Mercury Athletic Footwear Essay examples

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Mercury Athletic Case Nicholas Thebeau, Student ID 50927830 Presented to: Professor Kevin Wall West Coast Fashions, Inc. (WCF), a large designer and marketer of men’s and women’s branded apparel recently announced plans for a strategic reorganization. Active Gear, Inc. (AG), a privately held footwear company, was contemplating an acquisition opportunity. John Liedtke, the head of business development for AG, was interested in a WCF subsidiary. The subsidiary that Liedtke and AG intended to acquire was Mercury Athletic (MA), a footwear company. Liedtke thought acquiring Mercury would roughly double AG’s revenue, increase its leverage with contract manufacturers and expand its presence with key retailers and distributors. In order to…show more content…
AG’s distribution channels consisted of independent retailers, departmental stores, and wholesalers. AG excluded big box retailers and discount stores. AG focused on products that didn’t follow fashion trends, resulting in a lengthened product lifecycle. This business model led to more efficient and effective supply chain and operating management. However, because they opted for the safe route it halted the company’s sales and growth opportunity. Mercury Athletic Mercury Athletic was purchased by WCF from its founder Daniel Fiore. Fiore was forced to sell the company after running it for over 35 years, due to health problems. Due to a strategic reorganization, the plan called for the divestiture of MA and other “non-core” WCF assets. MA had revenues of $431.1M and an EBITDA of $51.8M Products were distributed to departmental and discount stores It had two product lines- athletic and casual footwear Target market of both men and women Shoes popularity grew in the extreme sports market MA developed an operating infrastructure, allowing management to quickly adapt to changes in customer tastes with product specifications. 1. Is Mercury an appropriate target for AG? Why or why not? Let me walk you through some qualitative considerations before making my recommendation. Strategic considerations: AG and MA are both competing in the athletic and casual footwear industry. Acquiring MA could lead to economies of scale and scope through manufacturing and
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