by The Editors on August 29, 2008
The Orange County Business Journal has picked up the story about Quiksilver finding a buyer for Rossignol. Not much new in this story other than two interesting numbers:
Shares of Quiksilver were down nearly 4% near the close of trading Friday with a market value of $990 million.
And this one:
After fees, Quiksilver is expected to see about $100 million in proceeds from the sale, according to Kummetz. . . That stands to have a small impact on the company’s projected debt of $1.1 billion at the end of its fiscal year in October, the analyst said.
So, in layman’s terms: by the end of October Quiksilver will have more debt than market value to the tune of $110 million. We’re not analysts, but that doesn’t sound good.
[Link: Orange County Business Journal]
by The Editors on August 27, 2008
The teen retail marketplace has been plummeting lately, and when PacSun announced their numbers last week Volcom got pulled down pretty hard. Now, Jeffrey P. Klinefelter of Piper Jaffray has written saying that Volcom management “remains confident that it’s bookings at major retailers are intact.”
We continue to recognize the strong authenticity of the brand as well as its solid execution in rolling out its new European strategy,” Klinefelter wrote.
Maybe that’s why the stock is up today.
[Link: Forbes.com]
by The Editors on August 25, 2008
Burton Snowboards has teamed up with Vice Magazine for a new 10 episode video program on VBS.tv called Powder and Rails. Drug references sell, right?
The series will delve through the storied history of the sport with an emphasis on how it transformed from a novelty for yuppie two-plankers to something bored skateboarders did in the winter to one of the most anticipated events in the Olympic Games. This VBS series begins with the legendary Fall Line Films releases in the late ’80s, particularly The Western Front. The videos shifted the focus of snowboarding, inspiring a whole generation to forget about contests and focus more on tricks and mountain exploration. They also helped, plant the seeds for the proliferation of professional snowboarders over the next two decades.
Looks like a nice little retrospective that all the bitter old snow shreds will enjoy. Lots of Steve Graham, Jeff Brushie, and Snowboarder Magazine employees.
[Link: VBS.tv]
by The Editors on August 25, 2008
Olympic snowboarder Rosey Fletcher was riding in a truck with Peter Grunwaldt in her hometown of Girdwood, Alaska on Saturday August 23, 2008 when a bear ran right into the side of the truck. A nearby crowd of people were watching three bear cubs by the side of the road when the accident happened, according to a story in the Anchorage Daily News.
“It was a freak show,” Fletcher said Sunday. “The police and an ambulance show up, everybody’s running around with bear spray, all these ladies are on cell phones screaming, ‘There’s three cubs in the tree! . . . Then one of them goes, ‘Wait! You’re that snowboarder, that Olympic medalist! You’re the one who ran over the bear?”
Luckily, Rosey, nor the bear were injured. “There was no blood on the truck, Fletcher said. Only hair and bear scat. “We scared the poop out of him,” she said.
[Link: Anchorage Daily News]
by The Editors on August 25, 2008
Shaun White recently appeared on Fox Sports list of Top two-sport Athletes of all time. He was sandwiched right in there ahead of “Bullet Bob” Hayes “the world’s fastest human in the 1960s” right behind Deion Sanders “the flashy, brash, and cocky” footballer and baseballer.
Not bad company if you’re stoked on team sports. We’re not, but luckily the Skateworks blog keeps track of that stuff for us.
[Link: Fox Sports via Skateworks]
by The Editors on August 24, 2008
It was bound to happen sooner or later. Dude’s getting old. But Mike “Mack Dawg” McEntire has decided that he’s through doing the annual snowboard movie and is going to concentrate on other projects. One of which is a documentary on the life and weird times of Peter Line.
One of the more interesting things Dawger had to say was about what Transworld Business writer Mike Lewis called the “Internet piracy of content.”
Any industry that relies on a digital master and makes copies of it to make money dies by the Internet,” says McEntire. “It doesn’t matter what you do, if it’s a digital item that you can put on a computer and send it around then that’s exactly what they do. . . . “People…don’t know how much effort all the riders and film companies put into this. In the end I would have to say that a lot of people [in the industry] will be getting over it fairly shortly too, and then what happens is all these kids that thought they were all stoked for getting this stuff for free are gonna get nothing, well nothing of super, crazy good quality. There’s a handful of people that have been making snowboard movies for a super long time and they’re skilled craftsmen at what they do, and when those guys start to go away then the kids are gonna see that there’s a big difference between that type of production and just some kid with a [camera].”
Turn to face the strange changes. . . . .
[Link: TransWorld Business]
by The Editors on August 21, 2008
Teen retailers and especially mall retailers have had a tough year this year and Zumiez has has not escaped, however in the second quarter conference call held at 2 PM PST on August 21, 2008 CEO Rick Brooks and CFO Trevor Lang believe the company is doing very well compared to competitors.
Total net sales for the second quarter (13 weeks) ended August 2, 2008 increased by 12.5% to $92.3 million from $82.0 million reported in the second quarter ended August 4, 2007 (13 weeks). The company posted net income for the quarter of $2.7 million or $0.09 per diluted share versus $3.1 million or $0.11 per diluted share in the second quarter of the prior fiscal year. Comparable store sales decreased 1.7% for the second quarter of fiscal 2008 compared to an 11.6% increase in the second quarter of fiscal 2007.
Rick Brooks, President and Chief Executive Officer of Zumiez Inc., stated: “We continue to make positive strides in our ongoing efforts to give our customers a unique specialty retail experience, while controlling costs and effectively managing inventories during this very difficult operating environment. Due to this focus, we exceeded our earnings projection for the first six months of this year. We have opened 39 stores this year and continue to make the investments necessary to build the Zumiez chain to our goal of 800 stores.”
And here are some of the notes we pulled from the call:
- The thing thing that surprised us most is not news to anyone who follows the Zumiez stock. The company has no debt. None.
- Zumiez is focused on remaining true to the brand. “Our business model has the strength of being a branded business model,” Rick Brooks said. “We work with our brands to leverage inventories. We work very closely with the brands . . . we have a very dynamic process of moving product to where it is selling strongest.”
- “This is a very promotional environment,” Rick continued. “This macro economic climate is tough. That is making it much more price point. While I’m not going to comment on specific brand performance, this is how we see it: Those brands that we are carrying that are focusing on distribution in core shop are doing very well.. . . On the other hand there are other brands that have wider distribution outside the core retailers, brands that we’re finding are being price promoted by our competitors in the mall outside the core, and on those we’re having to be price promotional. The places we have to be promotional are with the brands that are in our non-core competitors.”
- The company believes that opening more stores is still the best use of its cash. They are completely focused on the 800 stores target and will open 57 new stores in the fiscal year.
- Performance in the stores was broken up regionally. “California, Nevada, Arizona, was rough. Texas, Illinois, Wisconsin performed nicely for us.”
- “I just want to be clear with the investment community that we feel very good with the returns that we are getting on our stores,” CFO Trevor Lang said.
- eCommerce was up 75 percent in the second quarter and 65 percent year to date. “Our ecommerce business is very strong, yet it is still a very small part of our business,” Brooks said. “We believe that there is a big opportunity to build that business over the next five years. We’re starting to do a number of things along that front.”
- Snowboard business still plays a major roll in quarter four. In October it is about 11 percent of sales and goes to 18 percent by the end of the quarter: “We’ve been doing the snowboard business for a long time,” Brooks said. “Over the last number of years we have taken the strategy that we buy well below what we think we’re going to sell. We chase the weather. Where it snows is where we move the product. Based on the results last year. We are going after the technology driven products at the high end. And at the other end we have shipped more pricepoint driven packages as we get into the season were we can move on some in the price issue.”
- There are no plans to de-emphasize snowboarding.
- Zumiez sales percentages breakdown: footwear 18%, accessory 18%, hardgoods (skate and snow) 14%, men’s apparel 33%, junior 15%, boys 2% percent.
- Investing in information technology organization, is high on the list. Zumiez thinks there are some strategic investments we will make there.
- The company is working to get better deals on real estate on a landlord-by-landlord basis. “We are one of the few growing retailers,” Brooks said. “I think we are a very attractive tenant for the landlords and we try to look at our landlords are partners. We are doing deals with the landlords that value our position and ability to generate sales.
- Sales per square foot is currently running at about $470 versus $500 last year. “We look at total flow through on the business,” Lang said. “We’ll look at our high-volume stores that do more than 800 spsf and we expand them so the sales per square foot may go down but the profitability goes up.
- Regarding the tough economic retail climate: “What we need is for the consumer to feel better,” Brook said. “And when that happens we’ll be doing better.”
And just as Brooks and Lang were about to answer a question regarding employee retention and turnover the Internet broadcast crashed mid response. The operator apologized and we disconnected.
[Link: Zumiez]
by The Editors on August 19, 2008
Jeff Galbraith, publisher at Funny Feelings, LLC. is happy to announce the addition of two staff members at Frequency The Snowboarder’s Journal. Jessie Carlson as designer (apparently everyone in the art department has to be named Jessie), and Colin Wiseman as senior editor. Both have been around for a while, but it is press release season.
With her recent BFA in graphic design, tenure as a previous frequency TSJ intern, and an intuitive sense of what we do around here, Jessie is proving to be a perfect addition. She and her shepherd/husky mix Koda work with Jessie Lu Design to keep things correct upstairs in the art dept. Jessie Carlson is a charger who leaves the boys staring at her dust — both on the single track and on the hill. . . . Colin brings smarts, drive, and a real understanding of snowboarding’s roots and future. With personal travel from New Zealand to South America and a shred tutelage in the Canadian Coast Mountain range, Colin is definitely down for the rad.
Great staff is good, more great staff it even better. But then, wouldn’t really know anything about either of those options.
[Link: Frequency]
by The Editors on August 19, 2008
Gretchen Bleiler has been moonlighting as a video correspondent for Yahoo! Sports. Here is a clip of her interview with Dara Torres and Katie Hoff and others.
Nice work, Gretchen.
[Link: Yahoo! Sports]
by The Editors on August 16, 2008
The San Diego law firm of Luce, Forward, Hamilton & Scripps has “formed an “action sports” practice to provide legal services to surfers, skaters, snowboarders and others who are starting their own companies.
Attorneys in the San Diego firm’s new practice area — many of whom participate in the sports themselves — will work in collaboration with other practice groups, such as business, intellectual property, tax and estate planning, product liability, real estate and labor and employment.
We could all use a little law on our side.
[Link: Law.com]
The Orange County Business Journal has picked up the story about Quiksilver finding a buyer for Rossignol. Not much new in this story other than two interesting numbers:
