Wolverine Worldwide has committed up to $45 million to speeding up its supply chain and addressing groundwater issues related to its former tannery operations, the U.S. apparel and footwear firm said last week as it outlined its guidance for 2018.
The pledge as the company forecast revenue in the range of $2.24 billion to $2.32 billion. For fiscal 2017, the company has booked preliminary revenues of $2.35 billion, at the top end of its outlook.
Over the last year, Wolverine said it has been working through a legacy issue related to its former tannery operation and related disposal sites. The company said it is cooperating with local, state and federal authorities to evaluate these sites for the presence and impact of per‐ and polyflouroalkyl substances (PFOA and PFOS). PFOA and PFOS were used for many decades in commercial products like firefighting foams and metal plating, and in common consumer items like food wrappers, microwave popcorn bags, pizza boxes, Teflon, carpets and 3M’s Scotchgard.
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Due to their widespread use over such a long period of time, PFOA and PFOS can be found virtually everywhere and in everyone to some degree.
“Like thousands of other companies and millions of consumers, the company purchased Scotchgard from 3M and relied on 3M’s assurances to Wolverine, the Environmental Protection Agency, Food & Drug Administration, scientific bodies and the public that there were no adverse effects on human health from Scotchgard containing PFOA and PFOS, a position 3M maintains today,” the company said.
Wolverine said it has taken “proactive and immediate steps to provide drinking water solutions for impacted residents in the community while more testing and evaluation is completed.” The company used the chemicals at its former tannery in Rockford, Michigan, to waterproof leather for shoes. Over the last year, Wolverine has been working through the legacy issue related to the tannery and related disposal sites.
Based on the actions taken and the ongoing testing and monitoring expected to take place to comply with recent regulatory actions, the company said it expects to accrue environmental remediation costs of $30 million to $35 million in fiscal 2017, of which $13 million to $16 million is expected to be paid in fiscal 2018, with the remainder to be paid in 2019 and beyond.
In addition, the company expects to incur $8 million to $12 million in fiscal 2018 for legal, consulting and other costs related to this legacy environmental issue.