Wolverine Narrows Portfolio Focus to Prioritize Growth Brands
Wolverine Worldwide plans to either divest or license its Keds and Wolverine Leather business segments and is reducing its overall headcount as the company looks to reduce complexity, increase long-term shareholder value, and focus on growing the business of key owned brands.
Keds’ recent history has been a mixed bag. The brand’s third quarter sales rose 36 percent on a constant currency basis due to strong growth outside the U.S., but internal revenue targets were missed for the period due to shipping delays in the U.S. Acquired as part of its May 2012 acquisition of Collective Brands’ Performance & Lifestyle Group for $1.23 billion, Keds has recently been described as a low-profit contributor to Wolverine’s bottom line. In July, as part of a lawsuit settlement, Wolverine sold the trademarks for Keds’ iconic Champion sneaker to Hanesbrands for $90 million.
The Merrell, Saucony, and Sweaty Betty parent is aiming to realize $45 million in savings next year from organizational synergies, indirect cost savings and the workforce reduction and wring out another $20 million from supply chain cost-cutting initiatives that began earlier this year.
In early November, Wolverine Worldwide reduced its fiscal year revenue guidance to 14 percent constant-currency growth at the midpoint to a range of $2.67-2.695 million.