The US footwear and clothing company Wolverine World Wide Inc. announced on Monday the next steps in its ongoing reform program. This time, the Asia business of the recently weakened group of companies was affected.
The group announced that it will sell its share in a joint venture that operates the shoe brands Saucony and Merrell in China to its cooperation partner Xtep International Holdings Limited. Both companies founded the joint venture in 2019 to establish the running shoe labels in the Chinese market.
With the completion of the transaction, the previous joint venture will become a full subsidiary of Xtep, explained Wolverine World Wide. The Hong Kong-based sporting goods manufacturer will in future act as a licensing and sales partner for the two brands in the country.
The ailing company is divesting itself of numerous business areas as part of its austerity program
According to the group, Xtep will also acquire a minority stake in the company that holds Saucony’s intellectual property rights in China under an existing option. Wolverine World Wide estimated the total proceeds from the now announced agreements with Xtep at 61 million US dollars (56 million euros).
The group also completed the separation of its Wolverine Leathers division. The group announced that its activities based in Asia would be sold to the Thai supplier Interhides Public Company Limited for around nine million US dollars. The US segment of Wolverine Leathers had already been sold in August.
The current transactions were preceded by the sales of the shoe brand Keds and the intellectual property of the Hush Puppies label for the Chinese, Hong Kong and Macau markets in recent months. The aim of the measures is to “simplify the business model, improve the cost structure and strengthen the balance sheet,” explained CEO Chris Hufnagel, who has led the troubled group since mid-August.