With all respect, Alan, it is not reasonable to expect a company to lose money on a transaction. Maybe they could remake the shoes and throw in a can of polish, but how much would they have to cough up, not just this time, but to other disgruntled customers?
I don't think they needed to lose money to make it right. If I were him, I would have been happy to receive an offer of repair + a second pair at cost. Either that, or since they sold him a pair of defective shoes - seconds - he should have paid that discounted cost.