NMF Making Shoes and Profit to Boot at Wynne Plant

Neil Munro and his architect wife, Martha Jane Murray, are proving that sometimes smaller is better.

Munro is back working in Wynne, where he first got into the shoe manufacturing business 30 years ago. But this time, he and Martha are the owners of the Addison Shoe Co., the manufacturing arm of NMF Inc.

And at a time when most of the shoes Americans buy are made in other countries and many U.S. shoe companies have gone bankrupt, NMF is turning out shoes and boots that are sold in high-end stores — and making a profit.

Munro & Co. of Hot Springs, for whom Neil worked from 1979 to 2007, was set to close the Addison plant when Neil, co-president of Munro & Co. at the time, asked to buy the more than 50-year-old plant from his father, Don Munro, a legend in the shoe industry.

Neil and Martha, in setting up the totally separate company, wanted the opportunity to save 89 jobs — down from a peak of more than 550 in the plant’s heyday. Martha, having grown up at Wynne, felt a particular calling to help the local workers.

After forming NMF in May 2007, the couple put their life savings into the project, but needed financial partners to help buy the factory and its existing contracts.

Munro said the first entity to express interest in keeping the Addison plant open was the Enterprise Corporation of the Delta, a community development institution that provides financial and technical assistance to stimulate business and community development in the Delta regions of Arkansas, Louisiana and Mississippi.

But ECD wanted Munro also to seek financial assistance locally, and he went to Cross County Bank and First National Bank of Wynne, both of which also had an interest in helping a local business.

Munro also received help from the Arkansas Economic Development Commission in the form of incentives through its Arkansas Advantage program, which offers a state income tax credit for creating new jobs. In NMF’s case, that amounts to 4 percent of payroll for five years.

The company also was eligible for the AEDC’s sales and use tax credit program, a performance-based incentive available to businesses for investing in new equipment or new construction, expansion or modernization.

The final piece of the puzzle came when the city of Wynne received a $1 million Community Development Block Grant from AEDC to be used as a loan to the company.

With the money in place and the factory bought, the newly formed business was ready to go and grow.

Munro knew from his past experience, however, that while a large operation like Munro & Co. had economies of scale, there were also huge swings in production that meant a lot of hiring when production was up and a lot of layoffs when production dropped.

Munro was looking for stability for his workers, so he chose to open the plant on a much smaller scale and grow gradually.

That has proven to be a wise decision. “We downsized just in time,” Munro said. “The company has been better able to weather the recession because of its smaller size. We can control it better.”

He said the recession had affected some of the larger companies far more because they were forced to lay off workers as production slowed.

Employment at the Addison plant has grown from those initial 89 workers to 187 as of last week.

In its prime, the Addison plant turned out about 6,000 pairs of shoes a day. Munro said the factory is currently making about 1,100 pairs a day, with a goal of reaching 1,400 to 1,500 pairs a day by the end of the year. While the plant is operating on a much smaller scale, Munro said it was manageable considering the state of the economy.

Munro’s long-range goal is to grow — the number of workers, of course, but also their wages and benefits.

Meeting Clients’ Needs
The key to the company’s success, Munro said, is that it can do anything its clients want.

About 75 percent of the shoes and boots manufactured at the plant are under a private label banner — made for companies such as The Frye Co. and the Red Wing Shoe Co. Frye boots, although around since 1863, became a popular fashion sensation after showing up on the “Sex and the City” girls, and Addison makes the bulk of them. They run upwards of $300 a pair.

The company also has had a history of making boots and shoes for the military. Although it currently has no military contract, it is expecting one soon that will allow continued growth.

The other 25 percent of the business comes from the Neil M brand of shoes, which are sold in the upscale Nordstrom stores and high-end men’s clothing stores. The dress and casual shoes compete with brands such as Ecco, Cole Haan and Johnston & Murphy and run from $175 to $275 a pair. They can be found at stores such as Mr. Wick’s, Greenhaw’s and Bauman’s in Little Rock.

The company recently began making those trendy shoes for the Icon Co. that feature works from world-renowned artists printed on the leather. They sell for up to $300 a pair.

Because of the highly competitive nature of the shoemaking business, Munro won’t disclose his revenue or what he and his wife invested in buying the plant and in startup costs.

Even though Americans buy some $25 billion worth of shoes each year, only about 100 shoe manufacturers remain in the country. Most of the shoemakers that are left are smaller than they used to be, with fewer than 100 employees and revenue of about $10 million, according to an industry overview by Hoover’s Inc. Average revenue is about $100,000 per employee, the report said.

The major shoe companies in the United States, including Nike, Reebok, Brown Shoe and Timberland, are mainly owners of brand names that source their shoes from the small independent manufacturers, which compete fiercely for the contracts.  

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