Actions Simplify Business Model and Generate
$70 Million in Proceeds
Wolverine World Wide, Inc. (“Wolverine Worldwide” or the
“Company”) (NYSE: WWW) announced strategic actions that further
focus the Company’s portfolio and advance its ongoing
transformation into a consumer-obsessed growth company.
“We’ve taken fast, bold, and decisive actions to stabilize the
Company today, while working to transform Wolverine Worldwide for
the future," said Chris Hufnagel, President and Chief Executive
Officer. “Our actions over the past four months have served to
simplify our business model, reduce our cost structure, and
strengthen our balance sheet. While our work isn't done, we enter
the new year with a clear vision for the future, enhanced ability
to invest in our brands and platforms, and ultimately, a better
position to deliver stronger returns for our shareholders.”
New Operating Model for Merrell and Saucony
in China
Strategic actions announced today include evolving and
optimizing the Company’s successful Merrell and Saucony joint
venture in China by entering into agreements for a total amount of
$61 million to (a) accelerate an existing option to sell a minority
ownership interest in the entity that owns the Saucony intellectual
property in China to Xtep, its joint venture partner, and (b) sell
the Company’s equity interest in the Merrell and Saucony joint
venture entities to Xtep.
Wolverine Worldwide formed a joint venture with Xtep in 2019 to
launch the Merrell and Saucony brands in China. Xtep is a powerful
vertical player in the fast-growing sportswear market, with over
8,200 stores in Asia-Pacific, North America, and EMEA, and a strong
network of distributors and shopping mall operators.
Under the joint venture agreement, Xtep held the option to
purchase a 40% minority ownership interest in the entity that owns
the Saucony intellectual property in China if the business met
certain financial targets. Due to the early success and
profitability of Saucony in China, the Company and Xtep have agreed
to accelerate the exercise of this purchase option.
The Company and Xtep have also agreed for the Company to sell
its equity interest in the Merrell and Saucony joint venture
entities to a wholly-owned subsidiary of Xtep, transitioning the
business from a joint venture model to a license and distribution
rights model under which Xtep will exclusively carry out the
development, marketing and distribution of footwear, apparel and
accessories for the Saucony and Merrell brands in China. This
evolution underscores the growth prospects of these two brands in
China, and is the result of the early success and maturity of the
joint venture. The new operating model is expected to further
leverage Xtep’s expertise and significant resources in China,
unleashing the brands’ full potential in this key market while
allowing Wolverine Worldwide to focus on brand-building by
developing awesome products and telling amazing stories across its
global footprint.
Selling Asia-based Leathers Business
Wolverine Worldwide has entered into a definitive agreement to
sell its Asia-based Wolverine Leathers business to Interhides
Public Company Limited, a current materials vendor of the Company,
for approximately $9 million. This completes the Company’s
previously announced objective to sell its Wolverine Leathers
business – further focusing the Company’s portfolio.
The actions announced today are in addition to the Company’s
previously-announced transactions, including:
- Selling Keds in February 2023 for over $90 million;
- Selling the Hush Puppies intellectual property in China, Hong
Kong, and Macau in August 2023 for approximately $58.8 million;
and
- Selling the U.S. Wolverine Leathers business in August 2023 for
approximately $6 million;
The previously-announced strategic alternatives process for the
Company’s Sperry brand is ongoing.
Wolverine will provide more detail regarding these actions and
other strategic initiatives at the Annual ICR Conference on January
8, 2024.
ABOUT WOLVERINE WORLDWIDE
Founded in 1883 on the belief in the possibility of opportunity,
Wolverine World Wide, Inc. (NYSE:WWW) is one of the world’s leading
marketers and licensors of branded casual, active lifestyle, work,
outdoor sport, athletic, children's and uniform footwear and
apparel. Through a diverse portfolio of highly recognized brands,
our products are designed to empower, engage and inspire our
consumers every step of the way. The Company’s portfolio includes
Merrell®, Saucony®, Sperry®, Sweaty Betty®, Hush Puppies®,
Wolverine®, Chaco®, Bates®, HYTEST®, and Stride Rite®. Wolverine
Worldwide is also the global footwear licensee of the popular
brands Cat® and Harley-Davidson®. Based in Rockford, Michigan, for
140 years, the Company's products are carried by leading retailers
in the U.S. and globally in approximately 170 countries and
territories. For additional information, please visit our website,
www.wolverineworldwide.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements,
including statements regarding: the Company's strategic
transformation, including the expected benefits of the divestiture
of non-core assets such as an enhanced ability to invest in the
Company’s brands and platforms, and placing the Company in a better
position to deliver stronger returns to its shareholders; and
growth prospects for the Merrell and Saucony brands in China. In
addition, words such as “estimates,” “anticipates,” “believes,”
“forecasts,” “step,” “plans,” “predicts,” “focused,” “projects,”
“outlook,” “is likely,” “expects,” “intends,” “should,” “will,”
“confident,” variations of such words, and similar expressions are
intended to identify forward-looking statements. These statements
are not guarantees of future performance and involve certain risks,
uncertainties, and assumptions (“Risk Factors”) that are difficult
to predict with regard to timing, extent, likelihood, and degree of
occurrence. Risk Factors include, among others: changes in general
economic conditions, employment rates, business conditions,
interest rates, tax policies, inflationary pressures and other
factors affecting consumer spending in the markets and regions in
which the Company’s products are sold; the inability for any reason
to effectively compete in global footwear, apparel and
consumer-direct markets; the inability to maintain positive brand
images and anticipate, understand and respond to changing footwear
and apparel trends and consumer preferences; the inability to
effectively manage inventory levels; increases or changes in
duties, tariffs, quotas or applicable assessments in countries of
import and export; foreign currency exchange rate fluctuations;
currency restrictions; supply chain or other capacity constraints,
production disruptions, quality issues, price increases or other
risks associated with foreign sourcing; the cost and availability
of raw materials, inventories, services and labor for contract
manufacturers; the effects of COVID-19 and other health crises, on
the Company’s business, operations, financial results and
liquidity, including the duration and magnitude of such effects,
and numerous factors that the Company cannot accurately predict,
including: the duration and scope of the health crisis, the
negative impact on global and regional markets, unemployment rates,
consumer confidence and discretionary spending, governmental
action, and the effects of the health crisis on the Company’s
supply chain and customers; labor disruptions; changes in
relationships with, including the loss of, significant wholesale
customers; risks related to the significant investment in, and
performance of, the Company’s consumer-direct operations; risks
related to expansion into new markets and complementary product
categories; the impact of seasonality and unpredictable weather
conditions; increases in the Company’s effective tax rates; failure
of licensees or distributors to meet planned annual sales goals or
to make timely payments to the Company; the risks of doing business
in developing countries, and politically or economically volatile
areas; the ability to secure and protect owned intellectual
property or use licensed intellectual property; the impact of
regulation, regulatory and legal proceedings and legal compliance
risks, including compliance with federal, state and local laws and
regulations relating to the protection of the environment,
environmental remediation and other related costs, and litigation
or other legal proceedings relating to the protection of the
environment or environmental effects on human health; the potential
breach of the Company’s databases or other systems, or those of its
vendors, which contain certain personal information, payment card
data or proprietary information, due to cyberattack or other
similar events; strategic actions, including new initiatives and
ventures, acquisitions and dispositions, and the Company’s success
in integrating acquired businesses, and implementing new
initiatives and ventures; the risk of impairment to goodwill and
other intangibles; changes in future pension funding requirements
and pension expenses; and additional factors discussed in the
Company’s reports filed with the Securities and Exchange Commission
and exhibits thereto. The foregoing Risk Factors, as well as other
existing Risk Factors and new Risk Factors that emerge from time to
time, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these or other
risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual results.
Furthermore, the Company undertakes no obligation to update, amend,
or clarify forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20231218089599/en/
Dave Latchana, (616) 863-4226
Wolverine World Wide (NYSE:WWW)
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