Wolverine Worldwide revealed plans to close 140 stores as part of a strategic realignment plan designed to expedite growth and improve overall profitability.
The company, makers of Merrell, Sperry Top-Sider, Stride Rite, Hush Puppies, Keds and more, will close 60 stores by the end of its fiscal year. The remaining stores–mostly Stride Rite branded stores–will be closed by the end of 2015. In total, the company operates 463 retail stores in the U.S., Canada and the U.K.
Wolverine revealed the closures during a conference call Tuesday detailing the company’s second quarter 2014 financial results. Quarterly revenues totaled $613.5 million, a 4.4% increase from the previous year, and ahead of analysts’ estimates of $608.8 million. In particular, its Saucony, Keds, Caterpillar Footwear, Chaco and Wolverine brands posted strong year-over-year results.
The realignment plan is expected to result in annual pretax benefits of approximately $11 million, which will primarily be used to build Wolverine’s omnichannel capabilities and grow its wholesale operations. Wolverine’s chairman and CEO Blake W. Krueger said the strategic realignment plan is an important step in the evolution of the company’s consumer-direct operations to meet the changing behavior of today’s consumer. “We are confident that these actions will set a new foundation for our consumer-direct business, help position our company for future growth and increase shareholder value,” he said.
Wolverine Worldwide also decided to end its licensing agreement with outdoor apparel and equipment brand Patagonia. The company didn’t expect dropping the brand to impact fiscal 2014 results, and said it would have a minimal impact on 2015 results.
Don Grimes, Wolverine’s senior vice president and chief financial officer noted, “Although a wonderful brand, Patagonia currently generates a relatively small amount of revenue and profit for Wolverine.” The Fall ’14 collection will be Wolverine’s final season producing Patagonia footwear.