The president and CEO of Wolverine World Wide Inc. said he’s had a front-row seat to a major success story since helping to acquire the brand in 1997, when sales totaled $23 million.
“I remember our first [Merrell brand] team meeting in a conference room downstairs,” Krueger said. “Today, it takes multiple rooms and an auditorium [to hold a meeting]. I couldn’t be prouder of the team and the brand, our wonderful retail partners and distributors around the world, and how everybody has contributed to [our] success.”
Further innovations are to come, Krueger said, such as its Barefoot Collection of running product. Already, the shoes have found an enthusiastic fan base.
“The success and early sell-in has been beyond our expectations,” Krueger said. “We think Merrell is going to be the go-to brand for this essentially new category of footwear.”
The brand also is branching out into other categories and finding similar success.
“We continue to see incredibly strong growth from footwear, but we also see growth in apparel, socks, packs and bags,” Krueger said. “They’re all performing very well.”
Here, Krueger reflects on his first encounter with the brand, the process that led to the iconic Jungle Moc and the path to hitting $1 billion in sales.
FN: When did you first become aware of Merrell?
BK: Probably in the mid-1990s. I was involved in the acquisition of Merrell at the time. We loved the management team and thought that same management team would have an opportunity to blossom within our corporate framework.
FN: What was it about the brand that showed so much promise?
BK: Like all of our brands, it was authentic. As small as it was at the time, Merrell stood for something. It had a small but very loyal consumer base. It was a great-fitting, primarily hiking boot product, and primarily men’s. But it was authentic and clean with no baggage.
FN: Did you ever envision the brand could have such a large presence in the industry?
BK: As far as predicting the unbelievable growth of Merrell over the last 10 or 12 years, it’s hard for anybody to predict growth of that magnitude. I always [jokingly] tell people it was my idea to buy Merrell and I designed the Jungle Moc. Of course, nobody believes me, and they shouldn’t believe me.
FN: How did the Jungle Moc come about?
BK: We had a shoe at the time called the Jungle Runner. It was a trail-running shoe and, frankly, it didn’t do that well. So we had some unamortized outsole molds. The team, led by Clark Matis, came up with the idea to take this very aggressive trail-running outsole mold and couple that with a more casual upper that was made out of our Wolverine performance pigskin product. It was a big success. I would like to tell you it was a carefully thought-out, three-year R&D process, but the fun thing about our industry and our business is that sometimes a bit of luck goes a long way. Clearly, there was also some thought and talent behind it, but that’s the true story.
FN: What is it about Merrell that has made it so successful?
BK: In my mind, Merrell’s success is really due to three primary factors: The first is a fanatical focus on product. The product is not just in one category. Yes, everybody would love to have the success story of a Jungle Moc, but it is much broader than that. Merrell has startled the marketplace with leapfrog product every season. The second thing that led to huge sales growth was the expansion of the brand into new product categories — women’s sandals, multisport, more casual shoes. They were always able to expand the brand with an appropriate story and rationale that made sense to their very loyal consumer. The third thing is that they had a well-defined, full-price distribution. They believed their product offered tremendous value to the consumer at the full retail price. The brand never became a discounted brand. This, of course, turned out to be very good for retailers.
FN: Has the economy affected Merrell?
BK: It really has had almost no impact on Merrell’s momentum. We made a decision as a company at the beginning of the downturn — in maybe the fourth quarter of 2008 — that we were going to do everything we could as a company to protect the brand equity and full-price heritage of our brands during the downturn. That may have cost us some topline sales in 2009, but it also didn’t take away or destroy any of the brand equity that had been built up in Merrell and our other brands over many, many decades. We thought that would position us for accelerated growth coming out of what people are terming “The Great Recession,” and, in fact, that has turned out to be the case.
FN: What does the 30th anniversary mean to you?
BK: Thirty years for any brand in our industry is clearly a milestone and something we’re proud of. We’re also proud that the growth potential for Merrell is just starting. Merrell will probably be the first $1 billion brand in our portfolio.