Balanced and bounding forth

Jim Davis
chief executive,
New Balance

Jim Davis bought New Balance in 1972 when the six-person workforce in Boston was making 30 pairs of running shoes a day. Today, New Balance is a $1.55 billion global company with more than 2,800 employees worldwide. The 63-year-old executive recently spoke with Globe reporter Jenn Abelson.

Q. New Balance's worldwide sales have hovered around $1.5 billion for the last three years and US sales actually dipped in 2006. Is there any growth left in the sneaker business?

A. We want to double our sales to $3 billion over the next five years. We're making a real push in apparel. Most companies do 30 percent of their business in apparel. We are embarrassingly small. We are underindexed in most countries internationally. We're looking to grow in new markets in India and China. In the United States, we want to grow our footwear 8 to 10 percent. That would make us a solid number two in the US market.

Q. What was wrong with New Balance's approach to apparel?

A It was my fault. We just didn't do it right. We didn't have the right people. We tried to be all things to all people and didn't do anything right. Now, we have the right team in place and are looking to make apparel for a real runner and team apparel, too.

Q. New Balance is hugely popular among baby boomers. So why was the company teaming up with Sesame Street for a marketing partnership last year?

A. Infants and young children is a huge area. It will be our fastest growing category in '07. We're looking from infants up to 8 or 9 years old. At these ages, sneakers are a mom decision, and that's an advantage for us already being oriented toward older customers.

Q. Are you planning to go after the teen market?

A. It's unlikely that New Balance will ever attract teens. And if we try to chase 13-year-olds we might alienate our core customer. But with our newer brands, like Warrior, we can branch out. Warrior has a younger appeal and fits much better for that market.

Q. Unlike most sneaker companies, New Balance has five manufacturing plants in the United States. How is it still worth making shoes in America?

A. There's a huge sales advantage. We can manufacture shoes more quickly. We've leaned our manufacturing process. It used to take two months to make shoes. Now we can do it in four days. By the end of the year, we'll be able to make all 140 models in one day. It's unheard of in this industry. It allows us to respond to retailers more quickly and let them carry less inventory.

Q. Your rivals, Nike Inc. and Adidas Group, have spent huge amounts of money to get athletes to endorse their products. Why doesn't New Balance do the same?

A. We would much rather spend those funds in making better products.

Q. Last month, New Balance created a division in the company dedicated solely on the elite running business. Why?

A. We used to be the number one brand at these small tech shops, but we grew too quickly and took our eye off. Now, there's more attention being paid to these elite shops and they are growing fast. We now have products just for these elite runners.

Plus, it has a huge halo effect -- if you do well with the tech shops, the larger sporting goods chains look better on you. With us, tech shops can lower their inventory. We can promise to deliver shoes overnight.

Q. Other sneaker companies have looked toward big acquisitions to fuel growth. Are there any companies you're eyeing?

A. We'll be making more acquisitions in both shoe and apparel. But we might want to purchase a skate brand, too. We see that as a growing market, and New Balance can't really cover that.

Q. New Balance is one of the few private major sporting goods brands. Is New Balance looking to go public?

A. We like the independence. You can run a company the way you want in the long term and don't have to worry about keeping Wall Street happy. All I have to do is worry about keeping my wife happy.

Q. How many sneakers do you own?

A. Eleven pairs.