~ The company operates on both the production and retail sides of the business.

ST. LOUIS -- Shares of Brown Shoe Co. Inc. soared Tuesday after the company announced record earnings and plans for long-term restructuring aimed at boosting profit margins in coming years.

Shares in the St. Louis-based company rose $6.22 per share, or nearly 16 percent, to close at $45.77 in trading on the New York Stock Exchange.

Brown Shoe operates on both the production and retail sides of the business. It operates the Famous Footwear retail chain and produces its own brands like Buster Brown, which it sells though department stores and other outlets.

Brown Shoe said its cost-cutting plan will include closing its office in Needham, Mass., as well as a distribution center in Dover, N.H. The Needham office will be consolidated with offices in New York. The firm will also outsource its Canadian wholesale business to a third party.

It wasn't clear how many jobs would be lost. A company spokesman did not return several calls seeking comment.

The plan is expected to yield between $10 million and $12 million in aftertax savings next year and between $17 million and $20 million in 2008.

For the quarter ended Oct. 28, the company reported net income of $26.9 million, or 93 cents per share, compared to $19.8 million, or 70 cents per share, during the quarter last year. Revenue rose to $676.8 million from $617.7 million in the same period last year.

The earnings beat expectations on Wall Street, where analysts expected 84 cents per share on sales of $652.7 million, according to a poll by Thomson Financial.

Brown Shoe's cost-cutting plan follows a series of changes first begun in 2001, said analyst Ronald Hottovy with Next Generation Equity Research in Chicago.

Hottovy said the changes have had one goal in mind -- speeding up Brown Shoe's product development and supply chain to get new products to consumers as quickly as possible.

In many ways, selling shoes boils down to a good old fashioned foot race, Hottovy said. In the decidedly low-tech industry, the key to success isn't developing new blockbuster products. It's all about keeping pace with subtle changes in fashion.

"Generally speaking, if you're ahead of the fashion trend, you have room to make a lot of money here," Hottovy said, noting that 2005 was a record year for footwear retailers who grossed about $42 billion sales in the U.S.

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On the Net:

Brown Shoe Co. Inc.: http://www.brownshoe.com