyed fiscal health, New Balance, like other show manufacturers during this time, found itself accused by the Union of Needletrades, Industrial, and Textile Employees (Unite) of contracting out to Chinese workers employed in sweatshop-like conditions, in direct contrast to the claims of New Balance. A spokesman for New Balance countered that the company employed consultation firms to ensure that human rights were not violated in any of their production plants, that many of the shoes made overseas were sold overseas, and that some 70 percent of its manufacture still occurred in the United States, a comparatively high rate.

During this time, New Balance surged forward to become the fourth largest athletic shoe company. In March 1999 the company launched a new marketing campaign for their kid's line of athletic shoes on Nickelodeon. Ground was broken on the company's new corporate headquarters in May 1999, although the company remained in Boston. By August 1999 it relaunched the Dunham boot brand with variable widths, one of the company's most successful features in its athletic shoe line. January 2000 saw two important additions to the company: a California manufacturing plant employing 250, and a new president and chief operating officer, Jim Tompkins, a vice-president with New Balance, who reported directly to CEO Davis. In fall of 2000 New Balance seemed poised to achieve some success with a new line of apparel. The market for apparel had been universally soft, but New Balance remained optimistic.

New Balance announced in April 2001 that a newly created division, Aravon, would specialize in the production of orthopedic shoes, product to be available by spring of 2002. As part of expansion efforts, CEO Davis also signed several licensing agreements for the New Balance logo, though, unlike Nike and other popular rivals, he and his company declined to sign sports stars to multi-million-dollar endorsement deals. Instead, Davis stayed the course that had built the company, emphasizing the quality and design of New Balance shoes rather their stylistic appeal. Nor did New Balance target young consumers with the same zeal of its rivals. By 2003, the company was ranked third among athletic shoe manufacturers, capturing an 11 percent share of the market. In February 2004, the company acquired lacrosse equipment manufacturer Warrior and became a sponsor of major league lacrosse in the United States.

1. Introduction
2. Early 20th Century Origins
3. New Ownership in the 1970s
4. Energetic Growth Begins in the Mid-1970s
5. New Balance Falters During the Late 1980s
6. Flourishing in the 1990s and Beyond
7. Further Reading
8. Copyright Page
9. About Page