Wolverine Worldwide closes 60 stores
Wolverine Worldwide is planning to close 60 more stores.
The Rockford-based footwear and apparel maker made the announcement this week during its fourth quarter and year-end earnings conference call.
Mike Stornant, SVP and CFO, Wolverine Worldwide, said the closures will be stores reaching their lease expirations.
No additional details were provided related to the closures.
Wolverine announced a “strategic re-alignment” plan in July 2014. At that time, it said it will close 140 stores over an 18-month timeline, with most of the closures involving its underperforming Stride Rite brand.
At the time, the company noted the Stride Rite brand was suffering as a result of consumers shifting to online purchasing versus in-store buying.
Under the plan, Wolverine closed 58 stores in 2014 and 46 stores in 2015, and it plans to close about 35 stores in the first quarter of this year, according to Ainslee Neitzel, communications specialist, Wolverine Worldwide.
Based on remarks by Blake Krueger, chairman, CEO and president of Wolverine, and Stornant in this week's earnings call, it appears the brand is still struggling to survive in an increasingly online retail world.
“Stride Rite plays an important role as a children's expert in our portfolio and has a profitable and healthy wholesale and e-commerce business,” Krueger said. “However, its store business has underperformed.”
He said as a result, the company accelerated store closures in 2015 and improved the performance of "go-forward stores" by “infusing new leadership” and applying a sharp focus to the business during the “all important” back-to-school and holiday seasons.
He also said to further align and leverage its direct-to-consumer operations, Stride Rite was moved into a consolidated Consumer Direct group last November.
Krueger said decisions related to the brand have resulted in a year-over-year comparative sales trend improvement of more than 500 basis points in the fourth quarter relative to the first three quarters of the year.
“Encouragingly, these better results have continued and accelerated in early 2016,” he said.
In addition to the planned 2016 closures, Krueger said Wolverine will improve the profitability of its go-forward stores and focus on its “rapidly growing e-commerce business.”
Overall, Wolverine characterized the past year as a “challenging retail environment” with “worsening global economic pressures” and said it expects to see those trends continue throughout 2016.
“This last quarter was incredibly volatile for the whole industry as global economic pressures worsened, holiday sales were tepid and unseasonably warm weather impacted many regions,” Stornant said.
Despite the noted challenges, Wolverine emphasized a bright outlook for several of its brands, including Merrell, Sperry and Saucony.
“Over the past 12 months, we better positioned Merrell, Sperry and Saucony, our three largest brands, for future growth expansion as leading head-to-toe lifestyle brands,” Krueger said.
He also noted the company expanded its international footprint by executing 121 distribution agreements in 2015 and accelerated its e-commerce growth, which he noted was up nearly 20 percent year over year and almost 25 percent in the fourth quarter, thanks to “investments in talent and resources and by leveraging our new digital platform.”
Investments will be made in the coming year in the area of consumer insight.
“We firmly believe that growth starts with intimately knowing our consumers,” Krueger said.
He said Wolverine plans to “significantly increase our investments” in consumer insight, by more than doubling its people and resources in this area.
Wolverine will also roll out a new innovation and design center focused on the consumer, product design and marketing this year to “amplify trend research.”
“The innovation and design center will act as a powerful catalyst for innovation across the organization,” Krueger said.
“Through consumer insights, product innovation and compelling marketing, we remain focused on organically growing our brands around the world.”