New Balance Athletic Shoe, Inc. (NBAS), best known as simply New Balance, is a footwear manufacturer based in Boston, Massachusetts. It was founded in 1906 as the New Balance Arch Support Company. Eschewing expensive advertising campaigns, it has nevertheless grown to be one of the largest makers of sports footwear in the world.
New Balance is notable in that it has continued to maintain a manufacturing presence in the United States as well as in the United Kingdom for the European market—in contrast to its competitors in the same market space, such as Nike and Adidas, who design products in the US and Europe, but purchase the majority of their Footwear and Apparel from manufacturers in China, Vietnam, and other developing nations. The result of this corporate decision is that the shoes tend to be more expensive than New Balance's competitors. To offset this pricing discrepancy, New Balance differentiates their products with technical innovations, such as a blend of gel inserts, heel counters, and a greater selection of sizes, particularly for very narrow and/or very wide widths.
New Balance Athletic Shoe, Inc., manufactures running, hiking, tennis, basketball, and cross-training shoes, offering its footwear in a broad range of width sizes. New Balance, in contrast to its larger competitors, manufactured nearly all of its footwear in the United States, as opposed to manufacturing its merchandise overseas. The company's five company-owned manufacturing facilities during the late 1990s were all located in Massachusetts and Maine. In addition to its lines of footwear, New Balance also produces a variety of athletic apparel.
New Balance Athletic Shoe runs on its everyman (and everywoman) appeal. Unlike its rivals, the footwear firm shuns celebrity endorsers. By spotlighting lesser-known athletes, New Balance claims to emphasize substance over style. The approach attracts Boomer jock clients who are less fickle than the teens chased by its rivals. Besides making and selling men's and women's shoes for running, cross training, basketball, tennis, hiking, and golf, it offers fitness apparel and kids' shoes and owns leather boot and shoe maker Dunham. It sells its footwear in its own stores and those of specialty retailers. Founded in 1906 as New Balance Arch Company to make arch supports, it's known for its selection of shoe widths
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 save 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 kids 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.
Statistics:
Private Company
Incorporated: 1906 as The New Balance Arch Company
Employees: 2,400
Sales: $ 1.3 billion (2004 est.)
NAIC: 316210 Footwear Manufacturing
Key Dates:
1906: The New Balance Arch Company is founded in Massachusetts.
1961: New Balance introduces the Trackster running shoe.
1972: The company is acquired by James Davis for $100,000.
1975: A new model, the 320, is worn by Tom Fleming during his winning run in the Boston marathon.
1982: Sales reach $60 million.
1991: Sales reach the $100 million mark.
1997: A new manufacturing facility in Maine is constructed.
2004: New Balance becomes a sponsor of major league lacrosse and purchases a manufacturer of lacrosse equipment.
Chairman James Davis E-mail
Vice Chairman and EVP Administration Anne Davis E-mail
President and CEO Robert DeMartini E-mail
Address:
20 Guest Street, Brighton Landing
Boston, Massachusetts 02135-2088
U.S.A.
New Balance is notable in that it has continued to maintain a manufacturing presence in the United States as well as in the United Kingdom for the European market—in contrast to its competitors in the same market space, such as Nike and Adidas, who design products in the US and Europe, but purchase the majority of their Footwear and Apparel from manufacturers in China, Vietnam, and other developing nations. The result of this corporate decision is that the shoes tend to be more expensive than New Balance's competitors. To offset this pricing discrepancy, New Balance differentiates their products with technical innovations, such as a blend of gel inserts, heel counters, and a greater selection of sizes, particularly for very narrow and/or very wide widths.
New Balance Athletic Shoe, Inc., manufactures running, hiking, tennis, basketball, and cross-training shoes, offering its footwear in a broad range of width sizes. New Balance, in contrast to its larger competitors, manufactured nearly all of its footwear in the United States, as opposed to manufacturing its merchandise overseas. The company's five company-owned manufacturing facilities during the late 1990s were all located in Massachusetts and Maine. In addition to its lines of footwear, New Balance also produces a variety of athletic apparel.
New Balance Athletic Shoe runs on its everyman (and everywoman) appeal. Unlike its rivals, the footwear firm shuns celebrity endorsers. By spotlighting lesser-known athletes, New Balance claims to emphasize substance over style. The approach attracts Boomer jock clients who are less fickle than the teens chased by its rivals. Besides making and selling men's and women's shoes for running, cross training, basketball, tennis, hiking, and golf, it offers fitness apparel and kids' shoes and owns leather boot and shoe maker Dunham. It sells its footwear in its own stores and those of specialty retailers. Founded in 1906 as New Balance Arch Company to make arch supports, it's known for its selection of shoe widths
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 save 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 kids 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.
Statistics:
Private Company
Incorporated: 1906 as The New Balance Arch Company
Employees: 2,400
Sales: $ 1.3 billion (2004 est.)
NAIC: 316210 Footwear Manufacturing
Key Dates:
1906: The New Balance Arch Company is founded in Massachusetts.
1961: New Balance introduces the Trackster running shoe.
1972: The company is acquired by James Davis for $100,000.
1975: A new model, the 320, is worn by Tom Fleming during his winning run in the Boston marathon.
1982: Sales reach $60 million.
1991: Sales reach the $100 million mark.
1997: A new manufacturing facility in Maine is constructed.
2004: New Balance becomes a sponsor of major league lacrosse and purchases a manufacturer of lacrosse equipment.
Chairman James Davis E-mail
Vice Chairman and EVP Administration Anne Davis E-mail
President and CEO Robert DeMartini E-mail
Address:
20 Guest Street, Brighton Landing
Boston, Massachusetts 02135-2088
U.S.A.