According to a story on News.com.au Quiksilver has “shed Australia-wide surfing sponsorships to tighten its belt.”
It has ended its sponsorship of state junior championships in Australia and Quiksilver’s female surfwear firm Roxy also has dumped its World Qualifying Series tournament in Victoria.
The Quiksilver Pro at Snapper is still on, however. Things are bad, but they’re not that bad, yet.
[Link: News.com.au]
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On the conference call earlier this week analysts asked several times what the hold up was with the sale of PacSun’s Anaheim, California distribution center and it was obvious that many were worried that something had gone south on the deal. CFO Michael Henry assured everyone that the deal was underway. And he was telling the truth. Today they closed the sale.
The Company has received net cash proceeds of $24.5 million from the transaction. The Company expects to record an after-tax gain of approximately $0.10 per diluted share from the transaction in the fourth quarter of 2008.
This deal not falling through should help assauge the sting that Christmas and Q4 bring.
[Link: MarketWatch]
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We all know how well it worked in the skate market so now snowboarders Brandon Bybee, Rob Foy, Jason Murphy, and Benson Miller are bringing blanks to snowboarding with a new anti-brand called Blank Snowboards.
We are on a mission to take snowboarding back from corporate America by making snowboarding affordable without compromising the quality. We were there before snowboarding became what it is today: mainstream, unaffordable, and all about the hype. We want to give back to the sport that has given us so many memories, friendships, and great “sick” days by providing the best product at the correct price. We have found that by cutting out all the unnecessary costs (ie: retailers, graphics, and high-paid riders) we can provide the best decks in the industry for ½ the price of any comparable board. We are about the sport not the hype. We are the traditionalists not the trend.
Never quite seen retailers called out as “unnecessary costs” before, but it makes sense. And getting a snowboard for less than 200 bucks does make paying $500 to ride a logo emblazoned billboard seem kind of foolish. Wonder if the major snowboard labels will band together and pressure Transworld Business into creating a special advertorial supplement next fall to help educate the market about how blank snowboards are killing the entire industry?
[Link: Blank Snowboards via The Spectrum]
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Some people like to give Zumiez grief for being “mall” stores, but when you compare their conference calls with those of some of their competitors what comes through is a surprisingly core attitude about the stores, the brands, and the customers. After the prepared statements Zumiez CEO Rick Brooks and CFO Trevor Lang answered questions and here are some of the highlights
The most impressive thing about all of this is the way that Brooks and Lang appear to be all over the current market conditions and appear to have done everything they could to prepare for what everyone knows is going to be a bad quarter. The thing that keeps us optimistic on Zumiez is the fact that they’re still running with absolutely no debt.
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Action sports mall retailer Zumiez announced their Q3 results today and they weren’t as bad as they could have been.
Total net sales for the third quarter (13 weeks) ended November 1, 2008 increased by 7.9% to $112.2 million from $104.0 million reported in the third quarter ended November 3, 2007 (13 weeks). The company posted net income for the quarter of $6.8 million or $0.23 per diluted share versus $8.1 million or $0.28 per diluted share in the third quarter of the prior fiscal year. Comparable store sales decreased 5.8% for the third quarter of fiscal 2008 compared to a 13.2% increase in the third quarter of fiscal 2007.
According to CEO Rick Brooks, however, “October was the worst montly comp in the company’s history.” The economically hard hit “housing states” are where Zumiez have half their stores and while skate hardgood sales were strong in the first six month, they fell off in the third quarter and the clothing part of the business was hit extremely hard.
Zumiez has seen a slow start on the snow product front. But they say they are committed to finish off the year “clean” on inventory by getting all promotional in Q4 a.k.a. putting things on sale.
[Link: MarketWatch]
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Helmet maker Giro is looking into leaving its current location in Santa Cruz for a new larger location in Scotts Valley, California, according to a story in the San Jose Mercury News.
Giro, a division of Easton-Bell Sports with other offices in Los Angeles, Dallas and Chicago, has outgrown the 30,000-square-foot building it has occupied in the Harvey West business park since 1994, and will ask the company’s board of directors to approve the move in December, according to Kwai Kong, Giro’s president of specialty retail business.
Not bad when the city of Scotts Valley is throwing in $75,000 in “redevelopment funds” to help them move.
[Link: San Jose Mercury News]
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Moody’s Investors Service downgraded Quiksilver’s stock on Wednesday thanks to what it calls “a ‘significant’ level of short-term debt in its capital structure, according to a story on Yahoo Business.
Moody’s downgraded the company’s corporate family rating and probability of default rating two notches to “B2” — a speculative or “junk bond” rating five notches below investment-grade status — from “Ba3,” which is three notches below investment-grade status.
The stock has been down to 91 cents this morning, but it’s back up just over a dollar.
[Link: Yahoo Business]
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It’s that third quarter financial results time of year and Zumiez will be spilling it all for the analysts on their conference call today, November 20, 2008. This should be a good one. Let’s just hope it goes better than the PacSun call on Tuesday. Click here to listen live online: http://ir.zumiez.com.
[Link: BusinessWire]
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Those with a stomach for SEC filings should bump on over to EDGAR and check out Quiksilver’s 8K filing relating to their sale of Rossignol to Chartreuse et Mont Blanc LLC. The most interesting piece of info we stumbled onto was that selling Rossignol is going to cost Quiksilver $14.7 million.
Transaction costs: $ 9.9 million. Employee-related costs: $ 1.8 million. Other costs: $ 3.0 million. Total costs before taxes: $14.7 million.
That kind of eats into the $40 million Chartreuse et Mont Blanc paid. We didn’t know selling something could be so expense. Quik stock closed down today at $1.04.
[Link: Edgar Online]
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In May, 2008 Walt Disney’s ESPN sued Quiksilver for copyright infringement on the use of the letter “X” in Quik’s Generation X line of clothing.
Then a month later Quiksilver sued ESPN saying they had been using the X since 1994 (two years before ESPN began using the letter for its X Games).
Now a federal judge in New York has ruled that ESPN must face allegations.
The emblem for ESPN’s extreme-sports franchise is “strikingly similar” to the stylized X used by Quiksilver in the Gen X line of clothing, U.S. District Judge Colleen McMahon said in a Friday ruling in New York. . . “Quiksilver thoroughly laid out its long history of many types of X usage,” McMahon said, rejecting ESPN’s bid to dismiss the claims. “Quiksilver has also adequately pled that ESPN’s use of the X mark is likely to cause consumer confusion.”
We kind of hope Quiksilver makes the mouse pay through the nose. They could use some cash right now.
[Link: Los Angeles Times]
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