Despite customs duties and dark clouds ahead, some US manufacturers are not going to forsake their Chinese suppliers. Yet, however, they want something in return for their faithfulness. Among others, Weyco footwear group, which are about to revise prices and supply contracts. Weyco currently hold a large portfolio of brands, such as Florsheim, Nunn Bush, Stacy Adams, Umi, Brass Boot and Nunn Bush NXXT.
Aiming to soften the impact
Pointed out Weyco: “While striving to soften the overall effects of tariff costs, we have negotiated some price adjustment”. More specifically, they have been raising wholesale prices with regard to many of their clients. In addition, most of all, many of their Chinese suppliers have been decreasing the prices of various items”. Including leather, as illustrated by the US group in the company’s analytical report over the third quarter.
Sales and profits have been increasing
“In 2019 third quarter, net sales amounted to 82.5 million dollars, therefore increasing by 5% compared to 2018 third quarter. Likewise, net profits have been rising by 5%, up to 6.6 million dollars”, they remarked in the statement. Yet, last August US government announced they would impose an additional customs duty (+15%) on footwear imported from China.
Prospective effects are unknown (so far)
Customs duty imposed on leather products, which entered into force on September 1st, is bound to affect a few brands, namely Florsheim, Stacy Adams and Nunn Bush. For the time being, such tariff “has had very little consequences on the financial outcomes achieved in 2019 third quarter; yet, at present, we do not know much about its prospective effects on our gross profit margins, deal results and overall financial statements”.
Satisfaction alongside difficulties
Thomas Florsheim Jr., chief executive officer of the company, pointed out: “We are happy about our performance and, at the same time, we look forward to taking advantage of this momentum, while gearing up for winter sales. Our business abroad keeps struggling in a difficult scenario, affected by a slow sales trend. Indeed, we are striving hard to reduce costs, improve our gross revenue margins and generate profits”.
Picture taken from weycogroup.com