Wolverine World Wide has the shoes to quiet your barking dogs. The company makes Hush Puppies casual shoes and slippers, as well as boots, sandals, and related apparel and accessories. Its boot lines include Merrell (outdoor), Bates (military), HyTest, and Wolverine (industrial); footwear is made under the Cushe brand and private labels. Wolverine also boasts several licenses from Caterpillar ("CAT") and Harley-Davidson, to make branded footwear. It sells worldwide through department and specialty stores, independent distributors, Internet retailers, and about 360 company-owned retail stores in the US and Canada. Wolverine also maintains more than 60 consumer-direct Internet sites.
Wolverine's footwear brands are sold in about 200 countries and territories in the US and Canada as well as Latin America, Europe, the Middle East and Africa, and the Asia-Pacific region. The US accounted for two-thirds 72% of the company's fiscal 2016 (January year end) sales, followed by Europe, Middle East and Africa (13%), and Canada (5%) while the remainder came from other countries.
The company’s manufacturing operations are conducted in Michigan and it maintains distribution operations in Louisville, Kentucky; Howard City, Michigan; Cedar Springs, Michigan; Rockford, Michigan; Ontario, Canada; and Brookville, Ohio.
The company operated 360 retail stores in the US and Canada and 61 consumer-direct websites in fiscal 2016.
Wolverine designs, manufactures, sources, markets, licenses, and distributes branded footwear, apparel, and accessories. Prior to fiscal 2016, the company operated in three reportable segments: Lifestyle Group, largest segment (37% of sales), Performance Group (37%), and Heritage Group (22%).
The company realigned its segments into four in fiscal 2016: Wolverine Outdoor & Lifestyle Group (Merrell, Cat, Hush Puppies, Sebago brands and Chaco and Cushe footwear); Wolverine Boston Group (Sperry, Saucony and Keds brands and apparel); Wolverine Heritage Group (Wolverine, Bates uniform footwear, Harley-Davidson and HyTest footwear) and Wolverine Multi-Brand Group (Stride Rite brand and multi-brand consumer-direct businesses).
Sales and Marketing
Wolverine markets directly through retail stores and also through a network of third-party distributors, sales representatives, licensees and joint ventures. Its brand-specific marketing plans vary and may include print and radio advertising, search engine optimization, social networking sites, event sponsorships, in-store point-of-purchase displays, promotional materials and sales and technical assistance. The company directly sells its products to a range of customers, including department stores, national chains, catalog retailers, specialty retailers, mass merchants and internet retailers, governments and municipalities. Wolverine also uses a network of independent Shoemobile distribution outlets to distribute some work and occupational footwear brands at industrial facilities.
The company's net revenues decreased by 3% in fiscal 2016 due to lower sales from the Lifestyle Group and the Heritage Group. The decline in Lifestyle Group revenues was due to a drop in Stride Rite sales resulting from the closure of retail stores, while the Hush Puppies' decline was due to strategic reductions in the US department store channel.
Heritage Group’s sales dip was due to the decline in revenues from Cat and Sebago as a result of a strengthened US dollar, while the Wolverine brand declined due primarily to unseasonably warm winter weather and higher inventory levels at key retail partners.
Performance Group revenues were flat for the year.
In 2016 Wolverine's net income decreased by 10% due to lower net revenues and an increase in restructuring and impairment costs, related to the company’s decision to wind-down operations of its Cushe brand and indefinite-lived intangibles of its Stride Rite brand.
The company’s operating cash flow was $215.5 million in fiscal 2016.
Wolverine focuses on marketing campaigns and strategies in order to increase awareness of, and affinity for, the company’s brands. The strategy will enhance the positioning of its brands, extend its brands into complementary product categories, expand geographically and expand its consumer-direct operations.
In 2015 the company invested in digital marketing and omni-channel initiatives. Its ecommerce nearly accounted for 20% growth in revenues, primarily in mobile. The company sold around 42 million units outside North America, contributing to an expanded geographic reach for brands. In 2016 it continued to strengthen its brands in digital, ecommerce, and mobile.
The company seeks to position its three largest brands, Merrell, Sperry and Saucony, for future global expansion and growth in 2016. In 2015, Saucony launched the new EVERUN technology. Sperry focused on pushing beyond boat shoes and developing as a lifestyle brand with boots and sneakers, as well as introducing the new Paul Sperry collection. The Merrell brand planned to launch hiking and trail running products in conjunction with go-to-market executions with key global retailers.
Wolverine initiated a restructuring plan in 2014, for realignment of the company’s consumer-direct operations. As a part of the plan, the company closed 136 retail stores in connection (which included 58 retail stores in fiscal 2014, 46 retail stores in fiscal 2015, and the remainder in 2016).