XTep forms China venture with Wolverine to sell Merrell, Saucony shoes and sports apparel

Merrell and Saucony, the two brands under Wolverine, will each target to open between 400 and 500 stores in mainland China in five years

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Xtep's product display at Xtep International annual results at Island Shangri-la Hotel in Admiralty on 12 March, 2014. Photo: SCMP

Published: 6:53pm, 5 Mar 2019Updated: 10:38pm, 5 Mar 2019

XTep International Holdings will form a venture in China with Wolverine World Wide to sell Merrell footwear, Saucony running shoes, apparel and accessories, adopting a similar multi-brand business strategy as its bigger Fujian compatriot Anta Sports Products.

Xtep, based in Quanzhou city of Fujian province, will commit 155 million yuan (US$23 million) in initial funding toward the 50:50 venture, which aims to open between 400 and 500 stores under each of the Merrell and Saucony brands in China in five years.

“The group hopes to adopt a multi-brand strategy to meet the needs of consumers of different market segments,” said the company’s chairman and chief executive officer Ding Shui Po, during a press conference in Hong Kong.

Like its bigger competitor Anta, based in Fujian’s Jinjiang city, Xtep is on a shopping spree for overseas marques to raise its own brand cache and go upmarket, in a journey to distinguish themselves from the horde of cheap shoemakers in China. Anta in December led a consortium of investors in a US$5.2 billion acquisition of Amer Sports, whose portfolio of brands includes Wilson, Salomon, Mavic and Suunto.

Saucony’s Virrata running shoe, as of 9 April 2013. Photo: SCMP

Anta, which is 11 times bigger in market value and five times larger in revenue than Xtep, is headed by Ding Shizhong. The two billionaire entrepreneurs are not related, although both were reportedly school mates in Jinjiang, known as China’s shoe capital.

Xtep’s partnership with Wolverine, based in Rockford, Michigan, will help launch Merrell and Saucony in China, where they have been beyond the reach of outdoor hikers and runners. The venture will also enlarge the sales footprint for the two brands in Hong Kong and Macau, including sports apparel and accessories.