Wolverine Worldwide, parent company of Merrell, Saucony, Chaco, and other brands, announced it has sold boat-shoe brand Sperry to Authentic Brands Group and the Aldo Group.
The deal closed on Jan. 10, and is expected to generate about $130 million in the first quarter to pay down debt.
“The sale of the Sperry brand is the next step in our turnaround and strategic transformation,” said Chris Hufnagel, Wolverine Worldwide’s president and CEO, in a release.
The announcement builds on the company’s previously announced turnaround actions that collectively generated nearly $250 million in cash in 2023, according to Wolverine.
“In a very short time, we have meaningfully reshaped Wolverine Worldwide – simplifying the portfolio, reducing our debt, and redesigning the organization to drive improved performance and profitability,” Hufnagel added.
As of Dec. 30, 2023 the company expected to see full-year and fourth quarter reported revenue of approximately $2.24 billion and $527 million, respectively, in line with its November guidance. For the same period, it also expected full-year and fourth quarter adjusted gross margin above 39% and 36%, respectively, also in line with its November guidance.
In November, Wolverine Worldwide announced layoffs and other cost-saving measures to save up to $215 million as the company grappled with inventory and wholesale challenges.
Wolverine’s revenue for the third quarter ended Sept. 30 was $527.7 million, down 24.7% in constant currency compared to the prior-year quarter.
Footwear brand Merrell posted revenue of $157 million for the quarter, down 25.2% in constant currency compared to the same quarter last year, and Saucony’s revenue was $116.4 million for the quarter, down 14.6%.
Brands At Center of Company Reorg
At the annual ICR Conference earlier this week in Orlando, Florida, Hufnagel focused his presentation on the future of the company.
“At the highest level, we’re going to become great global brand builders, consumer-obsessed brand builders focused on building awesome products, telling amazing stories, and driving the business each and every day with powerful brands and powerful platforms,” he said.
Hufnagel added that Wolverine Worldwide has reorganized the company over the past handful of months to put its brands “at the center of everything.”
The company’s debt was down 26% at the end of 2023 compared to the year prior, and inventory is down 38% compared to a year ago, according to Hufnagel.
“We’re on much firmer footing as we enter 2024,” he added.
Merrell Focus on Trail
About Merrell, Hufnagel said the brand was well-positioned to adapt to the trend of faster and lighter hiking shoes. He highlighted the Merrell Moab Speed 2 Mid GTX winning an ISPO award in 2023 for best new trail runner. The brand’s Agility Peak 5 won the same award in 2022.
Beyond trail running, Hufnagel emphasized Merrell tapping into the lifestyle market.
“Merrell’s ability to grow beyond the trail is gonna be critically important,” he said.
He pointed to the Wrapt shoe as a versatile option for retailers, despite wholesalers’ initial reluctance to carry it.
“They didn’t believe we could sell this,” Hufnagel said. “We put this on Merrell.com and sold out in a handful of weeks.”
The success of the shoe shows Merrell’s ability to use its consumer platforms to test products before launching them, he added.
Saucony As Elite Running Shoe
As for Saucony, Hufnagel sees the brand as being led by the elite running category, and highlighted the Endorphin Pro 4 as a standout product, slated to drop in March.
“This is the year of the super shoe, and we feel fantastic about Saucony’s position,” he said.
Similar to Merrell, Saucony is making a dedicated push for the lifestyle footwear market as well with its Originals collection.
“Expanding this fashion lifestyle model is critically important for us,” Hufnagel said. “Saucony has been great at both ends of the spectrum – elite run and niche sneakerheads.”
Another shoe he pointed out will be released in July, the Hurricane 24, with a broad platform and vertical side walls.
Forward Look
Looking ahead, Hufnagel said he’s viewing Wolverine Worldwide’s turnaround as a story with three chapters: A stabilization chapter, a transformation chapter, and growth chapter.
“We’ve made tremendous progress towards stabilization in a few short months,” he added. “The winners today are the brands that are bringing new, innovative products and telling emotional stories. That’s where we have to get better and where we have to invest.”
Bart Schaneman can be reached at [email protected].
