Wolverine’s Outdoor Group Ramps Up

Wolverine World Wide’s Outdoor Group has been the company’s star performer for many years — but executives said there’s plenty more potential for growth.

Jim Zwiers, who assumed leadership of the group that includes Merrell, Patagonia Footwear and Chaco in March 2009, has spent the past year restructuring the division and installing a new executive framework.

Among his key moves: appointing Bill Dodge, who was the former Patagonia Footwear GM, as the VP overseeing product development for the entire group, and bringing in Columbia Sportswear vet Mark Sandquist as president of global apparel.

“The changes that we’ve made organizationally were really to help align with [our] three big priorities: First is product innovation, second is the consumer focus and the third area is growth,” Zwiers said.

At the top of the list is the group’s flagship Merrell brand, which the company believes can hit $1 billion in the next few years.

“Even though it’s a significant, $450 million footwear brand globally, Merrell in the U.S. still has a very low brand awareness,” said Wolverine CEO Blake Krueger. “On the other hand, [consumers] always rank it No. 1 or No. 2 among brands they intend to repurchase. And that is actually a very good combination.”

To raise awareness, Zwiers said the company has tripled its customer-support staff over the past 18 months and encouraged a more active dialogue between consumers and the brand. And it’s putting its money where its mouth is: After years of marketing Merrell primarily through its retailer partners, the company is now going directly to the end user.

“We are realigning dollars toward consumer marketing,” Zwiers said. “That will come with a new ad campaign that will launch with our spring ’11 products, and it’s also going to come through making sure that we have the new media within our grasp.”

The goal is to reinforce the brand’s performance positioning in the core outdoor space, and also to get it in front of a new audience.

 Zwiers is targeting “consumers who fall within the Merrell lifestyle who have not discovered the brand yet — healthy, active, outdoor-type people who are into fitness, but also into a bit of adventure, family activities and fun.”

The newest label in the group — Chaco, acquired in January 2009 — is also a big opportunity, Zwiers said. “We’ve got more than double-digit growth plans for the brand going forward, and we believe it can more than triple over the foreseeable future.”

Driving growth for it will be an expansion of the fall footwear that began delivering last month, and the relaunched kids’ program for spring ’11. Wolverine also has high hopes for Chaco’s potential overseas, where it is in its infancy.

Industry observers said the new initiatives across the division — especially the beefed-up marketing plan — will serve the Outdoor Group well.

“We expect them to see some shelf space increase, and see increased sell-throughs,” said Jonathon Grassi,- an analyst with Longbow Research.

Lauren Barra, footwear buyer for Backcountry.com, carries all three of the Outdoor Group’s brands — and Merrell and Chaco, especially, she said, are some of the site’s bestsellers.

And while the company’s no-discounting policy has cost her some sales, the strong margins have made up for it, she said.

Moving forward, Barra predicted there is more growth potential, especially at Merrell, which is introducing more tech-heavy styles and the new Barefoot Collection, being made with Vibram.

“It’s a cool idea: Vibram [Five Fingers] is such a huge program, and this is a nice spin on that,” Barra said. “There’s a lot of buzz, and it’s a really cool addition.”

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