Last week Spy announced (in forms filed with the SEC) that they were cutting 20 employees and ending their direct sales in Europe and moving back to a distributor model. What does this all mean exactly? We’re not sure and neither is Jeff Harbaugh, but that hasn’t stopped him from discussing what he think about it on his Market Watch website.
I feel strongly both ways about what Spy is doing. On the one hand, the balance sheet and cash run rate certainly seems to require expense reduction. On the other hand, their strategy has been to invest in the brand to get revenues to a level that could support the required marketing effort. For all the progress Spy has made in increasing brand sales, it looks like somebody think it hasn’t happened fast enough to justify the continuing required cash investment.
For the rest of Harbaugh’s thought, click the link.
[Link: Market Watch]
