Mercury

4050 SEPTEMBER 18, 2009 TIMOTHY A. LUEHRMAN JOEL L. HEILPRIN hectogram Athletic footgear: Valuing the Opportunity In March 2007, John Liedtke, the head of business development for alive(p) Gear, Inc., a privately held footwear company, was contemplating an acquisition opportunity. West lantern slide Fashions, Inc. (WCF), a large designer and marketer of mens and womens branded apparel had recently announced plans for a strategic reorganization. The plan called for a divestiture of certain non-core assets and a regenerate focus on WCFs higher-end business, business- effortless, and formal-wear apparel businesses. One of the divisions WCF think to shed was Mercury Athletic, its footwear division. Liedtke knew that acquiring Mercury would or so double Active Gears revenue, increase its leverage with contract manufacturers, and expand its presence with key retailers and distributors. He in any case expected that Active Gears bankers would quickly attack the company about a possible bid for Mercury; consequently, he wanted to complete his own rough valuation of the opportunity before hearing the bankers pitch. Athletic and Casual Footwear Industry Footwear was a mature, highly competitive industry marked by low growth, but fairly stable value margins.

Despite the industrys overall stability, the performance of undivided firms could be quite volatile as they vied with one other to anticipate and exploit fashion trends. The market for athletic and casual shoes remained fragmented, despite the presence of a small twist of global footwear brands. In the casual segment, companies competed on the root of style, price, and general quality. In the athletic segment, competition revolved close to brand image, specialized engineering for performance, and price. Within the fashion-sensitive part of the industry, result lifecycles tended to be short, sometimes lasting only a season. Consequently, diligent management of inventory and production lead times were unfavorable success... If you want to get a full essay, order it on our website: Ordercustompaper.com

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