Dive Brief:
- Wolverine Worldwide said Thursday that it has terminated CEO Brendan Hoffman and named Christopher Hufnagel president and CEO. Hufnagel joined the company in 2008, has served as president since May and previously held multiple leadership roles at Wolverine.
- Hufnagel joined Wolverine in 2008 “and has served in leadership roles across the organization,” the company said. Hoffman’s termination, effective Aug. 6, was without cause and was not a result of any disagreements relating to the company’s operations or policies, Wolverine said in a regulatory filing.
- The leadership change comes as the company reported a soft second quarter. Revenue fell 17.4% year over year to $589.1 million. Wolverine lowered its full-year guidance Thursday, citing low order demand for global wholesale.
Dive Insight:
Hufnagel now leads an international company with a dozen brands in its portfolio.
In addition to its namesake brand, the company’s portfolio includes Hush Puppies, Sperry, Bates and Stride Rite. Wolverine is also the global licensee for Cat and Harley-Davidson footwear.
Before his appointment as president in May, Hufnagel was president of the company’s active group. In earlier roles at the company, he was president of direct-to-consumer and senior vice president of strategy. Before joining Wolverine Worldwide, Hufnagel held senior leadership roles at Under Armour, Gap and Abercrombie & Fitch.
“Wolverine Worldwide maintains some of the world’s most recognizable and loved lifestyle and footwear brands, and transforming our business to bring the full power of these brands to life will be a key driver of our success,” Hufnagel said in the announcement. “I have had the privilege of working with many teams across this organization over the past 15 years, and we have what it takes to build a stronger, more resilient company.”
Michigan-based Wolverine has moved to refine and restructure its brand portfolio over the last two years by creating three footwear brand categories – work, active and lifestyle. In May, Wolverine said it was “exploring strategic alternatives” for Sperry, which is best known for its boat shoes. The company had also sought to license or divest its Wolverine Leathers business.
Tom Long, chairman of Wolverine Worldwide’s board of directors said Hufnagel has a demonstrated track record of successfully building global brands and a deep understanding of the company, its people and its priorities.
The brand has made efforts to cut costs as it reworks its portfolio. The company in December laid off an undisclosed number of workers in an effort to reduce costs following a reorganization of its brand portfolio. In February, Wolverine sold Keds to Designer Brands, the parent company of shoe retailer DSW, and licensed Hush Puppies to Designer Brands following a partnership with the retailer last year. And two years ago this month, Wolverine acquired the activewear brand Sweaty Betty.
Wolverine’s active segment delivered the strongest performance in Q2 with $383.3 million in revenue, followed by the company’s work segment with $117.8 million. The company said its lifestyle segment reported $74.9 million in revenue. By brand, Merrell, which offers outdoor active footwear like hiking boots, delivered the strongest Q2 performance with $176.7 million in revenue.
But the company also reported $930 million in net debt and about $370 million in liquidity at the end of Q2.
Chief Financial Officer Mike Stornant said they are on track to meet a year-end inventory target of $520 million; inventory at the end of Q2 was $647.9 million.
“In order to accelerate debt pay down, we have plans to sell at least $50 million of non-core assets over the coming months,” Stornant said in a statement. For the rest of the year, Wolverine’s guidance is that revenue will range from $2.26 billion to $2.28 billion, a decline of 10.7% to 10% from the prior year, and net debt is forecast to reach about $850 million.
Editor's note: This story has been updated to reflect the correct spelling of Mike Stornant's name.
