Wolverine to outsource leather

The reductions, which include both salaried and hourly staff, are expected to result in annual savings of between $17.0 million and $19.0 million, before tax. Charges resulting from the restructuring plan are said to be between $31-$36 million.

‘The initiatives announced position Wolverine for continued success by improving our supply chain, enhancing customer responsiveness and streamlining our operations', chief executive Blake Krueger said.

The first phase of the shoe manufacturer's restructuring involved exiting non-core businesses. The company have shifted their focus to realigning US production to better support the Bates military footwear line. Wolverine also aim to limit distribution to existing warehouses in Michigan and slim down European distribution to one facility. Additionally, the company expressed interest in outsourcing their leather work, which could close their Michigan tanning facility.

At the same time, the company, whose brands include Hush Puppies, Merrell and Patagonia Footwear, said they had agreed to acquire Cushe footwear, which was founded by a designer who previously helped design collections for several Wolverine brands. Terms of the deal were not disclosed.

Krueger expressed confidence in the potential of the Cushe brand, which is popular amongst younger consumers, despite its modest sales of 100,000 pairs, annually.

Source: Forbes.com