A subsidiary of Warren Buffett’s Berkshire Hathaway Inc. on Thursday said it has acquired a Maine-based shoe manufacturer.
That story may sound familiar to folks who have been around a while. For those who haven’t, I think a little historical context is in order.
The last time Berkshire Hathaway bought a Maine shoe business was in 1993 — and the business was Dexter Shoe.
At the time, Dexter Shoe, which Harold Alfond founded in 1957, employed 1,600 Mainers at retail stores and manufacturing facilities in Dexter, Skowhegan, Milo and Newport. Alfond sold the company to Berkshire Hathaway for $419 million, according to the Bangor Daily News’ archives.
Warren Buffett, known for his sage investments, had this to say at the time:
“Dexter Shoe Co. is exactly the type of business Berkshire Hathaway admires,” Buffett said in a prepared statement quoted by the BDN at the time. “It has a long profitable history, (an) enduring franchise and superb management. Dexter will continue to operate as it has in the past, under its existing management.”
Of course, that’s not what happened. Beginning in 1998, Dexter began shedding jobs, a bit at a time, citing global competition. Then, beginning in 1999, the company began to shutter its manufacturing facilities: first Milo, then Newport, followed by Skowhegan.
A week after the terrorist attacks on 9/11 Dexter Shoe announced it was closing its final manufacturing facility in Maine, the one located in its namesake town of Dexter.
Buffett came to regret his purchase of Dexter Shoe, calling it in 2008 “the worst deal that I’ve made.”
In the 1960s and 70s, the shoe industry employed roughly 30,000 people in Maine. By the time Dexter Shoe shut its doors in 2001, that employment figure had dropped to 3,300, according to the Maine Center for Workforce Research & Information. Today, that figure is roughly 1,300.
I recount the downfall of Dexter Shoe to add an historical angle to Berkshire Hathaway’s participation in the shoe manufacturing business in Maine, not to suggest that Highland Shoe Co., which was acquired this week by Justin Brands, a Berkshire Hathaway subsidiary, faces the same fate.
After all, it’s a different time. People and companies seem to be placing greater value on products made in the U.S.A., which seems to be the strategy behind Justin Brands’ acquisition.
Here’s what Randy Watson, CEO of Justin Brands, had to say about the acquisition of Highland Shoe: “Planting new roots in a market distinctively rich in America’s footwear heritage aligns with our ongoing commitment to domestic manufacturing.”
The shoe business in Maine may never return to its heyday, but that doesn’t mean a smaller, more vibrant industry can’t thrive here.
After all, there still aren’t many things more American than a hand-stitched shoe from Maine.