by The Editors on December 10, 2008
Tom Kennedy, the guy responsible for PacSun’s merchandising, design, and marketing has apparently left the company to “pursue other interests,” according to a story on Women’s Wear Daily.
His duties will be reassigned to other members of the management team. . . . In a statement, Pacific Sunwear’s chairman and chief executive Sally Frame Kasaks, said: “We very much appreciate Tom’s contributions to the business during his tenure, and wish him the best in his future endeavors.”
According to sources at the company this departure will have absolutely no effect on PacSun’s core marketing efforts.
[Link: WWD Business]
by The Editors on December 5, 2008
Manchester, Vermont’s snow, skate shop Podium was burglarized sometime in the evening of November 30, 2008 according to a story in the Bennington Banner.
Numerous Burton snowboards, snowboarding apparel and accessories were taken from the Main Street store between 9:30 p.m. Monday and 11:50 a.m. Tuesday, according to Manchester Police.
Times are hard and Christmas is coming.
[Link: Bennington Banner]
by The Editors on November 26, 2008
Australia’s former Brother Neilsen retail chain apparently owes Billabong International AUS$674,000 and the company wants to get paid. That’s apparently why Billabong’s subsidiary GSM Operations is taking them to court, according to Goldcoast.com.au.
GSM Operations has filed a statement of claim in the Queensland Supreme Court seeking damages from Paul Neilsen and Ahmed El Safty, along with an associate of Mr El Safty, John Hassan. . . .The debt is alleged to have been accrued by Brothers Neilsen between November last year and May this year.
What else can manufacturers do if a retailer has a going-out-of-business fire sale on product that they haven’t even paid for.
[Link: Goldcoast.com.au]
by The Editors on November 26, 2008
Nothing shows a CEO’s commitment to a bright and glorious future like buying stock on themselves. That’s what PacSun’s Chairman/CEO Sally Frame Kasaks just did, according to a story on StreetInsider.com:
After the close, Chairman/CEO Sally Frame Kasaks disclosed a purchase of 200,000 shares on 11/24 at prices from $1.10-$1.14, bringing her stake to 390,000 shares. In addition, Director Grace Nichols bought 10,000 shares on 11/24 at $1.13, encompassing her entire stake.
If we were interested in owning stock in the retail sector, this might be an interesting cue, or just a last ditch effort by a CEO attempting to boost her company’s stock price. On Wall Street you never know.
[Link: StreetInsider]
by The Editors on November 25, 2008
The Extreme Group just bought up the UK’s online action sports retailer UrbanSurfer.co.uk adding a decidedly stylish well-designed property to their already turbo extreme business.
Al Gosling, chief executive officer for the Extreme Group, said UrbanSufer.co.uk is another win for Extreme and adds to the extensive portfolio of products and experiences the company already offers consumers. . . “We are continually looking for ways we can further enhance and spread the core messages of Extreme and this website was the perfect fit. At Extreme we live by the philosophy of passion, vision, freedom and irreverence; this is radiated through everything we do, and now UrbanSurfer will be included in that mix,” he said.
Who said the word “extreme” would kill an action sports business?
[Link: Fashion United]
by The Editors on November 24, 2008
Lately we’ve been sitting in on quarterly conference calls and at first when we heard that the market was “getting extremely promotional” we didn’t know exactly what they were talking about.
Then, last week, week when PacSun’s CEO Sally Frame Kasaks said they were going “aggressively clear inventory while holiday traffic is available,” we began to understand.
Looks like PacSun isn’t the only one. Here is a perfect example of what we’re calling “extremely promotional” on a flyer someone sent us from SoCal’s 10 store retailer Sun Diego.
President Dave Nash is not fooling around. On the biggest shopping weekend of the year, his crews are knocking prices down by 20 to 50 percent. Notice the extra savings? Shoppers who get to the store between 7 and 9 AM on Black Friday get an extra 10 percent off on the the low end.
Happy Holidays.
by The Editors on November 21, 2008
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]
by The Editors on November 20, 2008
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
- October had the worst monthly comps in the company’s history.
- Footwear was the strongest segment, apparel was the worst, and skate hard goods are seeing “tough comps.”
- Third quarter gross margins were down 200 basis points driven almost entirely by apparel since the June when everything got promotional.
- New stores (07-08) have been performing at about 65 percent as compared to established stores.
- Company is targeting opening 58 new stores, only 20 percent of them are in the “housing states” and no new stores in Nevada or Florida.
- Snow goods are off to a slow start. Rick Brooks said “We are concerned about the market for snow hardgoods. We’re working very closely with our suppliers. We’re also going to be more aggressive from the price perspective and trying to move the product out the door.
- The company has lowered its costs across the board and stock and performance based incentives are a large part of that.
- Customers continue to drive the brand selection and the business. “Again, our approach is to do what our customers tell us to do,” Brooks said. “The customers are who drive that for us. If the custermers demand more then we will buy more.”
- Zumiez remains dedicated to its small vendors. “In most cases we are our small vendors biggest customers,” Brooks said. “If we have cash then we are a big driver of their liquidity.”
- Zumiez is brand diverse so any problems at some of the larger action sports apparel companies won’t have much affect on them. “Our largest single brand only represents 7 percent of our sales,” Lang said “But we are not so confined to a certain vendor that if one were to go away it would not hurt us.”
- One of Zumiez goals is to get clean on inventory by the end of the year and they feel they have been conservative enough this year to do that.
- The company is still investing in their IT organization and in their ecommerce business because that is an area in which Zumiez continues to see growth.
- There are plans to get very promotional in Q4 however they are not going to simply put everything on sale. “Our promotions are based on a very fine category brand analysis and very focused on how we attach promotions.
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.
by The Editors on November 20, 2008
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]
by The Editors on November 20, 2008
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]
