The Timberland Co.: Nutritious Boots?

Feb. 17, 2006
Outdoor footwear manufacturer focuses on customer satisfaction with improved comfort and product labels that tell consumers what's in their boots.

The Timberland Co. wants consumers to know that it walks the walk. The Stratham, N.H.-based outdoor footwear and apparel manufacturer has built its image around nature. Now the company is bolstering its eco-friendly appearance by placing a "nutritional label" on individual product boxes.

The company -- one of IndustryWeek's IW 50 Best Manufacturers for 2005 -- wants to raise the transparency level of its products for consumers with labels that tell customers where the product was manufactured, how it was produced and its impact on the environment.

As part of the initiative the company also will package footwear in boxes made of 100% recycled fiber, use boxes that contain no chemical glues, use soy-based inks to print labels and print messages in the boxes that encourage consumers to be environmentally conscious.

Timberland Co.
At A Glance

Timberland Co.
Stratham, N.H.
Primary Industry: Apparel
Number of employees: 5,600
2004 In Review
Revenue: $1.5 billion
Profit Margin: 10.2%
Sales Turnover: 2.0
Inventory Turnover: 6.1
Revenue Growth: 11.8%
Return On Assets: 23.8%
Return On Equity: 35.6%
Whether enhancing Timberland's image as good environmental stewards will translate into increased profits remains to be seen, but the company expects 2006 will be a challenging year.

While 2005 ended on a positive note with fourth-quarter profits up 4% from 2004 to $46.9 million, the company forecasts mid single-digit revenue growth and a "moderate" decline in earnings per share in 2006. This year the company will focus on expanding new brands that include SmartWool, Mion and the Timberland Boot Co., said Jeffrey B. Swartz, Timberland's president and CEO, in a Feb. 9 statement.

"While we anticipate continued growth challenges in our U.S. boot business, which will pressure 2006 financial results, we believe the strategies we are advancing will strengthen our brand and business portfolio and enable us to capture the significant potential we see for Timberland," Swartz continued.

In January the company introduced a set of footwear inserts for men designed to improve comfort. Starting in August each pair of Timberland's new Outlier Series of men's shoes will come with a set of PreciseFit inserts that vary in thickness and lock on to a removable footbed, according to a Jan. 17 statement. The inserts are designed to address the 35% of men who have a half-size or greater difference between their left and right feet.

Feet typically are measured by length and width, but the PreciseFit inserts help compensate for differences in girth. The thicker insert minimizes volume in the shoe, while the thinner insert adds volume.

Additionally, the company is taking steps "to preserving the integrity" of its brands by implementing an anti-counterfeiting program. In December of 2005 the company began displaying authorized dealer stickers wherever its brands were being sold. Each sticker contains a unique number and special design elements to prevent duplication.

That same month the company also began an anti-counterfeit advertising campaign. The first advertisements appeared on mobile billboards in New York, Philadelphia and Baltimore, with additional ads and markets under future consideration.

"Our hope is that this enhanced campaign will allow us to build on the progress we're already making in our effort to invade and weaken the counterfeit market -- ultimately protecting our brand and consumers," said Ken Pucker, Timberland's chief operating officer, in a Nov. 28, 2005, statement.

Although improving customer satisfaction is a primary focus for Timberland, the company also places a strong emphasis on creating a positive work environment. The company provides a $3,000 incentive for employees to purchase hybrid vehicles and offers each employee 40 hours of paid leave each year for community service.

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