Wolverine Worldwide announced Wednesday an update to their strategic initiatives with a Wolverine Way Forward plan. The Way Forward plan solidifies the footwear conglomerate’s desire to put focus on consumers, product innovation and speed.
“To help drive this, we will open a new, 14,000-square-foot consumer and innovation hub next month, co-locating consumer insights, strategy, advanced concepts, and product development teams in a modern, collaborative environment,” Wolverine Worldwide Chairman, CEO and President Blake Krueger said. “At the same time, our work to position the Company for improved profitability through our operational excellence initiatives continues, and we remain on track to deliver against our 2018 adjusted operating margin goal. We believe we have the right strategies in place, and I am enthused by the opportunity ahead of us.”
Highlights from Wolverine’s plan include:
- Wolverine Worldwide is adjusting to new consumer behavior by investing in e-commerce and shutting down slow brick-and-mortar locations. Based on timing, store closures are expected to reduce 2017 revenue by $125 million to $175 million. Once completed, the company’s store rationalization efforts are expected to improve operating profit by $20 million on an annualized basis.
- Wolverine Worldwide plans to open a new 14,000-square-foot consumer and innovation hub at the beginning of the new year. The hub aims to facilitate lower product costs, while the supply chain team enables faster production lead times for core product initiatives. In addition, Wolverine plans to open its first distribution center on the West Coast by mid-2017, which is expected to reduce time to market and provide logistics cost savings in 2018.
- The company continues to streamline the organization, including the restructuring of the direct-to-consumer, apparel and accessories, EMEA, and Canadian operations. Additional steps intended to drive greater efficiency, speed and agility are ongoing.
“We have made significant progress against our plan to position the organization for improved growth and profitability,” said Wolverine Worldwide Senior Vice President and CFO Mike Stornant. “Our continued rationalization of stores and strategic portfolio review are important steps down this path. Looking ahead, we believe the strong focus of our team will allow us to deliver at least 150 basis points of adjusted operating margin expansion in 2017. While the macro environment remains challenging, we are focused on controlling what we can control, encouraged by the progress we’ve made, and excited about the initiatives we have underway.”