by The Editors on November 18, 2008
Today at 1:30 PM PST Pacific Sunwear’s CEO Sally Frame Kasaks and CFO Michael Henry spent a little over 40 minutes answering analyst’s questions. It sounded a lot like good news for people who like bad news. Here are some highlights from the call:
- Juniors sales up 16 percent in the quarter driven primarily by their house brand Bullhead denim and tops.
- Young men’s sales saw a slight decline in denim and tops
- Branded goods represent 71 percent of total sales.
- The company continues to review fashion brands by their collections and no one is a done deal. “I’m not sure I want to refer to any of our brands as tried and true,” Kasaks said.
- Accessory sales were down 28 percent, but they hope to better manage the category to about 15 percent of sales rolling forward
- Inventory are high and the company will be going very promotional in Q4. Sally Kasaks said the company would “aggressively clear inventory while holiday traffic is available to us.. . . We may have bought too much this year, and I will take full responsiblity for that. On the other hand I think we have done a good job managing the new brands.”
- Approximately 100 of the 940 stores are not profitable, 24 are cashflow negative
- PacSun has said all along that they would be closing 30-40 stores a year as part of normal business. They see no reason to close a larger number of stores this year, mostly because getting out of leases is costly and could take up to two years.
- Footwear down to 4 percent of the business; will be 3 percent by the end of the year
- Capital expenditures for 2009 will be cut by over 50 percent to $30 million total.
- The e-commerce business growth is outpacing the retail store environment so “we will continue to fund that.”
- Michael Henry says they are planning for the market to remain tough for the foreseeable future.
Guess we’ll know tomorrow how the market reacts in the stocks that are listed in the upper right hand corner of the site. It doesn’t sound good. To read a transcript of the entire call click here.
by The Editors on November 18, 2008
Today at 1:30 PM PST Pac Sun will hold a conference call to discuss what will probably be one of their worst quarters ever (we’re just guessing here).
The call will be open to all interested investors through a live audio Web broadcast at Pacific Sunwear’s investor relations Web site. A telephonic replay of the conference call will be available, beginning approximately two hours following the call, for one week and can be accessed in the United States/Canada at (800) 642-1687 or internationally at (706) 645-9291; pass code: 72074140.
Dial up and get a first hand view of how the macroeconomic conditions are crushing teen clothing sales.
[Link: MarketWatch]
by The Editors on November 17, 2008
Is Quiksilver’s stock price really going to drop below the one buck line today? Because with twenty minutes to go it’s hovering at $1.25. But it got an immediate 18 cent bounce in after hours trading. . . wonder what’s up?
[Link: Yahoo Finance]
by The Editors on November 13, 2008
We’ll see next week how PacSun and Zumiez did when they report third quarter numbers, but Urban Outfitters is showing that all is not dead in the teen clothing sector. They reported “record third-quarter earnings of $59 million, a 31 percent gain.”
The company cited higher profit margins and a tight control of sales-and-administrative expenses. Going into the key holiday-shopping season, the company said it has maintained “rigorous management of inventory and expenses.” In the recent quarter, tighter control of inventory meant fewer items marked down for discount sale.
Yeah, we’re doing well because they think they are geniuses. Maybe.
[Link: BizJournals]
by The Editors on November 13, 2008
Looks like Bob McKnight and the boys at Quiksilver have finally dumped Rossignol off on Chartreuse & Mont Blanc for EU30 million in cash and a EU10 million note, according to Forbes. As we mentioned before, it’s way less than originally planned, but at least they’re out.
“The completion of this sale represents the culmination of our efforts to eliminate our exposure to hardgoods manufacturing,” Chief Executive Robert McKnight Jr., said in a statement. “We’re delighted that we can now return to our roots, do what we do best and once again fully concentrate our efforts on our core apparel and footwear brands Quiksilver, Roxy and DC.”
And it looks like that is going to take an awesome amount of concentration.
[Link: Forbes]
by The Editors on November 12, 2008
Tony Hawk has endorsed a lot of things: roller coasters, BMX bikes, and video cameras. Now we can add chewable vitamins to the list with the release of Tony Hawk HuckJam Gummies the “multi-vitamin for teens.”
These chewy “gummy” vitamins, shaped like miniature skateboard decks, skateboard wheels and Tony’s signature hawk skull, provide a good source of 11 vitamins and minerals, including Vitamin C, which bolsters the immune system*, and Vitamin B-12, a major factor in energy metabolism*.
Remember to take a couple of these after eating at McDonalds. You’ll need them.
[Link: PR Web]
by The Editors on November 11, 2008
When the board of Orange 21, the publicly traded company that is Spy Optic, denied a request by No Fear Retail to merge businesses we thought this would be over.
Now No Fear Retail has sent another letter outlining why it thinks the board is doing Orange 21 shareholders a disservice by not considering the deal. Here’s a piece of it:
Frankly, we have been surprised by the manner in which the process has been handled to date, given the Board’s fiduciary responsibilities to act in the best interests of Orange 21’s stockholders. No rationale was provided in the Company’s November 4th 8-K filing for the Board’s decision to not pursue negotiations nor was any rationale communicated directly to No Fear Retail. This lack of communication is especially disappointing given the fact that No Fear Retail is one of Orange 21’s largest customers. We hope the Board will reconsider our proposal and enter into meaningful negotiations regarding a merger of the two entities for the benefit of Orange 21’s stockholders. Time is critical in the current climate and, given our understanding and historical involvement in the business, we stand ready to move quickly to negotiate and close a transaction.”
[Link: Market Watch]
by The Editors on November 10, 2008
The New York Times Dealbook blog made mention of Quiksilver today with the following:
One small deal that may be in the works would be the sale of Quiksilver, a maker of surfer-style clothing, to Nike or another strategic acquirer. Quicksilver [sic] has retained Morgan Stanley to advise on its strategic alternatives.
And seeing as Quik’s stock closed well below the $2 mark again today it could be a good deal, as long as Nike doesn’t mind buying over a billion in debt.
[Link: Deal Book]
by The Editors on November 10, 2008
For more than a year there has been talk about Spy Optic’s co-founder Mark Simo’s plan (and then denied plan) to merge his privately held No Fear retail business with Orange 21, the publicly traded company that owns Spy Optics. All along we thought it seemed like an odd strategy.
Now, in Jeff Harbaugh’s latest Market Watch column on TransWorld Business he looks into the details of the this situation and comes away with a similar, though much more informed, analysis.
This request to negotiate a deal, which didn’t have a clearly identified strategic rationale and requires financing that apparently isn’t in place had potential to be very distracting at a time when Orange 21 is busy just running its business in a difficult economy. Making the letter public didn’t help, and you have to wonder what Spy Optics’ customers think about it.
Exactly.
[Link: Transworld Business]
by The Editors on November 7, 2008
Say what you will about Adrenalina CEO Jeffrey Geller, but by blending bi-lingual marketing, in-store FlowRiders, and sideshow carnival showmanship Geller is creating the Cabela’s of boardsports stores.
The new 12,000 square foot store, which is having its grand opening tomorrow November 8, 2008, is in the International Plaza Mall in Tampa, Florida and features both the FlowRider and a juice bar.
As we continue with our retail expansion strategy, we are thrilled to bring the Adrenalina experience to the Tampa area,” commented President and COO Jeffrey Geller. “In addition to the FlowRider, the larger retail space allows us to add an even greater selection of top brands, such as Billabong, Volcom, Quiksilver, Zoo York, O’Neil, and Ed Hardy, giving the consumer the ultimate extreme sports experience.”
All the PacSun posing aside, something must be working.
[Link: MarketWatch]
