Keds might be a beloved brand, but that wasn’t enough reason for Wolverine Worldwide to keep it in its growing portfolio.
“We can’t have any sacred cows, the world is different now,” said Wolverine Worldwide’s CEO Brendan Hoffman, in a fireside chat at the 25th annual ICR conference. He explained the company’s decision last month to sell the well-known, more than 100-year old brand that Wolverine acquired in 2012. “We can’t afford to invest in all these businesses.”
Despite his current resolve, the footwear executive, who took the helm of Wolverine at the start of 2022, said he never really planned to unload any brand from the footwear conglomerate, which also owns Saucony, Merrell and Sperry, among other brands.
“The thought of divesting a brand was kind of off-limits,” Hoffman said. But as he settled into his role, it became clear that some brands needed more attention than others — and not all had the potential to be winners.
As he set out to outline an entirely new — and more agile — brand group structure, Hoffman took note of which brands most effectively played into the company’s overall strategy. Keds, which Hoffman said only did under $100 million in sales, would be difficult to effectively double or meaningfully grow. And to Hoffman and his senior leadership team, the company’s efforts would be better spent in higher-growth brands like Saucony or Sweaty Betty, where sales could be grown with “far less of a lift.”
He added that while the mergers and acquisitions market has been relatively quiet, Wolverine had “a lot of inbound interest” for Keds which made the decision to sell easier.
In addition to Keds, Wolverine also said it would divest its vertically integrated leather supply business, Wolverine Leathers, a move Hoffman said was driven by a different motivation.
“I didn’t really sign up to run a tannery business,” Hoffman said. “So I think that was more of an obvious one to try and divest.”
Moving forward, Wolverine will focus on its remaining brands that now live in a reorganized portfolio of three reportable segments — active, which consists of Merrell footwear and apparel, Saucony footwear and apparel, Sweaty Betty activewear and Chaco footwear; the work group, which comprises Wolverine footwear and apparel, Cat footwear, Bates uniform footwear, Harley-Davidson footwear and HyTest safety footwear; and the lifestyle group, which includes Sperry footwear and Hush Puppies footwear and apparel.
The goal is to be set up for agility while avoiding operating redundancies across brands.
“I think the company wore it as a badge of honor how complex we made the business,” Hoffman said. “And I’m just not wired that way. For me, it’s always about finding simplicity.”