Wolverine takes a step forward with Collective purchase

May 21, 2012
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On Thursday, Wolverine Worldwide chairman/CEO Blake Krueger will be one of the presenters at the Citi 2012 Global Consumer Conference in New York.

No surprise, because in the world of consumer retail, Wolverine just keeps on getting bigger. A few weeks ago, Wolverine and a pair of private-equity firms in San Francisco joined together to buy out Collective Brands Inc. for roughly $1.32 billion. When factoring in the buyers’ assumption of Collective Brands debt, the deal is worth about $2 billion.

Later this year, when the deal closes, Collective will be split up, with Wolverine getting the wholesale and retail operations for shoe shops Sperry Top-Sider, Saucony, Stride Rite and Keds.

Krueger said the company is “thrilled to add these four iconic brands to our proven global platform.”

The stock market was thrilled, too. The day before word came of the Collective Brands deal, Wolverine stock closed at $41.95. Later that week, the stock was at $44.06, a record high. It’s subsided a little since then, but the big old company in little old Rockford is definitely on a roll.

Krueger’s presentation at the Global Consumer Conference will include information on Wolverine's operations and business outlook, and is scheduled to begin at 9:55 a.m. Eastern Time on May 24. Catch it via live webcast at www.wolverineworldwide.com

Garden growing

The Michigan Lean Startup Conference last week at Grand Valley State University’s Eberhard Center brought the entrepreneurial and money sides together in an effort to find ways to build a better mousetrap.

Rick DeVos, who heads up the Start Garden fund targeted at tech entrepreneurs, hosted the event and got a look at the gap between creative ideas and viable marketplace products and services.

As any good coach will tell you, it’s all about the fundamentals.

“Start Garden is designed to remove barriers to ideas becoming projects, then becoming startups. The Michigan Lean Startup Conference helps entrepreneurs launch new offerings as quickly as possible, and adapt them to the marketplace,” DeVos said. “In just the first few weeks of Start Garden, we’ve seen evidence of how much we need to spread fundamentals about entrepreneurship. For instance, many submissions don’t consider that investors want to know how to get a return on investment, and that influences what we choose. Gatherings like this conference are essential to build knowledge from people who’ve been in the trenches.”

DeVos said the wait-and-see approach, which most entrepreneurs use after starting a business, isn’t working.

“Launching the most basic version of your idea as quickly as possible, then testing it in the marketplace means new entrepreneurs are forced to learn by trial-and-error. By creating opportunities for conversations with other entrepreneurs, technology professionals, investors, and educators, the Michigan Lean Startup Conference can help eliminate some of the error from the process.”

About Face

General Motors last week essentially hit the “dislike” button (what, there is no such thing?) when it comes to advertising on Facebook. The automotive manufacturer basically called Facebook “ineffective” as an advertising venue.

This was right before one of the most anticipated IPOs in history. The social media giant didn’t respond (presumably executives had better things to do), but that didn’t stop others from piling on.

Crown Financial Ministries CEO Chuck Bentley outlined reasons that should concern investors who plan on “liking” Facebook for their portfolios. He discussed his hesitance in a national e-blast to supporters of the 35-year nonprofit that helps people and businesses who are struggling after making bad financial decisions and working to build a strong foundation to “do well.”

“The buzz on Wall Street this week surrounds the long-anticipated initial public offering of the wildly popular social media giant, Facebook. It’s being hyped as one of the biggest initial public offerings in history for an Internet company, and investors are lining up to own a share. I’m not one of them,” Bentley told supporters.

“There are plenty of reasons not to ‘like’ Facebook’s initial public offering — despite the hype that it’s the hottest investment opportunity going. One is the past performance of two other technology darlings — Groupon and Netflix. When Groupon went public last November, its stock opened at $28 a share. I just checked the ticker — it’s now trading at around $14 a share.

“Last summer, Netflix was trading at nearly $300 a share, but for a variety of reasons, including a substantial price hike for its service, revenues have dropped and so has the price of Netflix stock — now trading at around $78.50 a share … If Groupon and Netflix weren’t reason enough to avoid the Facebook IPO, don’t forget the epic fall of MySpace, once a contender as the leading social hub on the web. Rupert Murdoch’s News Corp. purchased it for a whopping $580 million in 2004 and was happy to find a buyer for it last year at $35 million.

“A closer look at the numbers reveals that Facebook will likely follow a similar pattern of over-subscription based upon opening day hype, only to be followed by a struggle to maintain original market valuation … Facebook intends to offer 337.4 million shares at a price of $28 to $35 on NASDAQ under the symbol FB. Although advertising revenues are estimated to reach $6.1 billion in 2012, the valuation would price Facebook stock at 24 times revenue, compared to five times revenue for Google.

“Further, the company is still led Mark Zuckerberg, who turned 28 this week. He’s the unquestioned genius who founded Facebook in 2004 from his Harvard dorm room and promptly dropped out of school to build the business. If the reports of Mr. Zuckerberg that I’ve read are at all accurate, I would be leery about placing confidence in his leadership,” wrote Bentley. “There are always more geeky college freshmen with highly marketable ideas. New and disruptive technology can surface overnight, and there is little to keep users loyal to one over the other.”

Wow, it sure looks like Bentley is in line for a good “de-friending.”

Chile cherries

It’s not clear yet just how much of an impact the frosted fruit buds will have this year — but one Grand Rapids attorney says some processors in West Michigan may have to import fresh fruit, and he thinks they may not be prepared for the legal intricacies of importing.

“The crop loss affects more than the farmer and the fresh fruit consumer,” said attorney Steve Kluting, co-chair of Varnum Law’s food processing group. “Fruit processing is a large force in Michigan’s economy, and it’s been deeply affected by the crop loss. Many Michigan processors have never imported before or haven’t in years. It’s crucial for processors to be educated on the process and the regulations that apply to importing fruit, especially following the significant legal changes that have been implemented since 9/11.”

Kluting said the potential importation of fresh fruit is focused on cherries, and he knows a number of folks in the processing industry who are thinking of importing cherries from Poland.

“We certainly import a number of cherries from Chile, as well,” he added.

Although severe frost hurt the fruit crop from Michigan to upstate New York, the northwest states are also major fruit producers, and the crops there are predicted to be good this year, which will take up some of the slack elsewhere in the country.

Kluting and Mark Bleckley of the Van Andel Global Trade Center hosted a seminar near Traverse City last week to go over “the nuts and bolts” of importing produce from overseas. About eight individuals attended the seminar, according to Bleckley.

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