Branding Key To Wolverine Business

May 14, 2004
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ROCKFORD — Consumers in more than 150 countries purchased some 41 million pairs of Wolverine World Wide footwear last year, nudging the company a step closer to its goal of becoming the premier company in the non-athletic segment of the global footwear market. 

Wolverine divides the footwear market into two segments — the athletic segment and the non-athletic segment.

The athletic segment is dominated by some very large players, among which Nike is the stand-out, said Wolverine President and CEO Timothy O’Donovan.

“In the non-athletic segment there are many, many brands that are highly fragmented and that’s an opportunity for us to get a bigger share of the high-priced end of the market,” he said at a recent World Affairs Council of West Michigan event at Wolverine headquarters. 

Wolverine believes one of the keys to doing that is a “family of brands approach,” with brands targeted to specific niches in the marketplace, he said.

“Brands are what drives our business.”

Wolverine’s portfolio of brands includes Merrell, Hush Puppies, Bates, Wolverine, Sebago and HYTEST.

The firm also markets footwear under the CAT, Harley-Davidson and Stanley licensed brands. The company aggressively markets all its products.

“We have the largest share of voice in terms of media,” O’Donovan said. “We make about 400 million consumer impressions a year using print, radio and television, so we’re constantly out in front of our core customer.”

Product is crucial in the footwear business, he said, because it turns over very, very quickly as consumers adapt to new fashion trends.

At one time, all Wolverine’s footwear technology and design work were done at the company’s Rockford headquarters. Recognizing that not every successful designer would want to live in Rockford, O’Donovan said, the company opened a design center in SoHo, N.Y.

Wolverine now has a design center in London, and some design work for Merrell is done in Vermont.

The company supports that design work with sourcing and engineering offices at Wolverine factories in Michigan, the Dominican Republic, China, Taiwan, India and Brazil.

Wolverine is clearly looking to expand its global reach.

One of the “fascinating” things about the company, in O’Donovan’s opinion, is that within a year of the 1959 launch of Hush Puppies in the United States, the company began expanding the Hush Puppies business internationally.  

“It wasn’t what most footwear companies were thinking about at the time,” he said.

“So because of that early start internationally, we were able to — over the years — form very strong partnerships with licensees and distributors around the world. So today our brands are found in all these countries.”

The challenge with an older brand like Hush Puppies, he said, is to keep its image fresh and appealing to new generations, creating an imagery around the brand that people feel is relevant to the times. 

Today about half the company’s brand name shoes are sold in the United States. But Europe, in particular, is a growth area, so the company is establishing a stronger presence in Europe and securing new sources for growth, O’Donovan said.

Since buying Merrell brand in 1997, the company has worked to make it the leading global brand in “performance outdoor and active lifestyle footwear.”

Merrell has grown tenfold and is a major revenue driver. Merrell’s European revenue grew by more than 60 percent last year, O’Donovan noted.

Wolverine began building the Harley-Davidson footwear brand in 1998 under license from the Harley-Davidson Co. The Harley brand is geared to capture “the spirit of independence and adventure” of the Harley-Davidson motorcycle legend, with “bold, edgy and sexy” footwear. Although women represent only 15 percent of motorcycle riders, they account for about 55 percent of Harley footwear sales.

In 2001, the company acquired its European Caterpillar and Merrell businesses from the former distributor, establishing ownership of Wolverine’s first wholesale business on the continent.

“We now have some critical mass over there which is allowing us to expand more rapidly in that market.” 

Last year Wolverine acquired Sebago, a brand O’Donovan said the company had admired for quite some time. Sebago is a $30 million business with about half of its sales in the United States.

Touted as “comfortable, casual footwear for the family,” the Sebago brand includes loafers and Docksides boat shoes, as well as other leisure and dress shoes and sandals. According to O’Donovan, Sebago is a “premium” boat shoe that’s marketed worldwide and is quite respected in the rugged casual footwear niche. 

As he explained, Wolverine felt the acquisition was an opportunity to take the classic Americana image of Sebago, invest in product development and add some energy and vibrancy to the brand.

“We wanted to take that boat shoe category and add the ultra marine product for the very top-end competitive sailors and create image for the brand that really hinges on status.

“The reason for it is to transform Sebago to be the global reference for performance marine, American-inspired footwear.”

State-of-the-art systems are critical to competing in the footwear industry, he said, adding that Wolverine has invested $43 million in systems since 1998.

“Today, a retail customer can send us an order over the Internet in the morning and … that order will be on its way back to that retailer the same day.”

According to O’Donovan, that’s a “terrific” competitive advantage, considering all the shoe colors, sizes and widths offered.

“Retailers are always concerned about their ability to meet the needs of their customers. If we can give them that kind of service level, that makes their life a lot easier.”

One recent initiative has been to showcase directly to consumers under the Track ’N Trail banner. Track ’N Trail has an online store and five brick and mortar locations, two in the Grand Rapids. The company plans to have five more stores in place by year’s end. 

“We believe this may be a concept that, after we prove the economics of it, will give us a vehicle to more aggressively deal directly with consumers through these kinds of retail stores that we would operate in an environment where we can control all the elements.”

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