At 71, Brian Cook, the once-dominant force behind Famous Footwear’s retail expansion, has lived through a few economic upheavals. But the most recent recession was the most brutal, one that made Cook feel somewhat relieved to have retired from retail in 2001.
“The recession has had the biggest effect on retail we’ve ever had. They should call it something other than a recession. There are fewer spendable dollars than [before],” said Cook. “We still have 10 percent unemployment, so it doesn’t really fit that we’re supposedly coming out of all this.”
Still, Cook is upbeat about the footwear industry’s long-term prospects. He said retailers could thrive with an aggressive cost structure that supports lower margins.
That’s no surprise, given that such a sentiment was the bedrock for building Famous.
When Cook joined Neil’s Factory Shoe Outlet in 1963 as a stock boy, there was only a single store. But he was convinced that discounted merchandise in an open format would woo shoppers. He was right.
Cook eventually took over as president in 1979 and grew the name-changed retailer to 920 stores, cracking $1 billion in sales.
“I always knew that Famous could be big and sensational,” he said. “And you know what? It became big and sensational.”
Here, Cook weighs in on how Famous Footwear became a major player in the family footwear space, why he’s still skeptical about the Internet and the one product that changed retail forever.
FN: Famous Footwear was a retailing giant by the time you retired in 2001. What made it successful?
BC: We were one of the first factory outlets in the Midwest. It was Neil’s Factory Shoe Outlet, and I joined when I was in college. The store bought all closeouts and was primarily a women’s store. The market had never seen anything like that, [and it] was so open for this sort of thing. Most of the stores that shoppers went to were mom-and-pop stores; department stores were all very expensive, not at all like they are today. The market was wide open for big, open formats selling discount product. As a result, we started a rapid store expansion program. We ended up putting a lot of little stores out of business. The market wasn’t very sophisticated then, so we could get along with a whole lot of mistakes, and we did. Eventually, as things tightened up, we got much, much better. Eventually, in the early 1990s, everybody was a discounter. Everyone was opening shoe stores like our’s. Everyone copied our concept. We were groundbreaking and very revolutionary at the time, and not very popular with a lot of regular-priced retailers.
FN: Did you ever envision that what you were doing could become a national chain?
BC: Early on, when I was in college even, I said this thing could be something. I told that to Dave Orfan, then the president, one night when I was done studying my accounting. [A few years later in 1974], we got some investors together and bought [out the existing partners]. Dave was an expansion freak. And it was right to expand the way we did, and we were good at it.
FN: During your nearly 40 years in the business, what was the biggest change you saw?
BC: The effect of athletics on the consumer totally changed the face of the shoe business. Before 1974, we couldn’t get Adidas, we couldn’t get Puma, and customers were knocking down the doors wanting those kinds of shoes. Eventually, I put something together and we opened up little sporting goods shops because we didn’t have great big stores then, and each one of the stores ran “Grand Opening” ads for the All Star Sports Centers within Famous Footwear. The company just took off again, even though they were much lower margins than we were used to. And we couldn’t really sell shoes at that kind of margin, except to raise our buying. It changed our whole cost structure. It changed the way we did business; it changed the face of athletics. And athletics grew from being, in those days, little cap-toe tennis shoes for kids, and women’s shoes that were only two or three different styles in four or five colors to having all 10 different major athletic brands eventually becoming 45 percent of the business.
FN: How has retail changed since you retired?
BC: Retail, in general — not just the shoe business — has become much more involved in the digital age. [When I was at Famous], I didn’t put it at the top of my priority list to make Famous an Internet company. I never believed in it. I still don’t believe in it, although I think it’s a bigger factor. And you need to be in it because there are certain things consumers will buy over the Internet, but the fashion [segment] just doesn’t work very well because they get 55 percent of the product shipped back. Brown is in it; Famous is in it, but it shouldn’t be at the top of your list.
FN: The recession was pretty nasty. Is there a lesson that the footwear industry should have learned?
BC: Footwear will always do OK. It’s a question of your margins. What margins can you obtain to make people come through the doors? And then, can you have a cost structure to support that lower margin? We were always able to do that and we evolved into it over the years as we got better. In the beginning, we could make all kinds of mistakes because the concept was new and we got away with murder. Eventually, it was about doing it better than the next guy.
FN: What’s your best memory of being at Famous?
BC: Some of the great, great people I hired, and some of the great people I was able to have big influences on in their lives and help them develop into someone they never thought they could be.
FN: Are you involved with Famous in any capacity today?
BC: Not at all. In 2008, I worked for them for about 10 months and helped with the Naturalizer shoe shops in China. China is exploding as a regional opportunity, and I went over there three or four times in 2008 and helped them to effectively establish a company that could open a lot of Naturalizer stores in China. And when things got done, we parted ways.
FN: Do you miss the footwear business?
BC: I miss the people. I still have contact with some of the people, my favorites.
FN: What advice do you have for the executives running Famous Footwear today?
BC: I think they’re doing it, but I’ll say it anyhow: What made us a great company was being a place for great people — allowing them to do their thing — and being aggressive in the marketplace. They’re doing that, and that’s what you have to do. The marketplace is not like it was back in the 1960s, but because competition has flattened somewhat, Famous has a big opportunity to be aggressive