Company Overview

Weyco Group (NASDAQ:WEYS) is a producer of footwear for casual, fashion and dress lifestyles, with well-known brands such as Florsheim, Stacy Adams, and Nunn Bush. Based in Wisconsin, Weyco primarily sells shoes in the United States and also has a small presence in Europe, Canada, Australia, Asia Pacific, and South Africa. Recently, Weyco has suffered from a depreciation in the US Dollar and faces the consumer trend of direct buying from wholesalers. In 2011, Weyco acquired The Combs Company, which focuses on waterproof shoes and boots, which will allow Weyco to expand its presence in the outdoor recreation shoe market.[1]

Business Growth

In FY2010, Weyco reported revenues of $229 million, a 2% increase year-over-year. [2] This growth was due to strong sales from its largest customer, J.C. Penney (JCP), which accounted for 12% of sales. Additionally, Weyco's sales are segmented into the wholesale and retail segments, and Weyco's acquisition of Florsheim strengthened revenues from its wholesale segment. [3]

Trends and Forces

Weakening of the U.S. Dollars Increase Costs of Goods Sold For Weyco

Because Weyco outsources almost all of its shoe production, the company is sensitive to currency valuation changes. Weyco purchases shoes from suppliers located in China, India, and Brazil, [4] its costs are directly affected by the USD exchange rate with the Chinese Renminbi (CNY) , Indian Rupee (INR), and the Brazilian Rea (BRL). The USD has been depreciating relative to these currencies in recent years, which drive up the Cost of Goods Sold (COGS) for Weyco.

Less Dependence on Wholesalers May Be Detrimental to Weyco's Business

According to IBIS industry reports, "retailers and consumers will increasingly purchase shoes directly from manufacturers, bypassing wholesalers altogether." [5]This trend threatens Weyco's business model as its wholesale distribution segment contributes over 70% of its revenues. [6] Furthermore, wholesalers will be forced to slash prices to stay competitive as more companies take advantage of overseas labor, which is further detrimental to Weyco's top line.


Weyco Group competes with firms that offer footwear for casual, fashion and dress lifestyles.

  • The Timberland Company (TBL) is a producer of footwear, apparel, and accessories products for men, women and children under the Timberland, SmartWool and Howies brands. [7]
  • K-Swiss (KSWS) is a producer of footwear, apparel and accessories under the K-Swiss brand. [8]


  1. Global Data Research Report, Feb 2011
  2. WEYS March 3, 2010 Press Release
  3. Hoover's WEYS
  4. Global Data Research Report, Feb 2011
  5. IBIS Industry Report on Footwear Wholesaling Industry
  6. Hoover's WEYS
  7. Hoover's TBL
  8. Hoover's KSWS
  9. Hoover's KCP
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