McCarthy Out, Gabel In At Merrell: Analysts Weigh In

Wolverine World Wide Inc. has confirmed that Gene McCarthy, Merrell brand president since August 2013, has left the company and has been replaced by Jim Gabel, president of Wolverine’s Performance Group. McCarthy’s departure was effective Monday, May 4.

“Since [Gabel’s] start with Wolverine, he has spent the vast majority of his time working with the Merrell team to develop a strategy to capitalize on the many global opportunities that exist for Merrell,” Christopher Hufnagel, head of strategy, investor relations and communications at Wolverine, told FN. “We believe that [Gabel’s] direct day-to-day leadership of the brand is the fastest way to achieve those objectives.”

McCarthy had come to Merrell with more than 30 years of experience in the footwear and apparel industries, including leadership roles as SVP of footwear for Under Armour Inc., co-president for Timberland and SVP of global footwear for Reebok.

Industry insiders have had mixed reactions to the departure—some citing potential backlash from the seemingly abrupt change while others say it’s a step in the right direction.

“People can be resistant to change but I think Gabel has a good perception of where Merrell is going and he’s the right man for the job,” said Danielle McCoy, Wunderlich Securities Inc. analyst.

Sterne Agee analyst Sam Poser described McCarthy’s departure as “a bit surprising” noting that the brand’s spring ’16 offerings were to be his first full line.

“The changes at Merrell are a bit disconcerting,” said Poser in a May 6 note. “We expect to see how much progress has been made at Merrell in early June at the New York Shoe Show.”

Gabel joined Wolverine from Adidas Group where he was president of Adidas’ Canadian operations. He has also held leadership roles at Champion and Mizuno.

“[Gabel’s] passion and expertise is product and marketing, and [he] has many years of experience leading large, global lifestyle brands,” said Hufnagel, adding that the company will provide more details during its Q2 earnings call slated for mid-July.

“Management has been really focused on proving Wall Street wrong and really turning things around at Merrell; every move they make at this point is for the best,” said McCoy. “I think there’s a lot of opportunity at Merrell—for international expansion among other things—and I don’t view the [executive] change as negative.”

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