Wolverine's Merrell Brand Growing In Europe

June 25, 2007
| By Pete Daly |
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ROCKFORD — Wolverine World Wide Inc. is counting on Merrell, its most vigorous brand, to continue its long streak of double-digit growth with a new president, new products, new Merrell brand retail stores and a firm focus on the growth potential of its European business.

Scott B. Sible is the new president of Merrell, but he's not new to Wolverine or the brand. Sible, 47, was vice president and general manager of Merrell, and has been on the Merrell team since joining Wolverine World Wide in 1999, only two years after Wolverine acquired Merrell.

Sible will continue to report to Jacques Lavertue, president of the Outdoor Group of Wolverine World Wide. Sibel's expanded role will include greater responsibility for the leadership, strategic direction and general management of Merrell Footwear and Merrell Apparel divisions on a global basis.

"Scott's proven abilities and dedication to Merrell since joining the team in 1999 make him the leader of choice for the brand and will provide the necessary focus for continued growth," said Lavertue.

"I look forward to continuing the growth path of the Merrell brand and helping the organization realize its full potential on a global basis. The extent of Merrell's consumer recognition and global reach is still only in its initial stages, and with continued consumer acceptance as a lifestyle brand of choice, Merrell's best years lie ahead," said Sible.

Sible, a native of the Houghton Lake area, has a Bachelor of Science degree in business from Northern Michigan University. Prior to joining Wolverine, he was with Genesco, a major footwear company in Nashville, Tenn.

Sible was in the right place at the right time when he joined Wolverine in 1999. The Merrell brand was about to be rejuvenated.

The brand had started in Vernal, Utah, in 1981, when Randy Merrell, a custom cowboy- boot maker, had an idea. He had been seeing a lot of the clunky, wide European hiking boots and decided to make a hiking boot on a narrower cowboy boot last — a better fit for the American foot, he figured. And so it was. His boots were expensive — $500 per pair — but very popular. Soon there was a customer waiting list six months long — even before Backpacker magazine published an article stating that Merrell's hiking boot was the most comfortable and functional in North America. After the article, the company really took off, and relocated to Vermont.

In 1996, Merrell made a major investment in its original design for an outdoor performance outsole. The company then applied the new outsole to an entirely new shoe, the Jungle Runner. While the outsole was "a breakthrough," according to Sible, the Jungle Runner did not do well in the marketplace.

Then Wolverine acquired the Merrell company in 1997, when it was "struggling from a resources standpoint," said Sible.

The first order of business for Wolverine World Wide was to attempt to recoup the Merrell investment in the new outsole. Merrell had to come up with a new shoe for the outsole that would sell at least 50,000 pairs. Wolverine had pigskin available for the uppers, so pigskin was used — and in 1999, Merrell's Jungle Moc was born. It was marketed as an "aftersport" shoe — low, comfortable footwear for relaxing after a day of wilderness backpacking, mountain climbing or skiing — and it had a high-performance outdoor sole that outdoor enthusiasts could relate to.

"In 2000, it was the hottest shoe in the business," said Sible.

Merrell was on a roll, and it's still rolling.

In April, Wolverine reported its 19th consecutive quarter of record revenue. Revenue for the first quarter of 2007 was $281.1 million, up almost 7 percent over the same quarter last year. Wolverine's Outdoor Footwear Group is the most profitable sector of the company, and Merrell is the leader in that group, providing half of the increase in sales. Merrell also finished the quarter with an increase in its backlog of more than 20 percent.

Europe is the reason for keeping that sales growth going. Merrell sales are "growing there faster than anywhere else in the world, but we still have a long way to go," said Sible. He mentioned the U.K. as a particularly good prospect for increased Merrell sales.

Merrell footwear, almost all of which is produced in China and Vietnam, is sold in 104 countries. About half of Merrell sales are in the U.S. Competitors in Europe include Salomon, The North Face and Columbia Sportswear.

Mitch J. Kummetz, a footwear industry analyst with Robert W. Baird, said there are three reasons why the Merrell brand is so strong in Europe.

"A lot of U.S. brands are strong in Europe. That's not unusual," said Kummetz.

A second reason is that "the company does a very good job in design." If it's an appealing design and it's an American product, the Europeans are interested.

The third reason is that Merrell is "still growing from a smaller base there than in the U.S. In the past, they haven't focused as much on selling the entire product line in Europe," he said, adding that in the last year or so, the company has been "doing a better job selling a broader assortment of product in the market."

Kummetz said the Merrell brand becomes very popular wherever it is sold. He called the recent move into apparel a "head-to-toe lifestyle opportunity for the brand."

This fall, Merrell is launching a line of outdoor performance apparel, including a full range of jackets. It will also introducing backpacks and luggage products, and has begun work on adding hosiery.

Wolverine tried to market Caterpillar brand apparel in Europe previously, with production of those products outsourced. This time it will be different: Merrell apparel products will be produced in Hong Kong at a facility owned by Wolverine, according to Sible.

Another major Wolverine initiative is the establishment of Merrell brand retail stores in the U.S. and Europe. Right now a number of stores are in the testing mode, but "we hope to have close to 50 by the end of the year," said Sible.

In August, Merrell stores will open in Grenoble, France, and in Nashville, Tenn., said Sible. Therein lies a clue to the success of the Merrell brand. Both cities are in mountainous regions, and, after all, Merrell footwear is a recognized world leader in the outdoor performance category. Merrell sales in the U.S. have always been strongest on the East Coast and the West Coast, because that's where the mountains are.

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