Mike Brooks has the heart of a small-town boy, but the brains of a big-time businessman.
The 65-year-old executive, who last month stepped down as CEO and chairman of Rocky Brands Inc., has helmed his family’s company since 1979. During that time, Brooks created the Rocky brand, took the firm public, moved production offshore and, in what’s clearly been his biggest gamble, bought larger rival EJ Footwear Group.
While Brooks no longer heads daily operations, he retains the executive chairman role at the company, which is based in the quaint town of Nelsonville, Ohio, where Brooks was born and raised.
“I still have an office here, I just don’t have to show up at 7:30 a.m. and make every call and stay until the business day is over,” he said. “I’m looking forward to some freedom, but I still need to have some contact with this company because it’s been my life.”
Indeed it has been. Brooks’ grandfather and uncle formed the business as the William Brooks Shoe Co. in 1932. The two started with a handful of employees and began producing a few hundred pairs of shoes, eventually signing major contracts for boots with the U.S. military.
Years later, when Brooks was 14, he began working in the factory, rolling leather, carrying it to cutters and learning how to make boots and shoes.
The small family business has since ballooned. For the second quarter of this year, Rocky Brands’ net income hit $2.3 million, compared with $500,000 a year earlier, on sales of $52.3 million.
“I’ve always wanted Rocky to be at least a half-billion-dollar annual-revenue [business],” he said.
To lead it toward that target, Rocky named David Sharp, formerly president and COO of the firm, as CEO, effective last month.
In an exclusive interview at Rocky’s headquarters, Brooks discusses why he’s so passionate about the shoe business, his love for Nelsonville and what Phil Knight did to make him angry.
What moments have defined your career?
MB: Coming back to join my dad in 1975 [after he reacquired the business]; taking the company public [in 1993]; and the acquisition of EJ Footwear [in 2004]. Our plan was to pay $100 million for EJ — $90 million in cash that we didn’t have and $10 million in Rocky stock. Our intention was to raise capital through the public markets. Our stock was quite high, but we missed the window. So we’ve had $90 million in debt over the last six years. We should’ve sold some stock to shrink that debt. I was probably a little greedy. I wanted the stock to go higher; it went south instead of north. Going public, I had to change [the way I] manage and think. We brought in talent from all over the world, instead of being a small family company. But we got through it without killing the culture of the company.
Speaking of culture. What are some pros and cons of being largely a family business?
MB: There were tough times when you have five siblings, a mother and father active in a small family business. But dad and mom were really great people and kept us fairly grounded. We didn’t have any huge disputes. I have two brothers in the business, Jay and Stuart, [who are] key account managers, and my son Jason is president of U.S. wholesale. There’s still a lot of family involved, but we run it as a business. If you have some talent you can deliver, [that’s fine], but there are no free rides. We don’t play those games. You can’t.
You’ve kept Rocky in Nelsonville all these years. Why was that important?
MB: This is a small, old, coal-mining community of hardworking, proud people. Jobs are important and critical. Of everything Rocky has done, I’m most proud of keeping jobs here, even though we stopped manufacturing [domestically]. If we wanted [to remain] in the business, we had to make the transition to a branded company. If you make money, you can do wonderful things for your community and your associates.
What’s been the biggest change in the industry over the years?
MB: Manufacturing leaving the U.S. That broke my dad’s heart. I remember when Phil Knight shut down Nike’s last U.S. factory in New England. I was angry with him at the time. I didn’t know the man, but I was angry. He said most Americans don’t send their children to college to work in shoe factories. He was dead right.
As you pass the torch to David Sharp, what do you think he needs to focus on?
MB: Probably what could propel us the quickest is expanding markets. Sixty percent of our business is work shoes. It’s good because it’s fairly stable, but bad because the work market is declining in America. We need to have success in either a walking series of shoes or possibly acquire a women’s brand.
Who have you most admired in the industry?
MB: There are two companies that come to mind. I’ve admired Wolverine — the company and Tim O’Donovan. He is a gentleman, a wonderful person and a competitor. I’ve always respected what Wolverine has done, and in my dream of dreams, I’d love to be a Wolverine. The second is Timberland. I see the story: The Swartz family is very similar to ours, and they just sold their business for the off-the-chart [amount of] $2 billion. I’m so happy for them. They’ve built a wonderful brand.