Sperry Top-Sider Bill fish Tan and Beige.
Mayra Beltran | Houston Chronicle | Getty Images
Wolverine World Wide has sold Sperry to brand management firm and Reebok owner Authentic Brands Group, because the footwear retailer looks to concentrate on higher performing assets, the corporate announced Thursday.
Canadian retailer the Aldo Group has been tapped because the brand’s North American operating partner and will likely be in control of wholesale, e-commerce and store operations, Authentic said in a news release. Aldo can even work with the brand on footwear design, production and global distribution. It already works closely with Authentic on running brands like Roxy and Brooks Brothers.
The deal will generate $130 million, which Wolverine plans to make use of to pay down debt, it said.
Wolverine originally acquired Sperry, a 90-year-old brand, in 2012 from Payless ShoeSource owner Collective Brands in a $1.23 billion deal that also included Saucony, Stride Rite and Keds.Â
Wolverine, which runs a portfolio of apparel and footwear brands that features Merrell, Hush Puppies and Sweaty Betty, said in May it was in search of strategic alternatives for Sperry after it realized the investments the segment needed could be higher served in other parts of its business.Â
“It just became apparent that Sperry was going to proceed to require investment that was going to remove from where we expect the upside is,” Wolverine’s then-CEO, Brendan Hoffman, said on a call with analysts in May after the corporate reported fiscal first-quarter earnings.Â
He said the choice would allow Wolverine to place more resources behind expanding Merrell’s lifestyle business, extending Saucony’s reach beyond its core lively and lifestyle consumers, and stabilizing Sweaty Betty’s home market within the U.K. and Ireland.Â
Retailers slim down
Wolverine’s decision to sell Sperry comes as retailers look to streamline their businesses and concentrate on growth drivers by carving out their underperforming assets as they navigate an increasingly uncertain economy.Â
In November, Calvin Klein’s parent company, PVH, sold a trio of lingerie and intimates brands – True & Co., Warners and Olga – to Basic Resources for $160 million. Walmart, meanwhile, offloaded Moosejaw, Bonobos and Eloquii in a series of transactions earlier within the yr.Â
Before its decision to sell Sperry, Wolverine made a deal to sell Keds to Designer Brands, the parent company of DSW, for greater than $90 million. It sold the Hush Puppies mental property in China, Hong Kong and Macao for $58.8 million. It also has plans to sell its U.S. Wolverine Leathers business for $6 million.Â
The retail industry has seen consumers pull back on spending as they face persistent inflation, high rates of interest and most recently, the resumption of student loan payments. However the footwear and apparel sectors have felt that pressure acutely.
Foot Locker has reported quarter after quarter of sales declines, and even Nike has began a $2 billion restructuring because it prepares for what it called a “softer” revenue outlook.
Within the three months ended Sept. 30, Sperry posted just $46.2 million in revenue, a 41.4% drop from the year-ago period, when it saw $78.9 million in sales.Â
While slow sales at Sperry have dragged on Wolverine’s overall business, the downturn has created an attractive entry point for Authentic, which is within the business of shopping for struggling brands at attractive valuations after which putting within the resources obligatory to revive them.Â
Now that Sperry is an element of Authentic’s portfolio, it plans to grow Sperry’s product offerings including rainwear, sportswear, bags and accessories in a bid to expand its market share globally.
“We’re excited to bring Sperry into the Authentic platform,” Jamie Salter, chairman and CEO of Authentic, said in an announcement. “Sperry’s influence extends far beyond fashion, embodying a way of life that celebrates exploration. We sit up for launching Sperry right into a recent era alongside ALDO Group, an incredible partner and leader within the footwear industry.”
In November, CNBC reported that Authentic competitor WHP Global was also fascinated about buying Sperry. On the time, GlobalData retail analyst Neil Saunders said Authentic’s and WHP’s interest in Sperry, in addition to Hanesbrands‘ Champion line, made “perfect sense.”Â
“They’ve a superb operational backdrop that they will integrate these brands into, whether that be through licensing, through international expansion, through getting them into physical retail more, through selling them direct to consumer,” Saunders said previously. “They almost have an operating model which you could just kind of drop brands into and begin seeing higher performance.”Â
