City Shoe Shop was established by Billie Shepherd. In 1940, at the age of 21, Ernest Lane was looking for a trade career. Billie hired him to train in his shop for $25 per month for one year. Ernest was hired on full time after his training for $12 per week. I 1942, Shepherd closed his shop and Ernest found his way to Houston.

By 1943, Ernest was back in Palestine with the opportunity to open his own shoe shop in the original City Shoe Shop building. Ernest not only used the same building, but he chose to keep the same name as well. His children, Robert and Marylyn were raised by Ernest and mom, Clara, in the shop. Both children studied at the University of Texas and began their own careers.

In 1988, Robert and wife, Sandra, moved back to Palestine. In the early 2000s, Robert would get off work at the railroad and go to the shop to help his dad. When he retired in 2010, Robert joined his dad full time. Ernest passed away later that year and Robert decided to honor his dad by keeping the shoe shop running.

City Shoe Shop offers a large selection of Nocona, Tony Lama, and Double H western, dress, and work boots. In addition to boots, leather goods such as belts, wallets, and knife sheaths are also available. It is still known in the community for boot and shoe repair as well.