Wolverine initiates workforce reduction, to divest Keds and Leathers businesses

Wolverine World Wide announced planned changes to its portfolio. The company has started a formal process to divest or license the Keds brand and Wolverine Leathers business, both of which are low-profit contributors. This move builds upon the company’s strategy to reduce complexity and prioritize growth brands in an effort to increase long-term shareholder value. In connection with these brand and organizational changes, the company initiated a workforce reduction earlier this week. The company expects this initiative to result in approximately $30M in savings in 2023. Including the impact from the workforce reduction noted above, the company expects to realize total savings of approximately $45M in 2023 from organizational synergies and other indirect cost areas. In addition, the company plans to build on the supply chain cost initiatives started earlier this year and expects to realize approximately $20M of savings in 2023. The company continues to focus on optimizing working capital as a meaningful source of cash over the coming months. On December 7, the company finalized a new accounts receivable securitization program that is expected to generate $175M in accelerated cash flow at favorable pricing. Inventory reduction remains a top priority with meaningful progress made thus far in the fourth quarter. Future cash flow generated from these efforts will be used to pay down outstanding debt.