I stopped by the Quiksilver shareholder meeting Friday which drew a large crowd of investors, left, who listened to a presentation from Chairman, CEO and President Bob McKnight and CFO Joe Scirocco and watched a fashion show.
Here are the highlights from the presentation.
Quiksilver company goals
Company goals include driving growth in apparel and footwear brands, divesting the equipment business, continuing its initiative to streamline global sourcing, cutting expenses, improving operating profit margins, improving cash flow and reducing debt.
Apparel and footwear
The company is bullish on the prospects for its apparel and footwear division, which includes brands such as Quiksilver, Roxy and DC, despite the challenging economy and cautious retailers. Revenues in this division for the past fiscal year grew 20 percent to $2 billion.
Hardgoods
Quiksilver is pursuing the sale of Rossignol and is looking forward to having a more balanced portfolio. Sales fell 22 percent to $379.2 million for this division last year.
Retail
Quiksilver now owns 406 retail stores, a $392 million business acounting for 20 percent of apparel and footwear sales last year. The company believes its early focus on retail gave it access to the best locations and thus it has a strategic advantage over other brands now getting into the retail game. Going forward, Quiksilver is slowing down openings and working on managing retail operations more efficiently.
Quiksilver brand growth
Growth for the Quiksilver brand will come from product extensions in footwear, Quiksilver women (A “wide open opportunity” Bob said), denim, accessories and technical performance apparel. Other growth will come through door growth with retail customers, including PacSun, Zumiez, Tilly’s, Jack’s, Nordstrom, Macy’s and Quiksilver stores. Quiksilver will also push into new regions such as Russia, Eastern Europe, China and India.
Roxy brand growth
Growth for the Roxy brand will come from product extensions in footwear, denim, accessories, cosmetics and active performance apparel. Door growth will come from surf shops, specialty retailers, department stores, boutiques and outdoor retailers and new territories such as Latin America, India and China.
DC brand growth
The DC business has tripled in size to $354 million in revenue since Quiksilver bought the brand in 2004. Apparel and accessories account for 34 percent of DC sales. DC has also expanded in snow outerwear and snowboards. DC will expand doors in specialty footwear and fashion stores, urban stores and department stores. It’s also making a big international push, with 25 percent of total sales now coming from Europe.
More on DC
Left to right: DC SVP of Sales Mark Miller,
DC President Nick Adcock and Bill Bussiere.
Quiksilver Americas CFO Bill Bussiere.After the presentation, DC President Nick Adcock told me that while DC has tons of growth potential in the Americas, he also sees international as a huge opportunity.
Organizationally, DC headquarters in Vista sets the design and marketing agenda globally, then the regions execute the vision. DC maintains sales and marketing offices in different global regions, and uses Quiksilver’s infrastructure in different territories to handle the back end.
Nick also told me that since DC is doing so well despite the rocky economy, it has allowed the company to pick up talent from competitors where things aren’t as rosy. DC has grown to 250 employees, and will probably pick up another 30 employees this year. The DC team has a “good energy” right now, he said.
