Footwear Insight

6 • Footwear Insight ~ January/February 2023 footwearinsight.com By Bob McGee W olverine Worldwide is focused on growing the business of its most suc- cessful owned brands. Within its brand portfolio, the company is expected to put more resources behind its five largest businesses — Merrell, Saucony, Sperry, Wolverine, and Sweaty Betty — and likely look to shed more of its smaller, less profitable brands. Late last year, Wolverine announced plans to either divest or license its Keds and Wolverine Leather business segments — both are currently in the active sale process. Wolverine, which put a plan in motion to reduce its overall headcount, is looking to reduce complexity and increase long-term shareholder value. Keds' recent history for Wolverine had been a mixed bag. Acquired as part of Wolverine's 2012 acquisition of Collective Brands' Performance & Lifestyle Group for $1.23 billion, Keds had recently been described as a low-profit contributor to Wolverine's bottom line. In late 2022, Wolverine Worldwide reor- ganized its portfolio of brands into three reportable segments — e Active Group includes Merrell, Saucony, Sweaty Betty and Chaco; The Work Group includes Wolverine, Cat, Bates, Harley-Davidson and HyTest; e Lifestyle Group includes Sperry and Hush Puppies. e Merrell, Saucony and Sperry parent said full year revenues rose 11 percent or 14 percent on a constant-currency basis to $2.685 billion with the Merrell, Saucony, and Wolverine brands achieving record sales. e company's top five brands rep- resented 73 percent of all revenues and the company's Direct-To-Consumer penetration grew to 26 percent of revenues from 15 percent in 2019. CEO Brendan Hoffman, talking at the ICR Conference in January, said the company adopted a 100-day plan aer being caught with "a lot" of excess inventory that involved reducing the total amount and gridlock in company warehouses. "Agility is something this company needs to learn," Hoffman said, later adding, "We are looking for simplicity in everything we do." at strategy includes trimming SKU counts as needed, reducing the current inbound flow of goods by 50 percent year- over-year, and bringing inventories to a "normal level" over the next 2 to 3 quarters and to approximately $600 million by the end of 2023. Overall, Wolverine is aiming to evolve its digital business and no longer be wholesale segment-driven only as it continues work- ing to grow its international business that hit 41 percent of total revenues in 2022. n Wolverine Prioritizes its Growth Brands STRATEGY THE FOOTWEAR EYE

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