Will Wolverine Worldwide Do Better After Selling Hush Puppies?

Wolverine Worldwide, the Michigan-based footwear manufacturer, is transforming its brand portfolio with two additional divestitures, according to Apparel Resources.

The company is known for its contemporary aesthetics, broad array of products, and unique technologies that emphasize both relaxation and efficiency. It upholds a commitment to superior material quality and artisanship in the crafting of its shoes, leveraging both internal resources and third-party partners.

Currently, Wolverine Worldwide runs the following brands:

• Bates
• Cat Footwear
• Chaco
• Harley-Davidson Footwear
• Hush Puppies
• HYTEST
• Merrell
• Saucony
• Sperry
• Stride Rite
• Sweaty Betty
• Wolverine

Recently, Wolverine finalized a deal to transfer the rights to the Hush Puppies brand — including trademarks, patents, copyrights, and online domains — in China, Hong Kong, and Macau to Beijing Jiaman Dress Co., Ltd., the existing sublicensee in the region. A joint collaboration agreement valued at $58.8 million has been established between the two entities, emphasizing a shared responsibility and commitment to nurturing the Hush Puppies presence in these territories.

For the time being, Hush Puppies will continue to be owned and operated by Wolverine in the rest of the world. This means that the company can ease its role in Asia and collect royalties instead of spending more money in that market.

Wolverine Worldwide has also officially sold its American Wolverine Leathers division “to its long-time customer, New Balance, for approximately $6 million in total proceeds. The company assigned Wolverine’s U.S. tannery contracts to New Balance, and continues to explore alternatives for the non-U.S. Wolverine Leathers business.”

Seeking Alpha, a community of investors and analysts, released data pointing out that Wolverine Worldwide’s “share price has significantly declined in the last 18 months, losing 56% of its value. The wider market has struggled during this time but not remotely to the same degree.”

Overall, during the last five years, the company has seen inconsistent ups and downs, varying sporadically year over year.

The data shows evidence that Wolverine has constantly struggled to maintain constant growth, currently facing a Y/Y decline of 2.5% in the first quarter of 2023. Only two brands, Saucony and Merrell, show potential but remain inconsistent. Meanwhile, most competitors have shown growth and innovation in many areas. Many, like Crocs with its new cowboy boots, have shown new products to excite their customers.

Seeking Alpha believes that Wolverine Worldwide's current offerings aren't enough in today's market, stating that “the industry has become significantly more competitive, primarily due to two main factors. Firstly, the rise of e-commerce has given consumers significantly more choices, and through a convenient channel, allowing for products and prices to be compared easily. Secondly, with supply chains increasingly centered in the far east, we have seen the rise of low-cost options for consumers, diluting [Wolverine Worldwide’s] value proposition.”

Critics are losing hope in the company, so it remains to be seen if these recent divestitures are a sign of more positive change to come. Wolverine Worldwide might need to find new ways to disrupt the industry and reinvigorate its brands and products.