Wolverine World Wide Inc. (WWW)
Goldman Sachs 2012 Global Retailing Conference Transcript
September 6, 2012 2:35 PM ET
Blake Krueger - Chairman and CEO
Don Grimes - Chief Financial Officer
Christi Cowdin - Investors Relations
Chris Barry - Goldman Sachs
Chris Barry - Goldman Sachs
Previous Statements by WWW
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So what I’m going to do is I’m going to pass over to Blake. He’s going to through some slides, then Don going to have some material as well and then we’ll go into Q&A. Blake?
Thanks for your time this afternoon. As most of you know we posted some slides for this conference this morning on the internet. And Don and I are going to quickly go through these slides and then we will open it up to any questions. I won’t bother to read the forward-looking statements clause here.
But just I know many of your familiar with Wolverine World Wide, just for those you that aren’t. We’ve been around a long-term since 1883. We headquarter at in Michigan. We last year marketed around 52, 53 million pair of footwear in the units of apparel and about 190 plus countries around the world.
We own our operations in Europe. We own our operations and run them directly in Canada and the United States, and then we operate through a distributor network that we’ve had in place since 1959. So 1959, we took the one-year old Hush Puppies brand international that’s given us 30, 40, 50-year base of partnership and relationships around the world for our brand.
Our vision hasn’t changed in many years fundamentally. We’re focused on innovation as a company, it can be on the apparel side, it can be on the footwear side, it can be on the supply chain side, it can be on processes. But we are focused innovation, moving beyond just footwear and then expanding our international base of business.
This graph which I think on slide three or four shows our brand activity over the last 15 years or so. So the top part of this graph shows the brands we’ve acquired over that period of times, starting with Caterpillar and Merrell and Harley-Davidson and HyTest early on, and most recently with Saucony, Sperry, Stride Rite and Keds. I’ll talk a little bit more about the PLG acquisition in a moment.
Over that same spend of years we’ve moved just beyond the United States and operate directly in Canada. Took over our distributor operations in Europe and recently earlier this year announced some joint ventures. One in India with the Tata Group and then one in Colombia with the long time multi decade partner of the company.
Today we operate within three different branded groups. The first group is the Outdoor Group. This is our largest group in terms of revenue and earnings generated for the corporation.
The Merrell Brand, a brand we bought about 11, 12, 13 years ago now, was about $25 million when we bought it, it’s about $500 million in sales today in about 150 countries around the world, but also within this group Patagonia footwear and Chaco. Chaco was a performance sandal brand we picked up a couple of years ago. Number one performance in sandal brand and the outdoor retail sector in the United States.
Our second group is what we call our Lifestyle Group today, that Hush Puppies brand we invented in 1958. Again, in about 150 countries around the world, Sebago brand we acquired about 10 years ago, probably the most premium brand in our portfolio, especially within Europe, where that brand is strong and then probably the most useful brands in our portfolio Cushe, which focused on action sports serve in that Lifestyle market.
Our third group is our heritage group, again composed of Wolverine brand, the name on our stock certificate, number one a boot brand in USA work, Caterpillar brand, our global Lifestyle brand, but also very important in the USA work market in Bates and Harley-Davidson.
So we recently announced on May 1 and we’ll get some updates today our acquisition of the PLG Group, which is formally the publicly traded Stride Rite Corporation that was bought Payless Corp., Payless Corporation several years ago.
We’re very excited about this transaction. Frankly, we’re more excited today, more enthusiastic, more optimistic today then we were on May 1 or as we went through this small time month process, following the closing of this and Donald have some more details in a minute, following the closing of this transaction, which would take place with the next three -- within the next three or four weeks.
We will be the largest non-athletic footwear company in the world with about 100 million pair of footwear and units of apparel sold in well over 200 countries around the world. I say, largest non-athletic footwear company with all do difference to Saucony and to several collections within the Merrell brand.
When we look at the combination of our current 12 brand portfolio with these four brands, we’re very, very excited. It becomes almost a one stop shopping for many of our international distributors and for many of our retail partners. We cover all genders, all age groups, all distribution channels, all consumer groups. It’s really a very and very powerful brand portfolio, the largest in the world.