Milestone: Q&A With Brooks CEO Jim Weber

Milestone: Q&A With Brooks CEO Jim
Brooks' CEO sounds off on crafting culture, changing his job and what the future holds.

Jim Weber is ready to take Brooks into the future.

In fact, the CEO has been looking forward since he joined the firm in 2001, when the brand was at a low point: Sales were down, product was overdistributed and the company was losing money. But by focusing on Brooks’ core strength — performance running — Weber has engineered a dramatic turnaround, one that’s helped the brand nab the top slot in the specialty running market and set it up to exceed half-a-billion dollars in sales in 2014. He also has fostered a steadfast culture that puts technical innovation at the forefront.

There’s more to come, though. Weber has an ambitious goal to reach $1 billion in sales by 2020, and his plan to reach it is clear: Build the best gear and give the best experience, and you’ll be the No. 1 choice for runners. “We [want] to create a premium brand that becomes loved by runners — that’s our vision and our mission,” he said.

Click here for all of FN’s special Brooks Milestone coverage >>

Speaking to Footwear News at Brooks’ temporary headquarters in Seattle (in August it will relocate to a new space in the city’s Fremont neighborhood), Weber noted that a tagline the company adopted before his tenure — “Run Happy” — has become the firm’s marketing and corporate ethos, and its driving force.

“I often say I have the best job in this industry,” he said. “Every day is fun because we know we’re building something that’s unique to Brooks, and I love that.”

And those who have watched the brand’s transformation agree.

“Brooks went from being a sleepy, basically fill-in brand to being much more forward thinking. It’s been a remarkable transition, and I give them a lot of credit,” said Matt Powell, an analyst at SportsOneSource. “‘This is a great brand, and it’s fun to watch ”

Jeff Phillips, president and CEO of Carrboro, N.C.-based Fleet Feet, who worked as VP of U.S. sales at Brooks for 14 years (but didn’t overlap with Weber), said the changes the CEO implemented have helped the brand become one of Fleet Feet’s top vendors. “It’s not easy for suppliers to do business with local independents, and it’s not easy for small independents to do business with a large company, but Brooks has figured out how to connect on that level,” he said. “I have nothing but great things to say about Jim [and his] team.”

Brooks’ parent company, Berkshire Hathaway, agrees. Warren Buffett told FN he’s looking to the future as well: “The second 100 [years] is the best, particularly if you have Jim Weber running things.”

Here, Weber talks about looking back, running happy and preparing for the future.

When you joined Brooks in 2001, what did the business look like?
JW:
There were a lot of issues for the business: We were losing money, we had a lot of debt on the balance sheet, a lot of product wasn’t successfully selling through, inventory was backing up, we had entered the apparel business and we weren’t executing that well. When I came in, there was a financial crisis. We were in every category, we were still making good-better-best product, starting at $30, so we were doing a lot of athletically styled family footwear. We were doing our classics. We had the Chariot in this beautiful beige — I won’t call it what it really looked like. OK, I can’t resist: cadaver beige. Isn’t that awful? But it just speaks to how ugly the shoe was. But we had two successful technical running silhouettes: the Beast and the Addiction in motion control. We had good distribution in specialty and sporting goods for those two shoes. And that’s what we chose to build on.

Not many players go from a full-line athletic brand to only one category. Did it feel risky?
JW:
It felt like we were going to a place where no one had quite been before, and that made a lot of people very uncomfortable — retail partners, everybody in and around Brooks watching us. But if everybody is zigging, we wanted to zag and have a point of view. Brands that are meaningful have a point of view. One of the riskiest things we can do as a brand is look like everybody else.

What effect did that have on your business?
JW:
Our biggest customer in 2000 and 2001 was Big 5 Sporting Goods. They were a $10 million account out of $60 million-plus sales [in total], so it was huge. And in our first meeting with them, [they said], we love you guys, but we’ve been selling at $30 price points. We see you at $19.99. And we were losing money at $30. [So we decided], we’re just not a low-cost producer. We’re not a high-volume footwear player, so we’re going to exit that space.

What was the reaction internally to your plan?
JW:
They had a pool on how long I would last.

Let’s talk about your oft-quoted “Run Happy” motto. What does it mean to you?
JW:
There are so many different reasons why people run, but the common factors are the energy, the health, the wellness, the vitality, the mental clarity that it brings and the good feeling afterward. That’s really what “Run Happy” is — it’s celebrating the positive energy and outcomes that people get from running.

In 2011, Brooks reached Leisure Trends’ No. 1 sales spot for the independent running channel. What did that moment represent for the brand?
JW:
That was a big deal. The specialty run channel is the No. 1 channel where runners shop, so if you’re focused on being relevant to those customers, you have to care about that channel. We’re only the third brand in the last 30 years to do that, and that’s a huge milestone for our brand.

As you expand your distribution, how do you balance the needs of all your different retail partners?
JW:
We have to be really good at delivering the market. That’s true for a little specialty shop with no distribution center that’s maybe not all that sophisticated in futures and buys and planning, but it’s also true for the larger-format retailers. No matter what, how you’re servicing the market — being good at planning and demand forecasting and then being agile in the supply chain so you deliver to customers complete and on time — is so appreciated.

In 2010, you declared that Brooks would hit $1 billion in sales by 2020. What drove that?
JW:
[FN was] one of the first publications I met with on the $1 billion strategy. I went out on a limb on that one. We were $180 million that year in sales when we set the $1 billion goal. [When we repositioned] in 2001, and again in 2009, those were huge inflection points for us. In 2009, it was an interesting time — the financial crisis hit in 2008 and everyone paused. We did, too. But what we saw in spring ’09 was that our shoes kept selling. They were selling like crazy. And we were looking at that and we believed that we had earned a ticket to the game in running. And for the first eight years [I was here], we grew share and sales every year. Then in 2009, we grew sales, but we lost just a touch of share. Everybody who could make a shoe had made a running shoe, so it got busier, it got noisier. It was a wake-up call.

What action did you take?
JW:
It was a soul-searching time. We decided we were in such a unique position, and that “Run Happy” was such a unique position in this running lifestyle, that we had to lead this category. We actually added “thought leader” as a [core] value. We didn’t have the muscle around it, but this is where we began to do the work that led to Pure Project. We added runner insight, and [the idea of] art to our science functional aspect. [To support that] we went to our corporate parent and said, “We have to invest in this business.” They agreed, and we just took our profitability down in half. We invested well over $12 million in enhanced research-and-development programs, in product innovation and in upping our marketing spend. We put dollars into the organization in terms of hiring more staff and developing our sales around the world. [Our sponsorship of the] Rock ’n’ Roll Marathon Series was the first thing we did, and it was the biggest marketing investment we ever made at that time.

How much progress have you made?
JW:
We’re going to hit a half-billion dollars this year. We’re actually ahead of plan. We think we’re going to hit it early, probably, but we’re focused on doing it the right way, too. I’m super-excited about where we sit today. We’ve never been stronger as a brand or a business. Berkshire Hathaway is absolutely a competitive advantage for us in building the strategy out over the next decade.

This year is the first time under your watch that Brooks will return to the classics business. Why now?
JW:
[When I started], we weren’t executing it well. They were price-point classics and doing nothing for our brand. I locked them in a closet, waiting for the day when we had credibility and authenticity as a performance brand. Then the 100-year mark was staring at us in 2014, and it was time. The 1970s and ’80s were incredible times of innovation in running, and Brooks was right in the middle of it. It’s about bringing dimension to our brand.

Will there be a day when Brooks goes back into other athletic categories?
JW:
Often what I say is, because I burned the boats, it’ll be after I leave.

Your North American business is your largest. How do you plan to expand globally?
JW:
We’ve got a fantastic leadership team in place now. I started working on a global leadership structure for our brand and our business two-and-a-half years ago, and it’s all come into place this last year. I’m excited about the people we have leading our business and brand across the globe, so I’m trying to support them, so we can support development of the brand. My accountabilities are first and foremost the strategy and the culture, and I’m trying to carry that flag into every corner of Brooks.

You’ve steered the business through two big changes in your tenure. How many more evolutions do you expect?
JW:
Inflection points are interesting because you can’t see them coming, right? And then you’re in it and you better see it and you better call it. I’m proud I’ve done that twice, but it keeps me awake at night.

What’s your take on the athletic market as a whole?
JW:
In our category, I believe this: The best product wins. Not the first to market, the best. It’s sort of like it’s more of a half marathon or a marathon than a sprint. You can come out of the block slow, but if you run the best race, you’re still going to win. In this environment now, the tricky part is to be responsive but not reactive.

With 100 years behind it, where is Brooks today?
JW:
Brands take decades to build, so we’re still in the early stages of what we’re doing. We’re still in creation mode. We’re probably still a mile out from the water station at the half-marathon point. We’re right in the middle of this thing.

Click here for the CEO’s thoughts on the value of races and his ultimate legacy >>