Weyco Group changes strategy for its Florsheim brand in India
Bengaluru: Weyco Group Inc., a US-based premium footwear maker, has signed an exclusive licensing agreement with Indian firm Sara Group’s Samar Lifestyle Pvt. Ltd to produce and distribute its Florsheim brand of dress shoes in India, Bangladesh, Nepal and Bhutan.
India has been a sourcing and manufacturing hub for Weyco for more than 30 years. The company has also been selling Florsheim shoes through retail stores in a limited way for the past decade. But with its key US and Europe markets saturated, Weyco now sees India as its single-biggest opportunity and has tied up with local firm Samar Lifestyle to expand its business in the country.
“We feel that there’s a huge opportunity for us at this time to launch in a much bigger way and that’s why we’ve partnered with Samar Lifestyle, who have the local expertise and know the consumer and how to build brick-and-mortar stores in this market,” Weyco’s chairman and chief executive Thomas W. Florsheim Jr. said in an interview.
“We have pretty aggressive plans to grow the business six times over the next 4-5 years,” he added.
The average per capita shoe ownership in the mature markets of US and Western Europe is around seven pairs, while in India that average figure is just about 1.7. But this is set to increase to four in the next four years and that’s where the opportunity lies, executives at the two companies said.
Weyco and Samar Lifestyle plan to open one Florsheim brick-and-mortar exclusive brand outlet (EBO) this year and four more in 2019. The first two stores will be opened in Mumbai and Delhi. The target is to take that count to 25 over the next 4-5 years, build up the brand’s multi-brand retail presence and possibly tie up with a couple of e-commerce companies.
“More than 40% of Florsheim’s business comes from outside North America. It’s a truly global brand and for us it’s going to be a good learning experience and will allow us to introduce products ahead of the curve,” said Mridumesh Kumar Rai, president of Samar Lifestyle.
Family-run Weyco—which earns around $300 billion in overall sales was set up by W. Florsheim Jr’s great-great-grandfather in 1892 and is now run by him and his brother. The company used to own factories across the US but now makes all its shoes in India, China and Italy at contract manufacturing facilities.
Samar Lifestyle owns the premium shoe brand Ruosh and is part of the $200 million Sara Group, which also owns restaurant chains Barbeque Nation and Onesta.
“Like apparel, the (footwear) segment is clearly set up for fragmentation. It will be more in the upper-end of the market, which will be the fastest-growing among all. There is an opportunity for Florsheim also and if they are doing it seriously now that’s a good thing to do. They should have done it earlier,” said Harminder Sahni, founder and managing director of retail consultancy Wazir Advisors.
Prices of Florsheim shoes will start at Rs5,000 and go up to Rs14,000, with an average retail price of Rs8,000. Roughly 20% of the global sourcing for the brand comes from India’s Chennai-Ambur belt.