This Nashville-based company, which grew from a small local shoe manufacturer to one of the nation's largest apparel companies, has been an important Tennessee enterprise for over seventy years. With sales exceeding one million dollars its first year in business, the company experienced strong sales and increasing success for several decades. After heavy losses and financial setbacks in the 1980s and early 1990s, Genesco is currently regaining financial ground to remain a strong competitor in the shoe industry.
Genesco began in 1924 as the Jarman Shoe Company, a small manufacturer of men's shoes. The key figure behind its prosperous development was Maxey Jarman, who saw in his father's small business an opportunity for expansion. Acquiring other companies and maximizing their potential, Jarman broadened the company's product line to include women's and children's shoes plus a wide variety of clothing. He also enhanced profits by selling through company-owned retail stores. Sales and earnings doubled approximately every six years beginning in the late 1930s until 1968, when sales reached over one billion dollars, making Genesco the nation's largest and most successful apparel conglomerate. It operated over 148 manufacturing plants and distribution centers across the United States, maintained 1,750 retail stores in North America and Europe, and employed over 65,000 workers.
In addition to his activities as president and CEO of Genesco, Jarman also pursued numerous philanthropic endeavors. A devout Baptist, he served as a trustee of the Tennessee Baptist Foundation, director of the Southern Baptist Convention Sunday School Board, and director of the Tennessee Baptist Children's Homes. Jarman was also a trustee of George Peabody College for Teachers, a member of the Executive and Finance Committees for the Billy Graham Crusade, and cofounder of the Jarman Foundation, which funded missionary projects.
Ben H. Willingham, a Georgia native and former Vanderbilt student, joined Genesco in 1933 and quickly climbed the corporate ladder, becoming vice-president in 1956 and president in 1958. When Jarman announced his retirement in 1968, Willingham became the logical choice for the next chief executive officer. He and Jarman had perfected a management system which emphasized communication, flexibility, decentralized decision-making, and consolidated financial control, and he anticipated that its continuation would take sales over the two-billion-dollar mark by 1975. The company also opened a splashy modern-style corporate headquarters in Nashville during the 1960s. Although the company remained strong, however, its future proved to be less auspicious.
By the 1980s recessions, new trends in clothing, and increased competition interrupted the company's progress. In 1985 Genesco lost $34 million and closed several factories. A year later, its stock dropped to 77 cents a share, and banks refused to extend the company credit. Newly appointed chief executive officer William Wire II instituted drastic changes, selling all Canadian operations, relocating plants to less costly sites abroad, and downsizing the men's suit division. When sales continued to drop, Genesco moved away from the production of dress shoes and instituted lines of rugged and athletic footwear, including two new lines in conjunction with Nautica and Levi Strauss's Dockers line. In 1993, however, sales were down to $540 million, and the company lost $51.8 million.
That year Wire hired Douglas Grindstaff, a former marketing executive with Procter and Gamble, to enhance the company's advertising and marketing divisions. Grindstaff expanded Genesco's boot division to capitalize on the latest trend. Although this move was successful initially, the boot fad soon began to fade, taking Genesco's profits along with it. In 1994, after sales continued to decline, Grindstaff initiated a comprehensive two-year restructuring program that reduced the work force 28 percent and closed 58 retail stores and some plants, including a boot factory in Hohenwald, Tennessee. At present, the company is beginning to experience a long anticipated turnaround. During the first quarter of 1997, sales increased significantly, and earnings reached their highest point in over twenty years. Although not the multi-billion dollar corporation Willingham predicted, Genesco has survived numerous setbacks and remains a major Tennessee corporation based in Nashville. In February 1997 Ben T. Harris was named president and CEO, and in November 1999 Harris became chairman and CEO of Genesco.
W. Maxey Jarman and Ben H. Willingham, The Genesco Formula for Growth (1969).
Published » December 25, 2009 | Last Updated » January 01, 2010