2010 Retrospective: Specialty Chains: Zumiez, Gap
2010 was the year that Zumiez Inc. could do no wrong.
The Everett, Wash.–based boardsports fashion retailer reported high double-digit same-store-sales increases in October and November. Its third-quarter profits were the highest in the company’s history, according to Rick Brooks, the chief executive. Total net sales for the quarter that ended Oct 30, 2010, increased 20 percent to $135.9 million from $113.2 million in the 2009 third quarter.
The 400-store company opened 27 locations in 2010. The expansion was powered by compelling surf and skate brands sold in unique package deals. Zumiez consumers often shopped at the store not for a single T-shirt, but, rather, they shopped for the package deals composed of a T-shirt, a hoodie and a pair of pants for a special price, according to Jeffrey Van Sinderen, a retail analyst for Los Angeles–based B. Riley & Co.
The company’s only 2010 misstep was losing a bidding war for Canadian retailer West 49 Inc. In July, major surf company Billabong announced it was going to acquire the 138-store chain for $99 million (Canadian). Zumiez said it would top Billabong’s offer, but West 49 eventually said yes to Billabong.
Zumiez probably did not have too much time to sulk about the lost opportunity. After reporting a stellar third quarter, Van Sinderen forecast in a Dec. 2 note that Zumiez’s fourth-quarter sales would beat its third quarter.
For Gap Inc., 2010 was a year of recovery. In 2009, the international specialty-retail giant mostly reported declines in its same-store sales. However, in the past 12 months, the San Francisco retailer, with 3,100 stores, reported mostly low single-digit increases in its same-store sales.
In a Nov. 4 note, Lazard Capital analyst Todd Slater said he was not impressed. He wrote that Gap Inc.’s retail traffic was below mall averages. In an Oct. 14 note, he wrote the retailer needed to do more with its merchandising—it invested too heavily in denim and black pants.—Andrew Asch
