by The Editors on January 5, 2009
In a story titled 5 Cash-Rich Companies Being Given Away Motley Fool writer Morgan Housel says Volcom may be one of the stocks that Warren Buffet refers to as “a one-foot bar I can step over.”
Is retail dead yet? As a whole, perhaps, but that doesn’t mean there aren’t some stores that stand out from the pack. Volcom might be one of them. While other apparel veterans like Quiksilver (NYSE: ZQK) and retailers like Macy’s (NYSE: M) are saddled with long-term debt, Volcom has kept its balance sheet spotless. . . . But with a bulletproof balance sheet and a well-known, powerful brand name, the main catalysts that typically shove recession-prone industries into the graveyard are nowhere to be seen with Volcom.
Apparently, being a millionaire is that easy.
[Link: The Motley Fool]
by The Editors on January 5, 2009
The entire energy drink market has blown up right under Gatorade’s oblivious nose and the only time they ever seemed to take notice was when Salman Agah attempted to launch and market Skaterade.
Now it appears that someone has kicked the sports drink company in the nuts because they’re diving in on action sports like bums on a bottle, according to a story in Sports Business Journal.
The brand signed a multiyear deal with [Chaz] Ortiz that sources valued in the low to mid-six figures annually. He will be the cornerstone of Gatorade’s action sports campaign and will be featured alongside its marquee athletes, including Derek Jeter, Dwyane Wade and Peyton Manning. . . . The brand also signed smaller deals with snowboarder Ellery Hollingsworth, a 17-year-old from Darien, Conn., and BMX star Nigel Sylvester, an 18-year-old from Queens, N.Y. The athletes will be featured in Gatorade’s action sports campaigns, which are being planned. Terms of those deals were not available.
That fact that Gatorade never had any bull balls or caffeine in it always made it a favorite around here anyway. And for Chaz, the “mid-six figures” shouldn’t be so bad.
[Link: Sports Business Journal via Skatedaily.net]
by The Editors on January 2, 2009
Jesse Huffman writes up another great snowboarding story for The New York Times. This one, on who snowboard companies are jumping on the “green manufacturing” movement.
More snowboard makers than ever, from grass-roots innovators like Mervin in Sequim, Wash., to multinational companies like Burton, are offering green or eco-friendly boards this ski season. And the trend is just beginning. Boards made with sustainable materials account for just 2 percent of the $140 million board market, according to Snowsports Industries America, a trade group.
Those quoted include: Burton’s Todd King, Salomon’s Alex Warburton, Arbor’s Bob Carlson, K2’s Doug Sanders, Mike Basich and Mervin’s Pete Saari (pictured right). Cleaner is better and if it help sells, great.
[Link: The New York Times]
by The Editors on December 26, 2008
In May, 2008 ESPN sued Quiksilver for copyright infringement on the letter “X,” then a month later Quiksilver sued ESPN for the same thing claiming they had been using the X since 1994. Now, according to a story in the LA Times ESPN has settled the lawsuit with Quiksilver.
Walt Disney Co.’s ESPN network settled a lawsuit by clothing maker Quiksilver Inc. over the cable channel’s logo for the international X Games competition. . . . The companies didn’t disclose the details of the settlement in papers filed jointly Monday in federal court in New York.
Wonder if the settlement included any “free advertising?”
[Link: LA Times]
by The Editors on December 22, 2008
In a letter to Stone Douglass, Chairman of Orange 21 dated December 16, 2008, and recently filed with the SEC, Spy Optic and No Fear founder Mark Simo announced his resignation from the board of directors of the company. It appears to be mostly over the Orange 21 board’s rejection of Simo’s repeated attempts to get the company to buy (or merge with) No Fear’s retail business.
I am convinced, as much as I ever have been, that real opportunities exist for enhancing shareholder value while at the same time doing right by the company’s employees and business partners. I believe that, in this radically changing environment, the merger I have proposed with No Fear Retail Stores offers the best opportunity to achieve those goals. There may be other options that the board also should consider, but the one thing this company cannot afford is to do nothing. That, unfortunately, is the course this board has chosen to take.
We’re going to guess that this came neither as a surprise nor a disappointment to the Orange 21 board. But that’s just a guess.
[Link: Edgar Online]
by The Editors on December 22, 2008
Bob McKnight, Joe Scirocco, Bruce Thomas, and Marty Samuels covered a lot of ground in last week’s conference call, but there was one topic that they didn’t go over: the rumor that Quiksilver is actively negotiating the sale of DC Shoes.
This rumor has gained momentum lately most likely because the deal seems to make sense. On the conference call DC was repeatedly spoken of as a bright spot in Quiksilver’s brand portfolio. If Quik could unload DC Shoes for somewhere in the $700 million range, that would go a long way toward covering the company’s $1 billion debt. It would also allow Quiksilver to get back to basics with its core business after spending a couple years running the whole expansion thing into the ground. Not to mention it being a relief to many DC employees who believe all their hard work is being blown by bad business decision at the mothership. It probably wouldn’t hurt the company’s stock price, either.
So far no “official word” on the sale.
by The Editors on December 22, 2008
Camp Woodward has signed a licensing and consulting agreement with the Chinese government to help develop the next wave of Chinese action sports automatons as they create their “first international camp in Beijing next summer.”
Woodward Camp President Gary Ream is obviously looking forward to monetizing China’s billions.
[Link: Sports Business Journal]
by The Editors on December 21, 2008
Back in the early 80s Rainbow Sandals were the only flips any self-respecting surfer would wear. And now, almost 40 years later founder Sparky Longley is still living the dream and bringing in $12 million in profits on $37 million in sales. Not bad for a guy who still “depends on word of mouth” and a few ads in The Surfer’s Journal to spread the Rainbow message.
The LA Times rus a whole background check on the company and man and we can’t think of anyone who has done the action sports business thing more smoothly than Sparky. Click the link to check it out.
[Link: LA Times]
by The Editors on December 19, 2008
Ogio President David Wunderli announced today that Mark Kuryak, the former VP of hockey at Easton Bell will be the new VP Global Action/Professional/Sport.
We’ve always had the long-term vision of making OGIO the gear bag maker of choice for all categories of sports,” Wunderli explains. “Mark has proven expertise in elevating sales, service and distribution to the level that innovative products warrant. We’re excited to unleash his skills on what we know to be the category with our highest growth potential.
Motocross, snow, skate, and surf go hand in hand with hockey, right? [click to continue…]
by The Editors on December 18, 2008
Looks like we should have jumped in on the $.80 Quiksilver share prices several weeks ago because Quiksilver is fighting its way through some rough times. In their conference call today with analysts they stated that they doing well, but still have a ways to go.
Consolidated net revenues for the fourth quarter of fiscal 2008 increased 3% to $606.9 million compared to $587.3 million in the fourth quarter of fiscal 2007. . . . Consolidated net revenues for the full year of fiscal 2008 increased 11% to $2.26 billion compared to $2.05 billion in fiscal 2007. . . . European net revenues increased 16% during the full year of fiscal 2008 to $933.1 million and were up 4% in local currency.
Bob McKnight says:
I am proud of the efforts of the entire Quiksilver team around the world as we fought through a deteriorating global economy to deliver financial results that were consistent with the outlook we provided 6 months ago. As economic conditions continue to worsen in our key markets in the US and in Europe, we’ve continued our efforts to reduce expenses and capital expenditures, to carefully control inventory and to reconfigure our post-Rossignol capital structure.”
Notes from the conference call:
- Europe has been doing extremely well for the company.
- The DC footwear business has been “quite strong.”
- Sales will be down in the low double digits for the first quarter of 09
- Expecting a revenue decline in the high single to low double digits for 2009
- Every five cent swing in the Euro translates into $30 million in sales.
- Quik will open “very few new stores” in 2009. “Two in the US and maybe 2 or 3 in Asia Pacific and a couple in Europe”
- The company is looking to 25 retail stores. Nine will close in 2009; 21 of the stores are in the US, 12 are full-price stores and 41 percent of those are in California, Arizona, Florida.
- Quiksilver’s top 30 customers worldwide do less than 25 percent of the company’s sales.
- Capital expenditures for the coming year will be cut approximately $34 million from $94 million to $60 million.
- They are looking at every area of expenditure and trying to adjust to a new reality as to the projected 2009 revenue.
- Company debt still in the $1 billion range
- In 2009 there will be $70 million in interest expense
- The company also has a $55 million loan, which CFO Joe Scirocco called “the big one” is due on March 14, 2009
The Street appeared happy with the report as the stock rose 10% in after-hours trading.
For the whole press release, follow the jump, or click here for a transcript, or listen to the whole call right here.
[click to continue…]
In a story titled 5 Cash-Rich Companies Being Given Away Motley Fool writer Morgan Housel says Volcom may be one of the stocks that Warren Buffet refers to as “a one-foot bar I can step over.”
