Wolverine sells Asia-based leather business, strenghtens Chinese joint venture

Outerwear group Wolverine World Wide has announced further efforts to advance the company’s ongoing transformation programme into a “consumer-obsessed growth category”.

Among its newly revealed moves, Wolverine has said that it has secured a 61 million dollar agreement to sell minority ownership interest in the subsidiary that owns the Saucony intellectual property and the company’s equity interest in Merrell and Saucony joint venture entities to Xtep in China.

The decision builds on Wolverine’s already established relationship with Xtep, which it initially partnered with in 2019 to launch the Merrell and Saucony brands in the region.

Through the new agreement, the sportswear specialist now has the accelerated option to purchase a 40 percent minority ownership interest in the Saucony intellectual property in light of the “early success and profitability” of the brand in China.

Xtep takes on Chinese operations of Merrell and Saucony

In addition to this, Wolverine has also agreed to sell its equity interest in the Merrell and Saucony joint venture to a wholly-owned subsidiary of Xtep, transitioning the business to a distribution rights model through which Xtep will carry out development, marketing and distribution for the brands.

The company said that the sale reflected the “growth aspects” of the two labels in China, with a new operating model set to leverage Xtep’s expertise and resources in order to further their potential in the market.

Wolverine has also said that it has entered into a definitive agreement to sell its Asia-based Wolverine Leathers business to the current materials vendor of the company, Interhides Public Company Limited, for around nine million dollars.

This completed the company’s previously announced objective to sell the subsidiary and follows on the path of recently announced transactions made over the last year, including the sale of Keds, Hush Puppies IP in Asia and the US leather business.

Speaking on the ongoing transformation, Chris Hufnagel, president and CEO of Wolverine, said in a release: “We’ve taken fast, bold, and decisive actions to stabilise the company today, while working to transform Wolverine Worldwide for the future.

“Our actions over the past four months have served to simplify our business model, reduce our cost structure, and strengthen our balance sheet. While our work isn't done, we enter the new year with a clear vision for the future, enhanced ability to invest in our brands and platforms, and ultimately, a better position to deliver stronger returns for our shareholders.”