Weyco Group Inc.’s earnings slid 12.8 percent in the first quarter, to $3.4 million, or 30 cents a share, dragged down in part by acquisition of The Combs Co., owner of the Bogs and Rafters footwear brands. Sales were up 6.7 percent at $65.1 million.
Bogs, acquired on March 2 for $29.3 million in cash plus assumed debt of $3.8 million, had $2.3 million of sales and a small operating loss in March. Weyco believes it will begin to start seeing additional profits from Bogs in the third and fourth quarters, when the majority of Bogs business occurs.
On a conference call, Tom Florsheim, Weyco’s chairman & CEO, said Bog’s operations in Eugene, OR are continuing for several months while Weyco prepares its distribution center in Milwaukee for the addition of the brands.
“We feel that Bogs opens a whole new world to Weyco, the outdoor market is an exciting segment of the shoe industry and fits into the continuing trend toward a more casual lifestyle,” said Florsheim. “The Bogs acquisition represents an important step toward diversifying our brand portfolio.”
The two brands, Bogs and Rafters, had approximately $27 million of sales during 2010 with the majority of those sales under the Bogs brand name.
Overall sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $48.1 million for the quarter, compared with $44.7 million in 2010. Wholesale sales were $47.6 million in the first quarter of 2011, up from $44.1 million in 2010. Wholesale sales of the Nunn Bush and Florsheim brands were up 1 percent and 5 percent, respectively, while Stacy Adams footwear sales were down 4 percent. Sales in its North American retail segment, mainly the Florsheim chain, increased 5.6 percent to $5.6 million in the quarter with comps ahead 8 percent.
