Weyco Group has announced that it will buy the Umi brand of children's shoes, launched in 2004 by Mark Kohlenberg. He will remain president at the brand, and the design and development teams will stay in place as well. A new sales team will be announced. The terms of the acquisition were not announced, but they include the U.K. operations of Umi.
Weyco has also reported that its sales for the first quarter grew by 4 percent to $61.0 million. Net earnings increased by 56 percent to $3.9 million. The gross profit margin climbed by 5.0 percentage points to 38.4 percent.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, fell by 3.7 percent to $44.7 million for the quarter. Wholesale revenues were $44.1 million in the first quarter of 2010, down from $45.6 million in 2009. Licensing revenues were $580,000 in 2010 and $750,000 in 2009. Net wholesale revenues from Stacy Adams footwear were up by 6 percent, while sales of the Nunn Bush and Florsheim brands were down by 12 percent and 3 percent, respectively.
Net sales in the North American retail segment, which include sales from the company's 36 Florsheim retail stores in the U.S. and its internet business, grew by 1.9 percent to $5.3 million. There was the same number of domestic retail stores in the first quarter of 2010 as in the same period of 2009.
Other net sales, which include the wholesale and retail sales of Florsheim Europe and Florsheim Australia, jumped by 52.1 percent to $11.1 million. The increase resulted mainly from the acquisition of the majority interest in Florsheim Australia in January 2009. Additionally, Florsheim Europe's and Florsheim Australia's 2010 net sales also benefited from foreign exchange rate changes.
Operating earnings for the first quarter of 2010 were $5.4 million, up from $3.3 million in 2009. As a percent of sales, operating earnings rose by 3.2 percentage points to 8.9 percent. The increase in earnings from operations was attributable to higher North American wholesale gross earnings this year and increased earnings from the Florsheim Australia business, resulting from the additional 23 days of operations included in this year's results. In the North American wholesale segment, the increased gross earnings were due to higher selling prices on select products, an overall reduction this year in sales to off-price retailers, and cost reductions achieved within the supply chain.