Dive Brief:
- Wolverine World Wide is “exploring strategic alternatives” for its heritage Sperry brand of boatwear shoes.
- In a statement discussing its first quarter earnings, Brendan Hoffman, president and CEO, said, "We need to focus our efforts and investments on our Active and Work Groups, specifically our growth brands — Merrell, Saucony and Sweaty Betty. The recent sale of Keds and pending licensing of Hush Puppies will enable this focus, and these transitions are well underway.”
- Earlier this year Designer Brands, the parent company of shoe retailer DSW, made deals with Wolverine to buy the Keds brand entirely, and acquire the license for the Hush Puppies footwear brand after a previous year long exclusive partnership.
Dive Insight:
Last year, Wolverine restructured its brand group, segmenting its footwear into three categories: active, work and lifestyle. The company now appears to be siphoning off the brands of its struggling lifestyle category — Keds, Hush Puppies and Sperry — in order to focus on its core competencies.
Hoffman said during the earnings call that the lifestyle group saw a revenue decline of 8%, while the active group, which includes Merrell, Saucony and Sweaty Betty, delivered 12% revenue growth on a reported basis and 15% revenue growth in constant currency. The work group, which includes Wolverine, Caterpillar and Bates, saw a revenue decline of 17%, which Hoffman attributed to “normalized phasing of Caterpillar International spring product flow” and customer demand for lower priced products.
Discussing the decision to seek outside help regarding Sperry, Hoffman said that removing the brand from Wolverine’s lineup would allow the company to put more resources behind Merrell's lifestyle business and expand Saucony beyond its core active and lifestyle consumer base. The move would also help focus efforts to stabilize the Sweaty Betty brand, which saw a first quarter revenue decrease of 3% in constant currency and 11% on a reported basis.
Hoffman said the 88-year-old Sperry brand “is a special brand with unique authenticity and heritage. It is the brand I was most familiar with when I joined the company. I'm convinced that with the right focus and investment, this brand has a very bright future.”
There’s been no word yet on what the new path for Sperry would be, but options could include a possible joint venture, a licensing deal or an outright sale.
Last year, Designer Brands said it planned to double its sales of owned brands, and its recent deals with Wolverine could indicate that a Sperry deal is not far behind.
However, Designer Brands has been focused primarily on performance athletic and outdoor footwear categories, and Sperry is more of a lifestyle brand in line with VFC-owned Vans, or Airwalk, which is owned by Authentic Brands Group. In April, ABG acquired Boardriders, and appears to be in a growth period. The brand management company currently has over 40 brands in its portfolio, including Reebok, Frye and Nine West.
