Essay on Mercury Athletic Footwear: Valuing the Opportunity
SEPTEMBER 18, 2009
TIMOTHY A. LUEHRMAN
JOEL L. HEILPRIN
Mercury Athletic Footwear:
Valuing the Opportunity
In March 2007, John Liedtke, the head of business development for Active Gear, Inc., a privately held footwear company, was contemplating an acquisition opportunity. West Coast Fashions, Inc.
(WCF), a large designer and marketer of men’s and women’s branded apparel had recently announced plans for a strategic reorganization. The plan called for a divestiture of certain non-core assets and a renewed focus on WCF’s higher-end business, business-casual, and formal-wear apparel businesses. One of the divisions WCF intended to shed was Mercury Athletic, its footwear division.
Liedtke knew that acquiring Mercury would …show more content…
Japan. Sales outside the United States were made through a network of wholesalers, which the company still employed in 2007.
Beginning in the 1970s, Active Gear moved into casual and recreational footwear aimed at what had become its core customer demographic: affluent urban and suburban family members aged 25 to
45. AGI was among the first companies to offer fashionable walking, hiking, and boating footwear.
By the early 1980s, the Active Gear brand and logo were associated with a lifestyle that was prosperous, active, and fashion-conscious.
After years of steady if unspectacular growth, AGI’s 2006 revenue and operating income were
$470.3 million and $60.4 million, respectively, with 42% of revenue from athletic shoes and the balance from casual footwear. [Historical income statements and balance sheets for AGI