Skullcandy is announcing this morning that it will be closing its San Clemente office to better align its product, marketing and sales teams, CEO Hoby Darling told me in an interview.
The company also announced a major promotion for one key executive and the departure of another.
The plan is to house everyone under one roof at company headquarters in Park City with the goal of creating a richer company culture and to ensure that product stories are unified from start to finish to better serve retailers and consumers, he said
“Culture is the foundation of everything and it’s tough to have multiple cultures in multiple offices,” Hoby told me. “By bringing everyone together, we hope to create a challenging, fun environment and go do amazing things.”
The majority of the 30 employees who work in San Clemente will be offered jobs in Park City and relocation assistance. It will be interesting to see who opts to leave Southern California for Park City, especially since most of Skullcandy’s marketing team is based in San Clemente as are some high level executives.
“While we are optimistic that many of our team will make the move, we recognize that not all will,” Hoby said.
Better aligning product, sales and marketing, something Hoby experienced first hand during his tenure at Nike, was something he realized could be improved upon at Skullcandy as he observed operations during his first few months on the job.
“Nike is great at what they call their category offense – where product, demand creation and sales from beginning to end are all aligned,” he said. “After being here, I realized we can be that in audio.”
Truly accomplishing that will be a lot easier – and more fun – when the teams can talk to each other face-to-face rather than picking up phone, he said.
Hoby plans to talk with employees in San Clemente this morning with the message of “This team is essential and we love you. … This is not about SG&A cuts. It’s all about we want to unite as one culture and do amazing things.”
With the office consolidation, Skullcandy expects to record $3 million to $3.8 million in restructuring charges.
The company plans to start the office consolidation project this summer and have it completed by early fall.
Skullcandy opened the office in 2010 in a quest to build its presence on the West Coast and penetrate the culture there. Prior to that move, the brand was best known as a snowboarding brand.
See Page 2 for who at Skullcandy is receiving a big promotion, and who is departing
Big promotion
To help ensure this alignment takes place, Hoby has promoted Sam Paschel, most recently EVP of Product Development and Merchandising, to the new position of Chief Commercial Officer. Sam joined Skullcandy last September from Burton.
“Sam is a rock star and one of the few guys you meet in your career who have the left and right brain skills,” Hoby said. “He has an engineering background and ran a product category at Burton but also ran marketing during his time there. When we were looking at how to better align sales, marketing and product, we knew he was a great guy to help us get there.”
In his new position, Sam will oversee product and demand creation teams.
CFO departure
Skullcandy also announced that CFO Kyle Wescoat is departing the company after a short tenure to work closer to his home in Southern California. He will remain with the company until September to assist in the transition.”
See Page 3 for the official press release
Press Release:
Skullcandy, Inc. to Align Product, Marketing and Sales Functions Announces Executive Changes and Commences Search for Chief Financial Officer
PARK CITY, UTAH – June 18, 2013 – Skullcandy, Inc. (NASDAQ: SKUL) today announced the Company is taking significant steps to better align its product, marketing and sales functions in order to strengthen its position as the leading performance and lifestyle audio company driven by the creativity and attitude of youth culture. The Company also announced certain executive changes and the commencement of a search for a new Chief Financial Officer.
As part of the process, the Company is relocating its marketing, creative, business development and legal departments, as well as certain sales and international personnel to its headquarters in Park City, Utah, and will close the office in San Clemente, California, which has historically housed significant portions of these functions.
Hoby Darling, President and Chief Executive Officer commented, “Bringing together our teams in Park City will allow us to better focus our go to market process and ensure that our products, messaging and distribution are aligned with our target consumer. It will be fantastic to have these three critical functions collaborating under one roof and represents an important step toward executing our overall long-term strategic plan. It will also enhance our ability to attract top talent and build an even stronger culture, as we look to be one of the most desirable employers in the audio and youth culture segment. With three world-class mountain resorts, hundreds of miles of trails and significant technology and creative influences, Park City provides us a fantastic base that is rooted in our authenticity as an active and creative brand born on the mountains and in skate parks.”
The Company expects to record an associated pre-tax, restructuring charge in the range of $3.0 million to $3.8 million, of which $500 thousand to $1 million is estimated to be incurred in the second quarter of 2013. The Company has approximately 30 employees in San Clemente, the majority of whom will be given the opportunity to relocate with the Company’s assistance and continue working in the Park City office. The Company plans to begin implementing the proposed changes this summer and expects the moves to be complete by early fall to minimize any business disruption.
Executive Changes
The Company also announced that Sam Paschel, currently Executive Vice President of Product Development and Merchandising has been promoted to the newly created position of Chief Commercial Officer, where he will oversee the operations of both the product and demand creation teams.
Mr. Darling commented, “Since joining Skullcandy last September Sam has had a very positive impact on improving our product development strategy and spearheading changes in merchandising so we can better excite and serve our consumer. As we bring our product, marketing and sales teams together in Park City, I’m confident Sam is the right person to oversee further alignment of our product, merchandising and demand creation efforts.”
The Company also announced that it has commenced a search for a new Chief Financial Officer following Kyle Wescoat’s decision to resign in order pursue opportunities closer to his home in Southern California. Mr. Wescoat will remain with the Company through approximately September 2013 while it searches for his successor.
“I want to thank Kyle for his efforts during this period in the Company’s history,” said Mr. Darling. “He has been a trusted asset during my first few months on the job and I’ll continue to rely on his financial acumen and leadership to ensure a smooth transition and help improve upon our recent performance.”
ABOUT SKULLCANDY, INC.
Skullcandy is a leading global designer, marketer and distributor of performance audio and gaming headphones and other accessory related products under the Skullcandy, Astro Gaming and 2XL by Skullcandy brands. Skullcandy was launched in 2003 and quickly became one of the world’s most distinct audio brands by bringing unique technology, color, character and performance to an otherwise monochromatic space; helping to revolutionize the audio arena by introducing headphones, earbuds and other audio and wireless lifestyle products that possess unmistakable style and exceptional performance. The Company’s products are sold and distributed through a variety of channels in the U.S. and approximately 80 countries worldwide. Visit skullcandy.com, or join us at facebook.com/skullcandy or on Twitter @skullcandy.
