Wolverine Worldwide, the footwear retailer known for its diverse brand portfolio, has significantly moved into the retail industry. The company recently announced the sale of Sperry, a 90-year-old brand known for its iconic boat shoes, to brand management firm and Reebok owner Authentic Brands Group. This decision marks a strategic shift for Wolverine as it seeks to focus on more promising assets within its portfolio. Canadian retailer the Aldo Group will play a crucial role in Sperry’s future operations, handling various aspects of the brand’s business. In this article, we will explore the details of this deal, its motivations, and the broader trend of retailers streamlining their businesses in the face of economic challenges.
Wolverine World Wide has sold Sperry to Authentic Brands Group, a move aimed at optimizing the company’s brand portfolio. The deal was announced recently, and it comes as Wolverine seeks to channel its resources into more promising ventures within its extensive lineup of apparel and footwear brands.
According to Wolverine, the Canadian retailer Aldo Group will serve as Sperry’s North American operating partner, taking responsibility for wholesale, e-commerce, and store operations and contributing to footwear design, production, and global distribution. This partnership between Aldo and Authentic Brands Group is familiar, as they already collaborate on running brands such as Roxy and Brooks Brothers.
The sale of Sperry is expected to generate $130 million, which Wolverine intends to utilize for debt reduction. Wolverine World Wide initially acquired Sperry in 2012 as part of a $1.23 billion deal, including brands like Saucony, Stride Rite, and Keds.
Brendan Hoffman, Wolverine’s then-CEO, explained the rationale behind the decision, saying, “It just became apparent that Sperry was going to continue to require an investment that was going to take away from where we think the upside is.” This move allows Wolverine to allocate more resources to expand Merrell’s lifestyle business, extend Saucony’s reach, and stabilize Sweaty Betty’s presence in the UK and Ireland.
Wolverine’s decision to sell Sperry reflects a broader trend in the retail industry, where companies are strategically divesting underperforming assets to focus on growth drivers in uncertain economic times. For instance, Calvin Klein’s parent company, PVH, recently sold several lingerie and intimate brands to Basic Resources for $160 million. In earlier transactions, retail giant Walmart also offloaded various brands, including Moosejaw, Bonobos, and Eloquii.
Before the Sperry deal, Wolverine had already moved to sell Keds to Designer Brands for over $90 million and sold the Hush Puppies intellectual property in China, Hong Kong, and Macao for $58.8 million. Additionally, plans were in place to sell the U.S. Wolverine Leathers business for $6 million.
The retail industry has faced challenges with consumers reducing spending due to persistent inflation, high interest rates, and the resumption of student loan payments. Established brands like Foot Locker and Nike have had to adapt to changing market conditions.
In the third quarter of the year, Sperry reported revenue of just $46.2 million, a significant drop of 41.4% from the same period in the previous year when it recorded $78.9 million in sales.
While Sperry’s slow sales had been a drag on Wolverine’s overall business, the brand’s potential revival is now in the hands of Authentic Brands Group, known for acquiring struggling brands and revitalizing them. Authentic plans to expand Sperry’s product offerings, including rainwear, sportswear, bags, and accessories, to increase its global market share.
Authentic Brands Group’s Chairman and CEO, Jamie Salter, expressed excitement about this development, stating, “We are excited to bring Sperry into the Authentic platform… Sperry’s influence extends beyond fashion, embodying a lifestyle that celebrates exploration. We look forward to launching Sperry into a new era alongside ALDO Group, an incredible partner and leader in the footwear industry.”
In November, there were reports that Authentic’s competitor, WHP Global, was also interested in acquiring Sperry. This interest from both Authentic and WHP and HanesBrands’ Champion line aligns with their strategy of integrating acquired brands into their operational model, aiming for better performance and growth.
As Wolverine World Wide embarks on this new chapter with the sale of Sperry, the retail industry’s transformation continues, driven by the need to adapt to changing consumer behaviours and economic conditions. The acquisition by Authentic Brands Group and its partnership with Aldo Group offer a promising future for the iconic Sperry brand as it explores new avenues for expansion and innovation in the ever-competitive retail landscape.
