Caleres buys Allen Edmonds

St. Louis-based Caleres, which owns a diverse portfolio of shoe companies, has acquired Allen Edmonds from Brentwood Associates for $255 million.

Caleres said the acquisition of Wisconsin-based Allen Edmonds, maker of men's premium handcrafted leather footwear and accessories, is a strategic expansion within men's footwear.

Three years ago, Brentwood of California, paid about $200 million to Minneapolis-based private equity investor Goldner Hawn Johnson & Morrision for Edmonds, which is based in Port Washington, north of Milwaukee.

Allen Edmonds is a turnaround story thanks to Goldner Hawn and one of its former partners, Paul Grangaard.

As Allen Edmonds' fortunes sank during the 2008-09 recession, Goldner Hawn invested another $10 million to keep Edmonds, which couldn't make debt payments, from closing its doors. Other equity partners that had joined Goldner in the 2006 leveraged buyout wrote off their stakes and backed out. Grangaard, a career investment banker and manager who joined Goldner Hawn from Piper Jaffray, left Goldner Hawn in 2008 and moved to Wisconsin to try and turn around one of the last domestic shoe makers.

Grangaard doubled down on Allen Edmonds classic styles for business and casual wear, jettisoning some peripheral products, and hung on until the recovery kicked in for the company in 2010.

Grangaard rehired laid off workers and added about 250 manufacturing and sales jobs between 2010 and 2013. There are more than 1,050 workers today, including 300 in the Dominican Republic. He opened a downtown Minneapolis store that became one of the best performers.

Goldner Hawn also made an unspecified, multi-million dollar gain on its investment through the Brentwood buyout in 2013.

Grangaard was in a Caleres board meeting Wednesday afternoon and unavailable for comment.

He told the Wisconsin Biz Times earlier that Brentwood provided critical expansion capital and Caleres is the strategic buyer Grangaard has sought.

"It's very much a win-win for the community and for the company," Grangaard said. "I've been here for eight years and this is what I have been looking forward to having happen since I came here: We would build this company to where it's attractive for a major industry player that would keep it the same way that it is, and that's what happened today.

"It's also a strategic buyer that is not encumbered with other significant brand penetration in the men's business. We're going to be their major men's brand and we don't have to worry about conflict with any other men's brands."

Allen Edmonds, founded in 1922, had revenue of about $145 million in 2013. It's unclear how much sales have grown under Brentwood.

Grangaard, who also has an office in Minneapolis, was successful in distinguishing Allen Edmonds as a high-buck, high-quality shoe preferred by business men and U.S. presidents compared with Asian and other imports. And he built loyalty behind more casual lines, including deck shoes, and offered deals to college students to broaden interest among younger men.