Wolverine World Wide, Inc. announced a strategic restructuring plan that the company said will create significant operating efficiencies, improve its supply chain and create a stronger global brand platform. This plan represents the second phase of a top-to-bottom strategic review of the company's branded businesses and related infrastructure. The first phase of this review resulted in Wolverine's decision over a year ago to exit several non-core businesses.
 
The restructuring plan includes: consolidation of key distribution and global operations functions; realignment of the company's domestic manufacturing operations; consideration of a range of alternatives for the company-owned leather business; and a corporate cost-reduction program.


The company estimates pretax charges related to the restructuring plan will range from $31 million to $36 million. The company will record these charges throughout 2009 as it executes specific initiatives.

 

Approximately $9 million to $10 million of this estimate represents non-cash charges. When fully implemented, the company expects the restructuring plan will result in a net reduction of approximately 450 positions and will generate an annualized pretax benefit in the range of $17 million to $19 million.

“Strong and resilient companies continually assess their operating model and related infrastructure, and make changes to stay ahead of the curve,” said Blake W. Krueger, CEO and president. “The initiatives announced today position Wolverine for continued success by improving our supply chain, enhancing customer responsiveness and streamlining our operations. As a Company, we pride ourselves on our strong team and do not take these workforce and cost reductions lightly. We will ensure that all those impacted will be treated with the utmost respect and receive our assistance with their transition.


“Wolverine is a dynamic global company with a 125-year heritage, and we have the right brands, the right products and the right team to weather the current economic storm and emerge as a more powerful force in our industry. We are confident that the restructuring plan announced today is the right balance of actions, and positions the Company well for future growth.”


The specific action items included in this global restructuring initiative include:


– Realigning U.S. manufacturing operations to better support Bates military footwear production.


– Consolidating North American distribution operations into existing Michigan warehouses and consolidating the company's European distribution operations into one facility.


– Evaluating strategic alternatives for the company's leather business, which will likely result in the outsourcing of leather processing and the closure of its Rockford, Michigan-based tanning facility.


– Implementing workforce reductions among both salaried and hourly staff in order to focus business processes and improve overall efficiency.


In addition to the actions noted above, the company is reducing other operating costs to better align its infrastructure with current and anticipated business conditions, including freezing salaries for non-union employees.


Wolverine to Acquire Cushe

Wolverine World Wide, Inc. announced the acquisition of the Cushe (pronounced “cushy”) footwear brand, a move the company says will drive new global opportunities and leverage the strength of Wolverine's proven business model and operating infrastructure. Terms of the transaction were not disclosed.