K-Swiss Company Analysis

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Brief History – K-Swiss, Inc. is a shoe company founded in 1966 by two brothers from Switzerland, Art and Ernie Brunner, who moved to Southern California in 1960. The two brothers were former top skiers, and took a heavy interest in tennis when they moved to the United States. Finding the current canvas style tennis shoe to be disappointing, they decided to construct and sell their own high performance tennis shoe. This shoe featured all-leather material, a shock-absorbing insole, a one-piece rubber outsole with a reinforced toe design, a d-ring lacing system, and a five stripe system down the side of the shoe to resist stretching. These features resulted in a high quality shoe priced at $20—approximately 2.5 times the price of the canvas tennis shoe at the time.

In 1986, Stephen Nichols and a group of investors purchased the company for $20 million. Nichols' basis for purchasing the company was that the design of the K-Swiss classic shoe would remain appealing for 50 years. Under his leadership, the marketing strategy was enhanced and the product base grew. K-Swiss became popular on a national level in the late 1990s with commercials on MTV and other cable networks. In 2001, K-Swiss acquired Royal Elastics, an Australian shoe company focused on stretch-fit closure shoe systems which required no laces. Today, K-Swiss remains a small company with 510 employees, yet generated $508 million in revenues in 2005.

Locations of Operation – K-Swiss, Inc. has both its main headquarters and its primary distribution center located in California. K-Swiss also has a strong employee base in Europe and Asia to support marketing, production, and distribution in those areas.

Corporate Structure –

International Operations – K-Swiss conducts business in 66 countries worldwide. This activity is expected to achieve $100 Million in revenue for 2006. K-Swiss conducts most of its International business through contracted sales staff and distributors. This staff...
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