Keds Is Discontinuing U.S. Footwear Business (Published 1978) (2024)

Uniroyal, one of tw.., nation's largest producers of footwear, announced yesterday that after 86 years it was getting out of the footwear business in the United States.

Its Keds, Pro‐Keds and other lines of domestic casual and athletic shoes accounted last year for about $150 million in sales but contributed substantially to a $2.7 million dollar loss in its leisuresports division.

The company said yesterday that it had signed a letter of intent to sell its United States footwear business to a newly formed group headed by Oxalaga International Enterprises of New York, with Jonas Senter, president. The purchase price was not given but Uniroyal said that several major New York banks had guaranteed payment.

Low‐wage imports from such countries as South Korea and Taiwan, the high‐labor intensity of the American footwear industry and the effects of the 140‐day rubber industry strike seriously hurt Uniroyal's domestic shoe business, a Uniroyal spokesman said yesterday. However,'he added, Uniroyal is currently involved in a major restructuring program in which it is emphasizing its profitable businesses and its move to close out its United States footwear operations stems from the company's decision to “concentrate its ‘growth in other segments of the business.” Those divisions being given major emphasis are Uniroyal's chemical-rubber-plastics materials, fabricated rubber and plastics products and tires.

The purchasing group will receive the worldwide rights to Uniroyal's American brand names, including Reds casual shoes, PRO‐Keds profes

sional footwear. Grasshoppers women's casual fashion shoes, Sperry Top‐Sider nautical shoes and Royal/ Red Ball fishing footwear. The purchasers also will obtain Uniroyal's Dublin, Ga., plant, which has more than 500 employees. Mr. Senter was identified as having been involved in the footwear business for some 30 years and is currently chairman of CITC Industries, New York, a 20‐year old operation involved in footwear marketing and sales both in the United States, Europe, South America, and the Orient.

For Uniroyal, formerly known as the United States Rubber Company, the discontinuance of its domestic Keds operation marks the end of its original product which, as the company spokesman indicated, had been “historically quite profitable.” But imports, the rubber strike and high costs had robbed domestic footwear of its profits, he said, in addition to which the lead time in what essentially became a “fashion business,” became an onerous problem. As a result of the 1976 rubber-industry strike, “We didn't even have styles in 1976 for our salesmen to show.”

On simple, basic models, he said, the American footwear industry can price its footwear at about the same levels as the foreign models but on the morecomplex models, those where a combination of fabrics represent a fashion content, the foreign goods are about 20 percent less expensive than the American products. Currently, it is estimated in the shoe trade that imports of soft shoes, those known as sneakers, represent more than 80 percent of the domestic market.

Uniroyal originally wanted to call its shoes “Peds,” but ran into some conflicting registrations, thought about “Veds” and in the end opted for “Keds.” Some 40,000 American shoe stores sell Keds and the other Uniroyal brands and, according to yesterday's announcement the new owners plan to “vigorously” promote those brands through traditional retail channels. Uniroyal's sale does not involve golf and golf clothing or footwear produced in Latin American, Europe and the Far East.