As CEO of a 135-year-old business, Diane Sullivan was looking for new ideas for growth and a fresh take on men’s shoes for Brown Shoe Company. She thinks she may have found it in Jack Erwin, an upstart New York City-based online shoe brand that just started selling its footwear last year.
Brown Shoe Company, Founded 1878, Invests In Jack Erwin, Founded 2013
The investment in the New York City-startup could help Jack Erwin get its shoes into retail stores.
Jack Erwin
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
Brown Shoe, the public company behind Famous Footwear stores, Shoes.com and brands such as Dr. Scholl’s, is leading a $9 million investment in Jack Erwin, the companies are set to announce on Thursday. Jack Erwin had previously raised nearly $3 million in two separate investment rounds.
After learning of the startup from a son-in-law who had purchased its shoes, Sullivan became intrigued with the company’s business model of selling high-end men’s shoes for under $200 by designing the footwear itself and selling directly to shoppers through its own website. Jack Erwin shoes are designed in New York and made in Portugal and Spain.
“It’s a new approach and new way to get to the next generation of men,” she said in an interview with Re/code. “They’re also bringing this idea of great quality and craftmanship and terrific value to consumers.”
Jack Erwin co-founder Lane Gerson said the investment will give the startup the financial cushion to take a long-term view on building a brand and avoid the pitfalls of pushing too hard to build a breakout brand overnight. His partner Ariel Nelson said Jack Erwin could tap Brown Shoe Company for help getting its shoes into physical stores when the time is right.
While Brown Shoe Company doesn’t often invest in young companies, there is some precedent for this move. In 2008, it invested in shoe brand Sam Edelman, which was doing between $10 million and $15 million in revenue at the time, according to Sullivan. Two years later, Brown Shoe acquired Sam Edelman and is now building it into a global lifestyle brand that sells other apparel beyond shoes, Sullivan said.
So is an acquisition the end game for the investment in Jack Erwin, which Nelson said is going to do “a few million dollars” in sales this year?
“If it works out, great,” Sullivan said. “Another thing is the learning we would get around new business models and this type of consumer. I think this is about expanding our knowledge as much as about anything else.”
This article originally appeared on Recode.net.
