Business Segments

12 Months Ended

Jan. 03, 2015

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

The Company’s portfolio of brands is organized into the following three operating segments, which the Company has determined are reportable operating segments.

• Lifestyle Group, consisting of Sperry Top-Sider^® footwear and apparel, Stride Rite^® footwear and apparel, Hush Puppies^® footwear and apparel, Keds^® footwear and apparel and Soft Style^® footwear;

• Performance Group, consisting of Merrell^® footwear and apparel, Saucony^® footwear and apparel, Chaco^® footwear, Patagonia^® footwear and Cushe^® footwear; and

• Heritage Group, consisting of Wolverine^® footwear and apparel, Cat^® footwear, Bates^® uniform footwear, Sebago^® footwear and apparel, Harley-Davidson^® footwear and HyTest^® safety footwear.

The reportable segments are engaged in designing, manufacturing, sourcing, marketing, licensing and distributing branded footwear, apparel and accessories. Reported revenue of the reportable operating segments includes revenue from the sale of branded footwear, apparel and accessories to third-party customers; income from a network of third-party licensees and distributors; and revenue from the Company’s mono-branded consumer-direct business.

The Company also reports “Other” and “Corporate” categories. The Other category consists of the Company’s multi-brand consumer-direct business, leather marketing operations and sourcing operations that include third-party commission revenues. The Corporate category consists of unallocated corporate expenses including acquisition-related transaction and integration costs and restructuring costs. The Company’s operating segments are determined based on how the Company internally reports and evaluates financial information used to make operating decisions. The Company allocated goodwill in accordance with FASB ASC Topic 350, Intangibles – Goodwill and Other in connection with the reorganization of the Company’s brand portfolio in the first quarter of fiscal 2013.

The accounting policies of each operating segment are the same as those described in the summary of significant accounting policies set forth in Note 1 to the consolidated financial statements.

Company management uses various financial measures to evaluate the performance of the reportable operating segments. The following is a summary of certain key financial measures for the respective fiscal periods indicated.

	Fiscal Year
(In millions)	2014			2013			2012
Revenue:
Lifestyle Group	$	1,059.3		$	1,086.6		$	309.6
Performance Group	990.7			945.8			674.6
Heritage Group	607.0			567.4			563.9
Other	104.1			91.3			92.7
Total	$	2,761.1		$	2,691.1		$	1,640.8
Operating profit (loss):
Lifestyle Group	$	130.2		$	168.2		$	44.6
Performance Group	197.6			179.8			128.4
Heritage Group	95.4			85.7			83.5
Other	3.9			0.2			(1.1		)
Corporate	(197.2		)	(241.6		)	(141.7		)
Total	$	229.9		$	192.3		$	113.7
Depreciation and amortization expense:
Lifestyle Group	$	7.5		$	6.5		$	2.0
Performance Group	3.5			3.7			3.0
Heritage Group	1.1			1.2			1.2
Other	4.0			4.1			4.0
Corporate	37.2			40.7			17.5
Total	$	53.3		$	56.2		$	27.7
Capital expenditures:
Lifestyle Group	$	9.1		$	18.3		$	1.7
Performance Group	3.6			3.3			1.9
Heritage Group	0.5			0.9			0.3
Other	4.3			5.4			2.5
Corporate	12.5			13.8			8.5
Total	$	30.0		$	41.7		$	14.9

(In millions)	January 3, 2015		December 28, 2013		December 29, 2012
Total assets:
Lifestyle Group	$	1,378.8	$	1,431.1	$	1,338.3
Performance Group	485.8		476.4		513.7
Heritage Group	246.4		247.2		319.0
Other	52.1		56.9		80.8
Corporate	341.4		410.6		362.6
Total	$	2,504.5	$	2,622.2	$	2,614.4
Goodwill:
Lifestyle Group	$	323.8	$	329.0	$	349.5
Performance Group	92.5		92.8		87.0
Heritage Group	22.5		23.5		23.4
Total	$	438.8	$	445.3	$	459.9

Geographic dispersion of revenue from external customers, based on shipping destination is as follows:

	Fiscal Year
(In millions)	2014		2013		2012
United States	$	1,990.2	$	1,984.8	$	1,079.9
Foreign:
Europe, Middle East and Africa	391.0		362.0		310.1
Canada	163.0		166.2		112.6
Other	216.9		178.1		138.2
Total from foreign territories	770.9		706.3		560.9
Total revenue	$	2,761.1	$	2,691.1	$	1,640.8

The location of the Company’s tangible long-lived assets (primarily property, plant and equipment) is as follows:

(In millions)	January 3, 2015		December 28, 2013		December 29, 2012
United States	$	126.8	$	136.7	$	136.8
Foreign countries	10.0		15.2		14.2
Total	$	136.8	$	151.9	$	151.0

The Company does not believe that it is dependent upon any single customer because no customer accounts for more than 10% of consolidated revenue in any year.

During fiscal 2014, the Company sourced approximately 99% of its footwear products from third-party suppliers located primarily in the Asia Pacific region. For fiscal 2014, the remainder was produced at Company-owned manufacturing facilities in the U.S. All apparel and accessories are sourced from third-party suppliers. While changes in suppliers could cause delays in manufacturing and a possible loss of sales, management believes that other suppliers could provide similar products on comparable terms.