New Balance

New Balance Athletic Shoe, Inc.
Privately held company
Industry Footwear
Founded 1906 as New Balance Arch Support Company
Founder William J. Riley
Headquarters Boston, Massachusetts, USA
Key people
 Jim Davis, Chairman
Robert T. DeMartini, CEO & President
John Withee, Exec. Vice President and CFO
Anne Davis, Vice Chairman and EVP, Administration[1]
Products Athletic shoes, shoes, apparel,
Revenue Increase US$2.29 billion (2012)[2]
Number of employees
 3,908 worldwide (2009)[2]
Website newbalance.com
New Balance headquarters in Boston's Brighton neighborhood

New Balance Athletic Shoe, Inc. (NBAS), best known as simply New Balance, is an American footwear manufacturer based in the Brighton neighborhood of Boston, Massachusetts, United States (US). The company was founded in 1906 as the "New Balance Arch Support Company" and is one of the world's major sports footwear manufacturers.

New Balance maintains a manufacturing presence in the US, as well as in the United Kingdom—for the European market, where they produce some of their popular models such as the 990 model—in contrast to its competitors, who manufacture outside of the USA and UK. As a result, New Balance shoes tend to be more expensive than those of many other manufacturers. To offset this pricing difference, New Balance claims to differentiate their products with technical features, such as blended gel inserts, heel counters, and a greater selection of sizes, particularly for very narrow and/or very wide widths. The company has reached a total profit of approximately $40 billion since 1991.

History

In 1906, William J. Riley, British emigrant, founded the New Balance Arch Support Company, manufacturing arch supports and other accessories designed to improve shoe fit in the Boston area. His first product, a flexible arch support, was designed with three support points to provide greater balance and comfort in the shoe. It is believed that Riley came up with the name "New Balance" by observing chickens in his yard and demonstrated the way his arch supports worked by keeping a chicken foot on his office desk. He explained to customers that the chicken's three-clawed foot resulted in perfect balance. In 1927, Riley hired Arthur Hall to be a salesman. In 1934, Hall became a business partner and found his niche by marketing to people whose jobs required them to spend much time standing.[3] In 1956, Hall sold the business to his daughter Eleanor and her husband Paul Kidd.

Eleanor and Paul Kidd continued to sell mainly arch supports until 1960, when they designed and manufactured the "Trackster", the world's first running shoe made with a ripple sole. It was also the first running shoe to come in varying widths. The "Trackster" was given a big boost through the YMCA programs in which it became the unofficial shoe. College track teams such as MIT, Tufts University and Boston University adopted the New Balance Trackster for their cross-country teams, soon to be followed by other colleges and private high schools around the country.[3]

Marketing was mostly word-of-mouth or local sports fairs. Sales languished until 1972 when current Chairman Jim Davis bought the company the day of the Boston Marathon. At the time, the company consisted of 6 people making 30 pairs of shoes daily and selling products mostly through mail-order with a few U.S. retailers. Jim committed himself to uphold the company's traditional commitment to individual preferences, customer service and quality products. His future wife Anne, who joined the company in 1978, focused on building a distinct culture for New Balance employees and customers. Their timing was perfect, as the Boston area became a center for the running boom that struck the U.S. in the 1970s. Their product line expanded and sales grew rapidly. The company prospered, and the Davises looked to expand New Balance into a global company. The company is now run by Rob DeMartini. DeMartini's background includes Procter & Gamble and Gillette Shave Company. Today, 30% of the New Balance shoes sold in the European market are manufactured at the New Balance facility in Flimby, England.[4]

In February 2015, the company announced its entry into the global association football market. New Balance had started its soccer business through its subsidiary Warrior Sports in 2012, punctuated by a $40 million-a-year sponsorship deal with Liverpool, but made the move to rebrand based on the global reach of the parent brand.[5]

Made in USA (and UK) stance

The New Balance mascot, Newbie, at the Head of the Charles Regatta in October of 2013.
The New Balance mascot, Newbie, at the Head of the Charles Regatta in October 2013

New Balance is one of several shoe companies that makes some of their products in the United States. Green America states in the New Balance Responsible Shopper company information page that around one quarter of NB's shoes are made in the United States.[6] New Balance owns five factories in the United States: two in Massachusetts (Boston and Lawrence), and three in Maine (Norridgewock, Skowhegan,[7] and Norway)[8][9]

In 1994, New Balance manufactured 70% of its shoes in the United States.[10] In 2006, New Balance stated on its customer help site that "approximately 25% of the New Balance shoes sold in North America are Made in the USA and we will continue domestic manufacturing."[11] According to Fortune Magazine in 2006, "about 70 percent of its shoes are now made in China and the other 5 percent in Vietnam."[12]

The New Balance production facility in the United Kingdom has been, since 1982, at Flimby, Cumbria, in North West England, where 28,000 pairs of shoes are produced each week.[4]

New Balance Numeric

In 2013, New Balance launched a skateboarding shoe brand dubbed "New Balance Numeric" that is distributed by Black Box Distribution, a company founded by professional skateboarder Jamie Thomas. Following the announcement of the partnership in December 2012, Thomas stated in an interview with the TransWorld Business publication: "I am most hyped about the positive energy this partnership creates for the future of our distribution as well as how this partnership enables us to further support skate retailers with a new brand they can trust and depend on."[13]

The Numeric brand is overseen by Brand Manager Sebastian Palmer, who was formerly with now-defunct skate shoe brand eS, while Mike West, of Westlife Distribution and snowboarding brand 686, is Creative Director. West explained at the launch event: "I myself was a sponsored skateboarder back in the late eighties, so, for me, skateboarding is always at my heart, it's something that I bleed in. Same with running, before skateboarding, so it kind of just all came to what we are today, which is New Balance Numeric skateboarding." Palmer explained further at the same event:

New Balance is about doing things right. They are about doing things they wanna do, and following those through. We saw the chance to do something really authentic in a youthful culture that they [New Balance] hadn't really had a presence in before. More than that, they saw an authentic culture that they wanted to be a part of.[14]

The brand also consists of a sponsored team that is co-ordinated by professional skateboarder John Rattray.[15]

Team

Toning footwear

A class action lawsuit against New Balance filed in 2011 alleges that the company's toning footwear touts unproven benefits. In support of its claim of false advertising, it cites a University of Wisconsin–La Crosse research study on Toning Shoes that has been funded and published by the American Council on Exercise.[17]

Researchers reported that there were no “statistically significant increases in either exercise response or muscle activation” as a result of wearing the Toning Shoes. There was no statistically significant difference between participants wearing special "Toning shoes" and controls wearing normal sneakers. The researchers concluded that there is "simply no evidence to support the claims that these shoes will help wearers exercise more intensely, burn more calories or improve muscle strength and tone.” However, it was noted that “These shoes may be encouraging a fair number of people who probably wouldn’t put on a normal pair of walking shoes and go out and walk."[18]

Sponsorships

A member key for the New Balance Hubway system in Boston.

New Balance is the apparel partner of the Melbourne Football Club in the Australian Football League (AFL), and renewed its arrangement with the club for a further three years in December 2013.[19] New Balance also sponsors cricketers Steve Smith, Nic Maddinson, Gary Ballance, Jonathan Trott, Pat Cummins, Ben Stokes, James Pattinson, Aaron Finch and Dale Steyn,[20] and announced its multi-year sponsorship of Team Garmin-Sharp, an American professional cycling team, in January 2014.[21] Following the official launch in July 2011,[22] New Balance is the primary sponsor of Boston's bike share system, the New Balance Hubway.[23] New Balance also sponsors Canadian tennis player Milos Raonic.[24]

The company previously partnered with Matt Bonner of the National Basketball Association (NBA)'s San Antonio Spurs, providing him with shoes over a period of several years. During the 2010-2011 NBA season, Bonner was sent a prototype for a signature shoe that he was developing with the brand, but the shoes fell apart at the beginning of the game that he first wore them in; after Bonner was informed that the prototype shoes were not meant to be worn, a representative informed him that New Balance was ceasing its sponsorship of basketball.[25]

When the company announced its entry into the soccer market in February 2015, it also picked up Warrior Sports' roster of sponsored clubs, including Liverpool, Club Sport Emelec, Stoke City, Porto, and Sevilla (and added Celtic later that year[26]), the national teams of Costa Rica and Panama,[27][28] as well as players such as Vincent Kompany, Marouane Fellaini, Tim Cahill, Aaron Ramsey and Nikica Jelavić.[29]

In March 2015, the company revealed their first-ever football advertisement starring Aaron Ramsey, Adnan Januzaj, Samir Nasri, Fernando Reges, Vincent Kompany, Jesus Navas and Marouane Fellaini.[30]

New Balance began a partnership with American professional cycling team Cannondale-Garmin in 2011, providing the team kits as well as their "exclusive off bike athletic footwear" sponsor.[31]

References

  1. ↑ "Profile: New Balance", Hoover's
  2. ↑ 2.0 2.1 "Fact Sheet: New Balance Athletic Shoe, Inc." (PDF). New Balance. Retrieved 2013-07-21.
  3. ↑ 3.0 3.1 Enduring Performance: The New Balance Story
  4. ↑ 4.0 4.1 New Balance Flimby Factory website
  5. ↑ Stock, Kyle (February 4, 2015). "New Balance Goes on Offense, Slides Into Soccer". Bloomberg Business. Retrieved 2015-02-04.
  6. ↑ Responsible Shopper Profile: New Balance
  7. ↑ "Made in the USA - Skowhegan", New Balance Documentary, 2009
  8. ↑ New Balance – Domestic Manufacturing
  9. ↑ Hemmerdinger, J. (22 May 2011). "The Bottom Line: Running hard". Portland Press Herald. Retrieved 22 May 2011.
  10. ↑ Shoe and Tell: The Quest for American-Made Sneakers
  11. ↑ "USA Manufactured Models", New Balance, FAQ, October 17, 2006
  12. ↑ Parloff, Roger, "Not exactly counterfeit: Foreign contractors make more products than they're supposed to then sell the excess out the back door. New Balance found out just how hard it can be to shut down the 'third shift.', Fortune magazine, April 26, 2006
  13. ↑ Kailee Bradstreet (10 December 2012). "BLACK BOX EXECUTIVE TEAM & MIKE WEST WEIGH IN ON NEW BALANCE PARTNERSHIP". TransWorld Business. Grind Media. Retrieved 10 August 2013.
  14. ↑ HypebeastTV (9 January 2013). "Mike West Introduces New Balance Numeric" (VIDEO UPLOAD). YouTube. Google, Inc. Retrieved 10 August 2013.
  15. ↑ Blair Alley (8 August 2013). "NEWSHIT INTERVIEW: TYLER SURREY & JORDAN TAYLOR ON NEW BALANCE NUMERIC". TransWorld Skateboarding. Grind Media. Retrieved 10 August 2013.
  16. ↑ "Team". New Balance Numeric. Black Box DIst. 10 August 2013. Retrieved 10 August 2013.
  17. ↑ "Pashamova v. New Balance" (PDF). Retrieved 6 February 2011.
  18. ↑ Parcari, Ph.D., John; Mark Anders, John Greany, Ph.D., Stephanie Tepper, M.S., Brian Edmonson, B.S., and Carl Foster, Ph.D. "Will Toning Shoes Really Give You A Better Body?" (PDF). Retrieved 2/5/11. Check date values in: |accessdate= (help)
  19. ↑ Matt Burgan (11 December 2013). "New Balance partners for three more years". Melbourne Football Club. Telstra Media. Retrieved 23 August 2014.
  20. ↑ "New Balance add Ballance". Sporting Goods Business. Datateam Business Media Limited. 6 May 2014.
  21. ↑ "New Balance Expands Pro Cycling Sponsorship With Team Garmin-Sharp". New Balance. New Balance. 9 January 2014. Retrieved 23 August 2014.
  22. ↑ "Mayor Menino Launches New Balance Hubway Bike Share System". City of Boston.gov. City of Boston. 28 July 2011. Retrieved 23 August 2014.
  23. ↑ "Partners". The Hubway. The City of Boston. 2014. Retrieved 23 August 2014.
  24. ↑ "Milos Raonic Teams Up With New Balance". New Balance official website. Retrieved 22 January 2015.
  25. ↑ Andrew McNeill (19 May 2014). "Matt Bonner takes to Twitter". ESPN. ESPN Internet Ventures. Retrieved 23 August 2014.
  26. ↑ "Celtic confirm kit deal with New Balance". The Scotsman. 5 March 2015.
  27. ↑ Mendoza, Adrián (7 April 2015). "New Balance vestirá a la Selección de Costa Rica por los próximos ocho años". CRHoy.com. Retrieved 28 April 2015.
  28. ↑ Bolvarán, Arturo (30 March 2015). "New Balance, la nueva marca deportiva de las selecciones de Panamá". RPCTV Panamá. Retrieved 28 April 2015.
  29. ↑ Badenhausen, Kurt (February 4, 2015). "New Balance Challenges Nike And Adidas With Entry Into Global Soccer Market". Forbes. Retrieved 2015-02-04.
  30. ↑ Inveterate (26 March 2015). "New Balance: Aaron Ramsey, Samir Nasri, Jesus Navas, And More Unite For #NBFootball Campaign". Inveterate. Retrieved 26 March 2015.
  31. ↑ "new balance expands pro cycling sponsorship with team garmin-sharp". NewBalance.ca. New Balace Canada, Inc. 9 January 2014. Retrieved 4 March 2015.

External links

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