ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, March 7, 1996 TAG: 9603070005
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: ROCKFORD, MICH.
SOURCE: Associated Press
THE MAKER OF HUSH PUPPIES is striding ahead, with the help of its outdoors wear.
Sure, they have that famous long-eared dog. But don't overlook the steel-toed boots.
Wolverine World Wide Inc., perhaps best known as the maker of Hush Puppies, has resurrected itself from a drifting footwear company to a major player in the shoe industry.
While the Hush Puppies line has given Wolverine most of its name recognition, international licensing agreements and corporate partnerships have helped thrust the Rockford, Mich.-based company into its best times ever.
``Overall retail conditions in the last 18 months have been disastrous'' for the industry as a whole, said Geoffrey Bloom, Wolverine's president. ``The two growth areas have been casual and outdoors. We've been able to grow in this climate because we have hot products.
``We're not telling analysts we're going to rocket to the moon, but we'll continue to have double-digit growth,'' Bloom said.
Wolverine offers a broad line of footwear: slippers produced for the L.L. Bean and Land's End catalogs; heavy boots for dirty work; hiking boots for the weekend crowd; and the born-again Hush Puppies, casual shoes that now are as likely to be on fashion runways as they once were on grandma's feet. Hush Puppies, in fact, is being counted on to sustain the momentum.
``Nordstrom wouldn't have wrapped fish in our catalog a year ago,'' Bloom said. ``At the New York shoe show, J.C. Penney, Saks and Bloomingdale's were arguing over what colors they would be buying.''
But Hush Puppies' resurgence in the United States is not driving the bottom line yet. Much of the credit goes to the success of licensing agreements, which allow other shoe makers to slap Wolverine's brand names on their products in exchange for royalties.
``That licensing income is the untold story,'' said David Jarrett, a retail analyst at Gerard Klauer Mattison & Co. ``The beauty of that business is that Wolverine has no capital invested. They don't have to manage and control a sales force in 80 countries. ... They don't have the inventory risks. It's risk-free.''
About 50 percent of Wolverine's earnings comes from such licensing and distribution deals, the company said. For the nine months ended Sept. 9, the most recent available figures, the company earned $11.6 million, up 59 percent from the same period in 1994. Revenues were $263 million, up 10.5 percent.
In addition, a boot deal with Caterpillar Inc., the world's largest maker of earth-moving equipment (and parent of Carter Machinery Co. of Salem), also has enhanced earnings. Wolverine made or licensed 3 million pairs of the rugged Cat boots in 1995, compared with 2 million in 1994.
While last year's balance sheet is still being tallied, analysts surveyed by Zacks Investment Research estimate earnings at $1.40 per share for 1995, compared with $1.10 per share in 1994.
Wolverine will continue to look to its boot division to capture a large portion of sales, and the company also wants to grow through acquisitions.
``We're not going to double the size of the company in two years,'' he said. ``We think we're better served as niche players. There's a lot of consolidation going on in our industry. We want to take advantage of it.''
LENGTH: Medium: 71 lines ILLUSTRATION: PHOTO: AP. Wolverine World Wide President Geoffrey Bloom showsby CNBoff the not-so-secret to the company's recent success - a line of
leather boots. Outdoors wear is one of the few areas of retail sales
that have been robust recently, and Wolverine has been well placed
to take advantage of the wave. color.