Sanuk is selling to Deckers Outdoor Corporation, a publicly traded footwear company and the parent company of the respected UGG brand, Deckers announced today.
Deckers will pay $120 million in cash, and possibly more based on a five-year earn out agreement. The deal is expected to close in the third quarter, and senior Sanuk management will continue to manage the brand, according to the press release.
Deckers CEO Angel Martinez said the Sanuk brand has “true global lifestyle potential,” in a statement.
Dac Clark, co-owner of C&C Partners. C&C helped Sanuk leverage its potential with financial backing and operational expertise. Shop-eat-surf file photo.
The acquisition is the second industry acquisition to be announced this month. Just over two weeks ago, French luxury company PPR revealed it is acquiring Volcom.
Sanuk, the Thai word for happiness, is one of the hottest footwear brands in the surf market and recorded $43 million revenue in 2010, according to the release. The brand has been on a rapid growth curve, and is known for its creativity, sense of humor and for its product differentiation. In 2010, the company was on track to double sales when I interviewed executives in November, and they saw the potential to double yet again in 2011.
Founded by Jeff Kelley in 1997, the brand is owned by Jeff and partner Ian Kessler. Jeff is the creative force behind the brand, and is known for his out-of-the-box ideas, such as the Sidewalk Surfer, the Yoga Mat sandal and the Fur Real sandal.
The Sidewalk SurferDac Clark and Paul Carr of C&C Partners, have the license for Sanuk in the U.S., Canada and Europe. Their operational and infrastructure expertise, and their financial relationship with CIT, helped Sanuk manage its rapid growth. Jeff had turned to C&C for help growing the business when there was no more equity left in his home to tap.
Previously, C&C had the license for Gotcha, Rusty and Redsand. Currently, it is a partner in the well-regarded swim line *L Space.
John Vance, Chief Operating Officer, runs day-to-day operations at Sanuk.
The Deckers release did not specify how the proceeds from the sale would be divided between the Sanuk trademark owners – Jeff and Ian – and C&C, which runs the business side of things.
Moss Adams Capital, LLC acted as financial advisors to both Sanuk and C & C in the transaction.
See Page 2 for more
Sanuk’s Yoga Mat sandalSanuk shook up in the market in 2006 when it debuted the Sidewalk Surfer, a closed-toe hanging shoe that was as comfortable as a sandal. The company created a whole new category in core stores, a category many other brands have now entered.
While it made a splash with Sidewalk Surfers, Sanuk is also a player in sandals. According to Cary Allington of ActionWatch, Sanuk was the only brand in 2010 to make the top-10 list by market share in both the sandals and closed-toe shoe classes in ActionWatch data.
In fact, Sanuk’s sales gains on the ActionWatch panel in sandals in 2010 were even higher than the brand’s gains in closed-toe shoes.
Another example of Sanuk’s creativity
In a previous interview, Sanuk executives told me shoes account for 60% of Sanuk sales and sandals, 40%.
It also has a robust women’s business. Within sandals, women’s product accounts for 60% of sales. Within shoes, women’s accounts for 40% of sales.
Sanuk sells a wide range of retailers, including most of the premiere surf doors, Fred Segal, Kitson and Barneys, REI, independent outdoor stores, Dick’s Sporting Goods and Journeys.
Interestingly, I have previously heard Sanuk executives express admiration for the UGG brand, which has experienced rapid growth under Deckers while maintaining quality distribution and a non-discounting philosophy. The UGG name has also become synonymous with fashionable winter boots.
For more about Deckers and the Ugg brand, including financials and growth strategy, see our profile of Deckers.
