Quiksilver Slips on Slopes
Known for its surf and skate brands Quiksilver, Roxy and DC Shoes, Quiksilver Inc. slipped up during the first quarter of 2007. The Huntington Beach, Calif.–based company, which bought French ski company Rossignol in 2005 for $305 million and sells ski and snowboard equipment under the Dynastar, Lange, Gnu and Bent Metal brands, blamed unseasonably warm weather for a dismal first quarter. Rossignol, which relies on the seasonal winter business, was supposed to boost the quarter’s profits—and after a strong December, it looked like it might. Still, Bob Mc Knight, Quiksilver’s chief executive, told analysts the winter sports season was the “worst in decades,” causing an avalanche of consequences, including poor reorders, heavy markdowns and few orders for next season. Rossignol’s orders are down an estimated 20 percent, and some retailers, having given up on this year, are packing away their unsold merchandise and saving it for next winter. “The effects of that can be expected to continue throughout the year,” McKnight said.
Quiksilver’s net income for the first quarter rang up at $2.5 million—down 87 percent from $8.6 million in the same quarter last year. While sales were up 2 percent for the quarter, they paled in comparison to Quiksilver’s 58 percent sales jump in the first quarter of 2006. However, not every division of the company hit the skids. Quiksilver said the Roxy, Quiksilver and DC divisions met or exceeded expectations. Revenue from these brands grew 17 percent for the quarter.
Now, Quiksilver has re-evaluated its fiscal forecast for 2007. The company said it expects to earn 53 cents per share—down from a previous estimate of 75 cents to 78 cents per share. The company’s stock fell to $10.90, a 52- week low. At press time, the stock had recovered some, trading at $11.75 per share.
ASR Holiday Picking Up Steam
Gauging from the strength and number of the brands that have signed on so far, the Action Sports Retailer Trade Expo’s second ASR Holiday show is getting off to a strong start, show organizers said. Among the companies set to show May 23–24 at the Orange County Fairgrounds in Costa Mesa, Calif., are Quiksilver, Billabong, Hurley, O’Neill, Rip Curl, Fox Racing, Rusty, Paul Frank Industries and RVCA.
The holiday season has steadily grown in importance for the surf and skate industries. “The holiday selling window is 50 percent of our total sales for our stores. It’s important for us to see all the key vendors under one roof,” said Milo Meyers, co-owner of the Hanger 94 shop in San Diego. Charlie Setzler, vice president of sales for O’Neill Clothing, said a good holiday can make or break a retailer’s year. And the season gives manufacturers a chance to offer goods not normally associated with the surf or skate market. “With holiday, there is an emphasis in categories like fleece, outerwear, long-sleeve wovens and thermals that provide a different creative element from the rest of the year,” Setzler said.
To maximize the show’s effect, ASR organizers planned the show to come at the middle or tail end of surf and skate brands’ holiday selling season. Approximately 75 brands are expected to fill the show’s 8,500 square feet, up slightly from the show’s first edition. The big difference in this year’s holiday show will be in buyer attendance, said Andy Tompkins, ASR’s show director. “In 2006, we had about 500 buyers walk the show floor. This year we’re expecting 750 to 1,000 buyers,” he said.
Billabong Helps Humanity
Irvine, Calif.–based surf giant Billabong USA and its new charitable arm, Design for Humanity, will host a benefit on April 26 for Surfaid International. The event, a first for the Australian brand’s United States division, will be at the Avalon nightclub in Los Angeles and will feature live performances by up-and-coming band Shiny Toy Guns, an art show and a Billabong fashion show.
Advance tickets to the event will sell for $15 online and $30 the day of the show. Attendees may also bid on the art and custom fashions seen at Design for Humanity online at eBay (www.ebay.com).
Proceeds from the event will benefit Surfaid’s mission to prevent disease and promote education and health among villagers in Western Sumatra, where 25 percent of children die before the age of 12 from preventable and treatable diseases.
For more information, visit www.billabonggirls.com. To buy pre-sale tickets, visit www.wantickets.com/designforhumanity.
