Outsourcing manufacturing and production is a common practice in the footwear industry. As a prominent contender in the footwear market, New Balance earnestly continues to produce a portion of their shoes in the United States and in the United Kingdom. Factories such as their Flimby facilities continues to provide steady employment to the community that it is situated in. New Balance Lifestyle SBU Manager Steve Gardner was able to give us some insight on New Balance’s reception in both the North American and Asian market, the philosophy behind manufacturing at home vs. outsourcing, and how their success in Japan has influenced their decisions. In this segment of HYPEBEAST Trade, Steve Gardner also explores the rationale behind New Balance’s understated endorsement program.
Can you introduce yourself and your role at New Balance?
Steve Gardner, Lifestyle SBU Manager.
Can you provide an overview of your company structure? Yearly revenues?
New Balance is a private company with global annual revenues of more than $2 billion in 2011.
As one of the few brands to domestically create footwear, how important is this to the company’s identity?
Manufacturing is part of the core of who we are as a company. It is integral to how we look at the market and what type of company we are. As a company, we are proud to invest in American workers who provide some of the greatest working spirit, commitment to advancement, and ingenuity known in the industrial world.
What aspect of domestic production ensures higher quality footwear than Asian counterparts?
The benefits of domestic production are more complex than any one aspect. It is more about New Balance being committed to providing American jobs and also having a strong global product perspective. All of the shoes that New Balance produces are great quality.
New Balance has traditionally operated with strong regional identities such as a great presence in Japan. Is this to the strength or detriment of the company?
For New Balance this has been a key strength. We do work to ensure that the core identity of the brand is consistent globally. What New Balance has done well in key markets like Japan has been great amplification of certain pieces of the New Balance brand that resonate with the consumer. In turn we have been able to utilize lessons from that business and apply them around the world. New Balance’s strength in Japan has been a great asset to the brand and their leadership has helped the brand succeed at a global level.
Between your lifestyle and performance segments, what is the general health of each business?
Both of these business areas are seeing solid growth at the global level.
As with any brand that operates in both lifestyle and performance spheres, how do the two play off one another? How do you allocate resources for one another?
We work together on where we see the overall marketplace moving, how trends inter-relate across businesses, and where there are synergies in terms of materials and treatments. Though both groups have separate resource structures, we work together in cross pollinating ideas as well as continually looking how the essence of the brand can emerge in either segment. we are also constantly looking at our target consumers and how the performance and lifestyle consumers are related or in many cases the same.
Unlike material costs which have subsided to a degree, rising production costs have overrun traditional shoe producing areas of China. What are New Balance’s plans forth coming?
We work to keep our current U.S. factories full and growing and we continue to work with overseas supplier partners in China, Vietnam and Indonesia to meet our current demand for footwear production. We also operate a manufacturing facility in Flimby, UK that services the European market with made in the UK footwear. We like the diversity – it provides our business from a risk and responsibility standpoint by manufacturing in different locations.
Athletic endorsement is usually not the focus of New Balance, will it continue to uphold this direction?
We involve athletes with our brand by supporting them in their training and competition, and leveraging their expertise to help us develop better product. We also engage them as brand ambassadors and are proud to associate our brand with athletes who share our values, believe in our brand, and are committed to giving back to their communities.
Any last words you’d like to share about the business side of New Balance?
We believe that manufacturing in the U.S. not only impacts the global marketplace from an economic perspective, it impacts the local communities where we all live and work. The positive benefit that our factories and the jobs has on the five communities where we have factories is significant and is a great source of company pride.