When I recently saw back-to-back announcements from two small Northwoods companies, Duluth Pack and Stormy Kromer, that they were partnering with hiking boot maker Merrell on jointly-branded products, I wondered what was up. Fortunately Merrell is in my own backyard here in West Michigan, so investigating that wasn’t too difficult.
The brand is owned by boot, shoe and apparel maker Wolverine World Wide and has its offices on the corporate headquarters campus in Rockford, just north of Grand Rapids. Wolverine has a mixed year going. Its quarterly earnings data released last month showed earnings per share for the quarter at $0.68, which beat the consensus estimate by $0.5. But the company lowered its projected fiscal 2019 earnings per share to $1.96 from its previous $2.06 estimate, with its adjusted earnings estimate dropping to $2.25 per share versus its previous $2.28 per share. Its estimates for total revenue stayed constant at $2.28 billion, up slightly from last year’s $2.24 billion. The company cited tariffs as the primary element in lowering their earning guidance.
Merrell is a bright spot in their picture, and one of the key drivers of growth for the company. The largest brand in the Wolverine portfolio, they expect to deliver a mid-single-digit sales increase for the year. They make up almost half the revenue of the company’s Michigan Group brands, which include Merrell, CAT Footwear, Wolverine, Chaco, Hush Puppies, Bates, Harley-Davidson Footwear, and Hy-Test.
“We’re lucky to be part of Wolverine,” said Merrell’s President, Chris Hufnagel. “They bring us so many advantages as one of the biggest players in the industry. There are certainly efficiencies that come from sharing back-office and sourcing functions. But the company has made the conscious choice to let their brands stand by themselves.”
For Merrell, that’s natural. They were already a solidly-run outfit before joining forces with Wolverine in 1997. They were founded in 1981 by gifted cowboy boot craftsman Randy Merrell, who decided he’d give hiking boot-making a try. He teamed up with former ski company executives Clark Matis and John Schweizer. Matis had been an all-American skier and brought his athletic insight to the design process, while Schweizer brought a wealth of industrial experience to the table. Their Wilderness model, designed to last a decade and hailed by outdoors aficionados as the best and most comfortable hiking boot ever made, remains in production today.
The brand’s focus on the outdoors, and on the people who enjoy it, remains as strong as ever. “We think there’s a profound power in the trail,” Hufnagel said. Today that means not only continuing to feed the needs of existing hiking aficionados, but bringing others outside as well. “Merrell plays a part in reconnecting people with the outdoors,” he added. “We want to get people off their screens, away from all the doom and gloom in the news.”
Getting more people onto the trail is both a corporate value and a growth driver. “The trail is for everybody,” Hufnagel explained. “We’re big believers in inclusion, and for us that means presenting the outdoors in ways that include everybody. Our products and our marketing support getting people of all backgrounds out into the wild.”
The partnerships I mentioned at the start are another element of that effort, and while they’re the first that caught my eye, they’re just the latest in a long line of such pairing for Merrell. “I think collaborations are great,” said Hufnagel. “Each one is special and unique. We look to learn from them, to keep optimizing our products. And they help deepen our reach to customers’ hearts and minds.”
The first of the latest two partnerships, announced in September, was with winter hat and apparel company Stormy Kromer of Ironwood, Michigan. The collaboration includes a co-branded capsule collection featuring waxed canvas and custom plaid jackets and caps and purpose-made footwear. “Stormy Kromer is a fellow Michigan company, and they have a similar pride in their community,” Hufnagel said. “We like being side by side with a company with similar values.” Stormy Kromer President Gina Thorson agreed. “For a smaller brand like ours, we see value in partnerships like this in the exposure and credibility it brings us. Obviously, Merrell’s reach is far broader than ours and getting exposure to their customers through a great product collection has tremendous value. And if a company like Merrell is partnering with us, then we must have something interesting going on. It was a real joy working with the Merrell team on this project–it was a true partnership with creative contributions from both teams and a willingness to work through the inevitable challenges that present themselves when two different companies come together to create something new.”
Merrell’s collaboration with made-in-America bag and pack manufacturer Duluth Pack of Duluth, Minnesota, was announced in October, and featured two new styles of co-branded outdoor unisex work boots. “Duluth Pack is small and nimble, and they’re able to do some really cool things,” said Hufnagel. “They’ve got that heritage of really high-quality craftsmanship that can really help us connect with a new audience.” For Duluth Pack CEO Tom Sega, it was the realization of a long-standing dream. “I met Greg Glover [Merrell’s Product Line Manager] at a trade show years ago, and we first started talking about a collaboration probably five years ago,” he said. “We just wouldn’t let it go–we thought it could be all about our shared focus on high-quality materials and our iconic styles. We weren’t after a big product, but wanted it to be something great, cool and fun, and to tell the story of how big and small companies can come together. Lots of people tell me these are their most comfortable boots ever.”
Merrell will keep looking for opportunities like these. “We’ll definitely keep doing these kinds of collaborations, and would certainly be interested in working with those two great brands again,” Hufnagel said. “We’ve got some other great collaborations going, including our work with Outdoor Voices, where we have a shared value of getting people outside. We’re leveraging our Moab boot there, and since Outdoor Voices has built their business on connecting with women, it’s an opportunity for us to further our outdoor appeal with the female audience. We also launched a really cool sandal earlier this year with Filson, an awesome brand out of Seattle, and we’re excited to continue working with them in the future.”
Merrell believes strongly in environmental stewardship as well. “We provide what you need to enjoy what we think is one of the greatest things, the trail–the great outdoors,” said Hufnagel. “We also work hard to protect that for future generations. Brand purpose really means something to the Merrell team. We have a lot of people who come to work for us specifically because of that, because we feel it’s our responsibility to help protect the trail.”
Hufnagel feels that Merrell is well-positioned for the changing marketplace. “There’s intense competition in this business,” he said. “People don’t shop for shoes like they used to, spending hours visiting stores and trying things on. They sit in their living rooms and spend a few minutes looking at what’s out there, then order some to try and ship them back if they don’t work. With the pace of change and disruption, you have to be able to pivot to win, and have the intestinal fortitude to change. It used to be that the big companies ate the small. Now the fast eat the slow. We admire those start-up brands that come out of nowhere, and we want to be like ourselves–small and scrappy, fast and nimble.”