When you don’t know what’s going to happen, the conventional wisdom of all the C.E.O. peers I talk to and most private equity people I know, and most bankers, is to hunker down, batten down the hatches, and throw stuff overboard you don’t need. Shed costs, because it’s about first and foremost survival, and not only survival, but protecting profits.
But we didn’t have a brand that we were protecting. We were creating a brand, we were adding new customers. We’re in an entrepreneurial mode, have been now for 20 years. So in April 2020, when everybody’s laying off people, my own board was saying, Jim, you know, you’re probably going to have to lay off people.
But we had a thought that in stressful times, running is convenient. It’s cheap. People might go running. So we paused, and as soon as we saw runners running and digital demand picking up, we turned back on our supply chain, and I think we probably did it at least eight weeks before anybody else did. It’s hard to describe how meaningful that was. We kept our marketing spending going. We didn’t lay off one person, and we grew 31 percent last year. And this year, without our supply chain issues, we’d be up over 30 percent.
When did you realize Brooks had the potential to compete with big companies like Nike in the running market?
When the Great Recession hit in 2008 and 2009 and the world was ending, economically speaking, it just crushed apparel. We did a layoff at that point. But by February of 2009, shoes started selling.
Nike is one of the greatest brands ever built, and it’s about competitive, athletic achievement and breaking the tape on the podium. It’s just so powerful. But we saw running as the most unique sport in all the world, and we had this “Run Happy” ethos, which was unique.