At the 8th Annual Consumer Conference of Cowen and Company held in New York on Jan. 11-12, the leadership of Wolverine World Wide said it is aiming to take Merrell’s annual sales up to $1 billion as it expands in apparel and accessories, increases direct sales and better penetrates existing sales channels. Since it bought Merrell in 1997, sales of the brand have grown from $25 million to more than $400 million.
Europe is going to be a focus, as Don Grimes, Wolverine senior vice president and chief financial officer, sees the best chance for short-term growth there. The Europe, Middle East and Africa (EMEA) region is 150% the size of the American market, yet Merrell’s sales there are 36 percent lower than in the U.S. The company thinks it can sell 4.4 million more pairs of footwear per year in Europe, and 5 million more in in the Asian region.
The development of Merrell’s apparel collection is an important pillar of Wolverine’s growth strategy, and this segment is rising and moving toward break-even results. Wolverine’s goal is to have apparel and accessories make up 15 percent of Merrell’s total sales by the time it hits $1 billion.
Wolverine also plans to expand in own retail. That channel currently makes up 7 percent of Merrell’s sales, but by opening new stores and increasing online sales, that figure should also get up to 15 percent of sales.
Grimes noted that only 8 percent of American men recognize the Merrell brand, putting it at No. 79 among global footwear brands. However, he said this showed opportunity for Merrell to grow further. The company will spend more on direct consumer messaging, money it will save from cost-cutting in operations, he said.