Brooks Running's $70M warehouse failure prepared it for a $1B pandemic sales boom
Its 2019 distribution-center collapse cost Brooks an estimated $70-100M in sales; the rebuild left it battle-tested for 2021 sales up 31% past $1B.
What was changed
In 2019 Brooks Running, the Berkshire Hathaway-owned running-shoe maker, opened a distribution center near Indianapolis meant to speed delivery to the 70% of customers east of the Rockies. The company stress-tested it with about 200 trial orders, then shut its sole existing West Coast center before the launch. The new facility's systems failed anyway: CEO Jim Weber compared it to Fort Knox, full of boxes of shoes the company literally could not get out to customers.
The center's digital configurations could not handle a customer base ranging from independents ordering one pair to national chains ordering thousands. Merchandise sat idle for three months, costing an estimated $70 million to $100 million in sales, and full-speed shipping took another three months to restore. Brooks flew in dozens of headquarters employees to fill orders, updated its software, expanded the center and reconfigured its layout — and institutionalized the lessons as management crisis training, upgraded IT systems and refreshed business-continuity plans.
That preparation met the pandemic. In 2021 sales rose 31% past $1 billion, double the 2016 level, with e-commerce more than double pre-pandemic levels running through the rebuilt distribution system, and market researcher NPD ranked Brooks the top brand in specialty running shoes ahead of Nike. Vietnam lockdowns still cut output — 17 million pairs built against demand for 20 million — but Brooks diversified production into Indonesia and leaned on premium prices of about $150 a shoe to win new manufacturing partners, while ramping its Glycerin and Adrenaline models.
The growth prompted a succession-shaped C-suite move: COO Dan Sheridan added the president title as second-in-command, positioned as the likely successor to Weber, CEO since 2001, as the company targets $2 billion in sales within five years, launches in China and expands its clothing line.
Why it worked
A fragmented customer base — orders from one pair to thousands — produced order variability the new facility's digital configurations could not process.
Brooks had shut its only other distribution center before the launch, so the failure left no fallback and inventory stranded for months.
The rebuild turned the failure into process: crisis training, augmented IT and continuity plans that later absorbed pandemic disruption.
Premium price points made it feasible to add manufacturing partners quickly when Vietnam lockdowns squeezed supply.
What can be applied
An absorbed operations disaster can become institutional crisis muscle: rebuild systems, train for disruption, diversify production — then the next shock finds you ready.
Aftermath
The Indianapolis-area facility ran smoothly by 2022, and Weber expected the supply-chain hangover to clear in the second half of the year. Dan Sheridan's added president title set up a likely CEO succession as Brooks chased a $2 billion sales plan, with China launches and apparel growth flagged as the next white spaces.