Owner picks new CEO for New Balance Davis to remain as president of footwear, apparel business

BOSTON – Jim Davis, who bought New Balance 35 years ago when it was turning out 30 pairs of shoes a day, is stepping down as CEO of the nearly $1.6 billion-a-year shoe and apparel maker to make way for a new leader from outside the company.

New Balance, which has factories in Maine, said Tuesday that Davis would stay on as chairman of the family-owned firm, but turn over the chief executive’s job to Robert T. DeMartini, a 45-year-old with more than 22 years of experience in the consumer products industry.

“After 35 years of managing the company, we feel that it is time to introduce younger and more progressive management,” said Davis, 62.

Davis’ wife, Anne Davis, will remain vice chairman, and the couple “will remain very involved in the company,” New Balance spokesman Amy Vreeland said.

The Davises own New Balance, and the family this year made Forbes’ list of the world’s richest people, as No. 488 with an estimated $2 billion in wealth.

New Balance was founded in 1906 when a 33-year-old waiter named William Riley decided to build arch supports to ease pain for people who spent all day working on their feet, according to the company.

In the 1960s, the company began offering running shoes in multiple widths, a feature that remains a standard for New Balance shoes and has earned the brand a strong following among avid runners and walkers. New Balance also makes cleats, basketball and tennis sneakers, and athletics apparel.

The company’s production capacity was tiny when Jim Davis bought the company for $100,000 in 1972, but sales took off with a surge in the popularity of running and jogging in the 1970s.

Despite New Balance’s explosive growth, the company remained privately held and followed its own path by prizing function over fashion, word-of-mouth over celebrity endorsements, and an emphasis on domestic production despite cheaper labor costs overseas.

Today, Boston-based New Balance has more than 2,800 employees, with 2006 sales of $1.55 billion. In Maine, it has plants in Norway, Skowhegan and Norridgewock, with a combined work force of about 900.

Davis said DeMartini “brings broad experience, professional qualifications and most importantly, a clear understanding of New Balance’s unique culture. We are confident that he will direct the company in attaining our aggressive business goals while maintaining our corporate value system.”

DeMartini comes to New Balance from Tyson Foods Inc., where he was a vice president in the consumer products division. He also has held positions at Procter & Gamble Co. and at Gillette Co., the Boston-based maker of razor blades and other consumer products that P&G bought in 2005.