New Quiksilver CEO Andy Mooney and Executive Chairman Bob McKnight called me this afternoon to provide context and color to some of the changes happening this week at Quiksilver and to correct several pieces of what they said was erroneous information that has been reported online.
We discussed what is happening with Quiksilver-sponsored athletes, what the future holds for VSTR and Summer Teeth, the status of DC Women, and why the company is shuttering Quiksilver Girls and Quiksilver Women’s.
Athlete sponsorships
First, let’s start with athlete changes. While the company is narrowing its athlete rosters in hopes of significantly elevating the profiles of the athletes it is retaining, it is not abandoning the strategy of athlete sponsorship, Mooney and McKnight stressed.
After the narrowing, the Quiksilver and Roxy professional surf teams have 180 paid surfers – larger surf teams than any other competitor, according to Bob.
New Quiksilver CEO Andy Mooney officially started Jan. 11. Shop-eat-surf file photo.And in snow, the company is not cutting the whole snow team save one. After the reduction, the company still has 93 paid snow athletes for Quiksilver, DC, and Roxy combined. That figure does not include Mervin, which also still sponsors athletes.
“We are still every bit as focused on athletes for all three brands going forward,” Andy said. “What we are doing is narrowing our focus. We have tremendous athletes and they should be household names beyond the core universe and they aren’t because nobody in the industry has the money to activate them. It’s not that I am trying to save money and put it in my back pocket. I plan to reallocate the money and to spend more money on the athletes we have.”
The plan is to elevate the marketing behind them in both traditional media and social media as well, Andy said.
Bob also stressed that the freed up resources will allow Quiksilver to sign more up-and-coming athletes.
In this quest to focus and go deeper, Andy and Bob believe it made sense to eliminate the skate teams for the Quiksilver and Roxy brands, and the surf team for DC, which in both cases are not core competencies.
I asked Andy if it was frustrating that so many people this week were convinced he was cutting nearly all Quiksilver athletes.
“I was hoping people would cut me some slack and look at my 20 years at Nike where I saw the power of what athletic talent can bring to a brand,” Andy said. “I totally understand and appreciate that. Coming in here and whacking athletes is the last thing I want to do.”
Andy believes raising the profile for Quiksilver, DC and Roxy athletes on a global scale will not only benefit Quiksilver, but the industry as a whole.
See Page 2 for the truth about DC Women, the future of VSTR and Summer Teeth
DC Women
It was also wrongly reported this week that DC is exiting women all together, Andy and Bob said.
Andy said DC will retain its key items business in both footwear and apparel for females.
Recently, DC Women had moved into a more collection strategy for apparel, and that is being narrowed, he said.
“What we are doing in DC Women’s is not a radical shift,” Andy said.
Quiksilver Women, VSTR, Summer Teeth
Focus, focus, focus is the theme that runs through every change that is happening at Quiksilver.
“Focus is a recurring theme that Bob and I see for the company for the foreseeable future,” Andy said. “Focus on the our key brands, focus on our key athletes, focus on key categories.”
That approach led to some shuttering of brands this week.
The Summer Teeth brand will transfer back to Dane Reynolds, who owns it
Andy and Bob confirmed that emerging brand VSTR is being closed and that Quiksilver is transferring management of the Summer Teeth brand back to Dane Reynolds, who owns it.
The reason for the changes in the Emerging Brands group is that the company wants to marshal its resources and again, sharpen its focus, on its three key brands, which Andy believes have a tremendous runway for growth.
A particularly difficult decision was shuttering Quiksilver Women’s and Quiksilver Girls, Andy said.
“They’ve done a great job, and what they’ve done is exciting,” Andy said.
But after analyzing the situation, the feeling was that the QSW and Quiksilver Girls product was cannibalizing sales from both Roxy and Quiksilver Men.
A lot of the volume for Quiksilver Girls and Women is done in Quiksilver owned stores, Andy said. To find space for it, it meant taking Quiksilver men’s product and Roxy product off the racks and shelves.
Also, it was hard to differentiate between Roxy and Quiksilver Girls in some product categories, for example bathing suits, where the logo wasn’t prominent. If only the logo was the key differentiator to consumers, Andy believes it is better to focus on the company’s largest female brand, Roxy.
“The reason we decided to exit Quiksilver on the women’s side is to make both Quiksilver in men’s and Roxy in women’s even stronger,” he said.
See Page 3 for the internal memo Andy sent to Quiksilver employees late this afternoon
Here is the internal memo Andy Mooney just sent to Quiksilver employees:
From Andy Mooney:
“I thought it would be helpful to share a few details about recent decisions made, the rationale behind them and the process involved.
I spent my first two weeks on the job with Bob, Charlie and Carol meeting Pierre and his team in Europe, Greg in Japan and Australia as well as Craig and the QAS team in Hong Kong.
Those two weeks were an invaluable learning experience, listening to the challenges and opportunities in each region.
After that I spent a a number of weeks with Rob and the US team.
After 10 weeks of meetings, capped off with a week long executive team meeting in Huntington Beach, Bob, I and the entire management team reached consensus on some key decisions we can communicate today.
Focus is a recurring theme you’ll hear going forward. We must focus on our key brands, key athletes and key categories in order to compete and grow.
Our key brands are Quiksilver, Roxy and DC. Within these brands we must further focus.
To that end, we have made the decision that Quiksilver and Roxy should exit the skate category and that DC should exit the surf category.
Those decisions were relatively easy to make and require little explanation.
A more difficult decision was for Quiksilver to exit women’s. We felt this was vital in order to focus our resources on making Quiksilver in men’s and Roxy in women’s as strong as they can possibly be.
The VSTR line inspired by Kelly Slater is shutting downThe Quiksilver’s women’s and girl’s teams have done an outstanding job generating top line growth.
Some of this growth however has come at the expense of existing business, particularly within our own retail stores.
In order to generate significant future growth, it seemed inevitable that we’d cannibalize Roxy’s business in key categories.
This was a particularly difficult decision as many people have given their all to make Quiksilver women’s a success.
We believe this decision however will allow us to compete more aggressively in men’s with Quiksilver and in women’s with Roxy.
A few web articles over the last few days stated DC was exiting women’s. This is absolutely untrue.
DC will remain in women’s in footwear and apparel. We have always been strong in key items in women’s footwear and apparel at DC and expect to be even more so going forward.
We have made the decision to discontinue VSTR and to pass the management of the Summer Teeth brand back to Dane Reynolds, again, in order to focus on our key brands.
Athletes are vital to the success of Quiksilver, Roxy and DC. We have an amazing roster of talent at the top of their respective sports in surf, snow and skate and an equally amazing depth of talent. We’re committed to maintaining our leadership position in athlete endorsement in action sports.
Our key athletes should be household names, known well beyond the universe of core fans.
Over the last few weeks, we reduced the number of athletes under contract. This was done to free up resources to tell the world about the many great athletes we work with.
Quiksilver for example will continue to have 130 pro surf riders on its team, Going forward, we have the opportunity to tell people how great those athletes really are.
All of these actions are in support of our three strategic goals of strengthening our brands, growing sales and driving operational efficiency.
I hope this puts these recent decisions in some context. We have a great many details to work out and will have more news to share with you in the coming weeks.
I will do my utmost to keep you informed every step of the way.”
Andy
