Patagonia and Wolverine World Wide have inked a licensing agreement under which WWWs Merrell brand will design, manufacture, and market under the Patagonia name with rights to Water Girl and Lotus Designs. The first product line is expected at retail in spring 2007. The products will be distributed through 32 Patagonia stores in the U.S., Europe and Japan, through Patagonias current distribution network, and in premium footwear and outdoor specialty stores.
SEW spoke with Tim ODonovan, chairman and CEO of Wolverine World Wide, who said that Merrell will be creating an all-new sales organization to handle the Patagonia line. Merrell will be recruiting new talent in its sales and design departments to handle the new brand.
“In our discussions with Patagonia, they felt that their sales team had a full plate, and our sales team certainly has a full plate as well, so we thought it best to create a separate sales force to handle the Patagonia footwear line,” Mr. ODonovan said. “This new sales force will fit under the Outdoor Group that Jacques (Lavertue) runs today. Obviously, we will leverage the existing management where we are able”
While Patagonia and Merrell are both positioned as premium outdoor brands, ODonovan doesnt feel that there is much risk of cannibalization.
“When we look at the Patagonia customer, we find that only about one quarter of that demographic currently buy Merrell product,” he said. “That leaves three quarters of their customer base open and clearly we see a lot of opportunity there.”
With Patagonia boasting roughly $240 million in annual sales, this deal could represent some considerable volume for Wolverine and Patagonia alike.
Along with the licensing deal, Merrell has decided to join 1% for the Planet, a non-profit organization co-founded by Yvon Chouinard. Under this program, Wolverine World Wide will contribute 1% of sales of Patagonia footwear to environmental organizations. Mr. ODonovan said that WWW is interested in the opportunities to mirror many of the environmentally conscious activities Patagonia has developed.
In a release, Michael Crooke, president and CEO of Patagonia, said, “Patagonia is a brand that is focused on what we love to do outdoor activities that entail some risk, while requiring soul and inviting reflection. Footwear that bears our brand names must have that same spirit and commitment. Wolverine World Wide and Merrell are a natural fit with us.”
ODonovan also told SEW that Merrell sees opportunity in both technical footwear and casual footwear under the Patagonia brand name and that Merrell will explore any footwear product line that will appeal to Patagonia customers.
