by The Editors on September 2, 2008
For those in foreign countries, it’s a nice way to do business: set up the distribution of your favorite brand, get it rolling, and then sell it back to the brand. For the brand it’s a relatively cheap way to expand into foreign markets (with much less risk). That’s what Volcom just did with their Japanese distributor.
This acquisition is a testament to the strength of our brand in Japan after working with our distributor for more than 15 years,” says Richard Woolcott, chairman and CEO of Volcom. “We are excited to culminate a longstanding relationship with an opportunity to work more closely with our accounts in this important territory, while retaining our Japan-based distribution team.”
When it works out nicely, it’s amazing.
[Link: OC Metro]
by The Editors on August 29, 2008
The Orange County Business Journal has picked up the story about Quiksilver finding a buyer for Rossignol. Not much new in this story other than two interesting numbers:
Shares of Quiksilver were down nearly 4% near the close of trading Friday with a market value of $990 million.
And this one:
After fees, Quiksilver is expected to see about $100 million in proceeds from the sale, according to Kummetz. . . That stands to have a small impact on the company’s projected debt of $1.1 billion at the end of its fiscal year in October, the analyst said.
So, in layman’s terms: by the end of October Quiksilver will have more debt than market value to the tune of $110 million. We’re not analysts, but that doesn’t sound good.
[Link: Orange County Business Journal]
by The Editors on August 28, 2008
Each time there are an Olympics, Oakley sends out the press release saying exactly how many of the medals were won by their sponsored athletes. In Beijing it was 88. If Oakley would have been a country they would have lined up right behind the the USA and China, and just ahead of Russia who won 72 medals.
We couldn’t be more proud of the countless athletes from around the world that chose to use Oakley sunglasses as a critical piece of their performance equipment,” said Scott Bowers, senior vice president of global marketing and brand development, Oakley. “We developed High Definition Optics (HDO) to meet the demands of our athletes and there is no greater compliment than to see them earn their place among the world’s greatest.”
Actually, Scott, they weren’t “countless” as the same press release says “more than 600,” but either way, it was great coverage for the O.
[Link: Earth Times]
by The Editors on August 28, 2008
As if the Stop The Toll Road campaign could get any weirder, now the Los Angeles/Orange Counties Building and Construction Trades Council is charging that the Surf Industry Manufacturers Association is spreading untruths about the project and that “the lies being perpetrated by the opponents to this project are costing the region hundreds of jobs at a time when the economy is already in peril.”
R 241 opponents, specifically the Surfrider Foundation and the Sierra Club’s Friends of the Foothills, are using SIMA resources to repeatedly assert false claims that the toll road will cause the closure of the San Mateo campground and damage the surf break at Trestles,” said Trades Council Executive Secretary Richard Slawson. “Their assertions are nonsense. Even a noted researcher at Scripps Institution of Oceanography has studied the project and determined that it will have no impact on surfing or wave formation. . . . According to the LA/OC CBCTC, rather than helping the environment and protecting surfing locations, they are engaged in a smear campaign that manipulates and distorts the facts in an effort to stop a project that has been studied for more than 20 years, will bring much needed traffic relief to the region and provide hundreds of jobs for the local workforce.
The group is threatening a boycott of products by SIMA members Billabong, Hurley, Nixon, O’Neill, Quiksilver, Vans, and Volcom saying:
We value integrity in public debate and recognize differences of opinion. However, our members will not continue to support companies who knowingly sponsor groups who seek to lie or misinform the public.
We hate new roads no matter where they are going or what impact they have, but it is interesting to see how the other side is spinning it. For the entire letter follow the jump.
[Link: MarketWatch]
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by The Editors on August 27, 2008
The teen retail marketplace has been plummeting lately, and when PacSun announced their numbers last week Volcom got pulled down pretty hard. Now, Jeffrey P. Klinefelter of Piper Jaffray has written saying that Volcom management “remains confident that it’s bookings at major retailers are intact.”
We continue to recognize the strong authenticity of the brand as well as its solid execution in rolling out its new European strategy,” Klinefelter wrote.
Maybe that’s why the stock is up today.
[Link: Forbes.com]
by The Editors on August 27, 2008
It’s nice to know that all the mixed martial arts, freestyle motocross, and tattoo clothing companies won’t be skeezing up the isles of the fall ASR show, but how jacked up is it that there are now enough 909 brands to warrant not only their own magazine, but their own ASR-powered trade show September 5-6, 2008 at the San Diego Hard Rock Hotel called Virtue?
Here are some of the brands that will be showing (try not to laugh, ’cause they’ll kick your ass): Hitman, sinister, Extreme Pain, Punishment, Hostile, Contract Killers, and more.
The inked up, bad-ass, pornstar-dating thug crowd is no doubt huge, but to see it all marketed as fashion makes it look more like some new game show on Japanese television. Then again, we’ll never really understand what motivates people who live that far inland.
Either way, ASR show director Andy Tompkins is stoked:
Virtue has been met with a resounding enthusiasm on both the buyer and exhibitor front,” he says. “Many retailers have benefited by carrying this growing category, but don’t fully understand the market. Virtue will give an all-around look at the products and lifestyle, while also featuring seminars to help retailers to better understand how to make this category work for their businesses.”
And what about a seminar given by Jenna Jameson dating ultimate fighter Tito Ortiz titled “How to Stay In The Fight! MMA in the Marketplace?” We’re almost too scared to go.
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by The Editors on August 27, 2008
It appears that Quiksilver has found someone on whom to unload their flagging ski company Rossignol. The company is Chartreuse & Mont Blanc and it’s lead by Bruno Cercley a former CEO of Rossignol.
The proposed transaction is valued at EUR100 million, which comprise of EUR75 million in cash and a EUR25 million Seller’s Note. Quicksilver intends to use the net proceeds from the sale to repay existing indebtedness.
Chartreuse & Mont Blanc is mostly owned by Macquarie Group which also owns a minority interest in the Jarden Group (owners of K2 and Adio), according to a story on MarketWatch.
What a stunning business transaction this has been. Here are the numbers: They bought Rossignol in March of 2005 for $320 million. Then sold off the Cleveland Golf portion of the company in November of 2007, for $132.5 million. So, it looks like Quiksilver only lost about $30 million on the deal in a little under three years. Nice work.
[Link: RTT News and MarketWatch]
by The Editors on August 25, 2008
According to the Australian newspaper The Age, Billabong plans to open up shop in the heart of Russia.
Billabong plans to set up a flagship store in one of Moscow’s trendy shopping districts as a way to assert its dominance in the international youth-wear market. . . . Billabong is sold in over 100 countries including the Czech Republic, Hungary, Poland and Estonia, which makes up about 1% of global sales.
Which reminds us: “Every Russian, looking at Moscow, feels that she is a mother; every foreigner, looking at her and not knowing her maternal significance, must feel the feminine character of this city, and Napoleon felt it.”
[Link: The Age]
by The Editors on August 22, 2008
PacSun’s CEO Sally Frame Kasaks has won 24/7 Wall Street’s Overpaid CEO of the Day award for August 22, 2008 thanks to her total compensation last year of $3.2 million and the fact that the PacSun stock is off over 60 percent during the last year.
After posted flat revenue of $312 million for the last quarter, and operating income of only $3.7 million, Pacific Sunwear’s shares fell 31% today to just above $5. . . . Four firms downgraded PSUN today: Robert W. Baird, Friedman Billings, Roth Capital and BB&T Capital. The most significant cause of the ratings revisions was that the company dropped guidance for the third and fourth quarters.
Yet, as they point out: Kasaks salary remained the same.
[Link: 24/7 Wall St.]
by The Editors on August 22, 2008
PacSun shares opened down this morning after the company announced yesterday a “weak outlook that resulted in a series of investment downgrades,” according to Forbes.com. Not surprising, it also pulled down shares of Volcom down more than $2 by mid-morning.
Pacific Sunwear reported after the regular markets closed Thursday that it swung to a fiscal second-quarter loss from discontinued operations but offered downbeat profit projections for the third and fourth quarters amid a weakening economy. . . “The retail environment is extremely difficult and the primary root of (Pacific Sunwear’s) poor performance,” Mitch Kummetz, an analyst at Robert W. Baird & Co., wrote in a note released early Friday. “However, given the company’s revised back-half outlook, its strategy of refreshing stores and refining its merchandise mix isn’t making enough of a difference to warrant an Outperform rating anymore.”
We thinking we prefer the Zumiez strategy.
[Link: Forbes.com]
