FORT WORTH – Garth Brooks, Randy Travis and Vince Gill have all kicked some life into a country music craze that has helped John Justin Jr. sell boots. But never underestimate the value of a former astronaut named Maurice Minnifield of Cicely, Alaska.
The fictional backwater town – the setting for TV’s “Northern Exposure” and home to Minnifield (played by actor-cowboy Barry Corbin) – sells Justin boots in its general store. Corbin is in Fort Worth often to visit relatives and do things like drive a herd of cattle from the Stockyards down the Trinity River to the Will Rogers Memorial Complex to kick off the National Cutting Horse Association World Championship Futurity.
One of the other things he does is stop by Justin Boot Co.’s Fort Worth factory to pick up a new pair of boots. J.T. Dickenson, Justin Industries’ president and chief operating officer, said Corbin helped arrange for the company’s wares to be displayed on the CBS show in the store and on the feet of cast members.
In itself, that exposure probably sells few pairs of boots, but it is indicative of the northern boom Justin is experiencing in boot sales. In such places as New Jersey, Michigan, Ohio and elsewhere, western boots have become a fashion favorite, Dickenson said. “Watch the `Tonight Show’ or `David Letterman,’ the guests that come on are wearing boots in a lot of instances,” he said. “I think there’s a more laid-back lifestyle in the U.S. today, and it’s been good for us. This footwear is comfortable and it’s easy to wear, particularly on the weekend. People can jump into their jeans and boots on Friday night and be comfortable and fashionable all at the same time,” Dickenson said.
Although southern states such as Texas and Oklahoma are still the company’s bread and butter, the nationwide surge in sales of western wear has helped push Justin Industries’ revenues to record levels, said John Justin Jr., the firm’s chairman and chief executive officer.
The company is producing 15,000 pairs a day and expects to end 1992 having made between 3.5 million and 4 million pairs of Justin, Nocona and Tony Lama boots. Analysts estimate that Justin Industries’ footwear segment will end the year with a 22 percent boost in footwear sales and a 26 percent growth in operating profits.
“We’re way ahead, and we hope to end the year way ahead,” Justin said. “This should be a record year for us. “A lot of it is tied to the growing popularity of country music, which, of course, has led to the opening of clubs that play country music.
“Obviously, any time that situation occurs, western wear will also grow in popularity, which is good for all three of our main brands. Every western wear store has to have at least two of those three brands to remain competitive in the market today.”
Wall Street is kicking up its heels over the company’s success in boots and with its Acme Brick subsidiary, which has capitalized on a recovering Southwest home construction market. Acme’s plants are running near 100 percent capacity, compared with about 80 percent in 1991.
“In the last five years, there have been between 110,000 and 115,000 houses built in the seven-state region we call our core market,” said Ed Stout, Acme Brick president. “That’s a 75 percent decline from 1983 and 1984, when sales were over 400,000. In 1992, we will wind up at 135,000 in our area, which is an improvement.
“It’s not the recovery that is all that great. It’s other things, like increased brick usage, greater market penetration and a larger customer base.”
In trading on Wall Street last week, Justin Industries stock soared past $35 a share, and some say it could top $40 within the next few weeks. In fact, the stock has nearly tripled from its position at the beginning of the year after accounting for a midyear split.
“Both areas (boots and bricks) are doing excellently,” said Jessica Tully, an analyst with The Principal-Eppler Guerin Turner in Dallas. “The boot business is going well everywhere and should be up over 20 percent this year. On top of that, the brick business is responding well to the growth in housing starts.
“Housing starts in Texas and in the nearby states where Acme’s home market is, are probably up a combined 20 percent this year.”
In the first nine months of 1992, Justin Industries sales were $314.6 million, up from $251.7 million in the same period a year ago. Profits were at $15.8 million, a jump from the $3.3 million in the first nine months of 1991. Justin sees the company’s sales growing steadily over the next three to five years.
Tully said that Justin Industries’ success and the boom in western wear is not just a short-lived spike or the result of a fashion trend. In her December report on the company, she notes that country-western has become the most popular form of music on the radio. Its popularity has grown so much that Gaylord Entertainment Co., owner of The Nashville Network, TNN and Country Music Television, is launching a country music network in Europe.
“It’s not a fad,” Tully said. “I don’t think Gaylord Entertainment would be investing in a country music station in Europe if it were just a fad.”
Justin Industries has done well in both boots and bricks, and its competition in both businesses has suffered through lean times. Acme has seen its sales plunge since the home construction heyday of the early 1980s, but not once has it failed to show a profit. And the company’s boot business has grown while once powerful brands have scraped by.
Industry insiders say that Chicago-based Farley Industries is looking for a buyer for the well-known Acme Boots. Dickenson acknowledged that Justin has been approached about Acme but said the company has no interest in an acquisition now.
Justin Industries bought one-time rival Tony Lama during a 1991 takeover attempt and was criticized by its Missouri-based suitors. When Justin Industries acquired Tony Lama for $19 million and assumption of debt, the El Paso company was losing money and had lost much of its once-dedicated customer base.
Today, Tony Lama is a profitable unit, and Justin is considering expanding production capacity at the company’s El Paso plant. “Our costs are very competitive now and we have room to grow,” Dickenson said. “We can add 1,000 pair a day without too much trouble. We would have to add people, but the plant capacity is there.”
The company produces about 3,000 pairs of Tony Lama boots a day in El Paso, up from 1,700 when it acquired the company. It makes 2,000 pairs of Nocona Boots and 10,000 pairs of Justin boots daily. Dickenson said the company will boost production of its Justin Boot line by moving production of Chippewa winter boots and Diamond J work boots to a new facility in Puerto Rico next year.
“I’m really pleased,” said Justin, who at 75 is arguably the top chief executive officer in Fort Worth based on balance sheet results. “I can’t remember a time when we’ve been in a better position to grow.” By Michael D. Towle, The New York Times