Salty Crew and FXD workwear continue to be key growth drivers for parent company Globe International Limited, which has been moving away from owning smaller skate brands in the volatile hardgoods category and toward the higher margin apparel business and hardgoods brands that have scale.
Salty Crew has logged a compound annual growth rate (CAGR) of 16% over the past five years according to Globe, and FXD workwear, which started in Australia, is now growing rapidly in North America as well.
However, the exit from its smaller skate hardgoods business has led to a revenue decline for the six months ended Dec. 31, the company reported last week. That’s because during the same period last year, Globe still operated a portion of the brands but now no longer has that revenue.
Overall, Globe International revenue dropped 12% to AUS $95.3 ($59.2 million) million for the first six months of its fiscal year, while EBIT totaled AUS $7.1 million ($4.4 million), a 3% decline. Net profit after tax also dropped 3% to AUS $4.8 million ($2.9 million).
“Globe International’s long-term strategy of building stronger, more profitable brands remains on track,” CEO Matt Hill said in a statement. “The work we have done and the strategic initiatives we have implemented have improved profitability, and laid solid foundations for further, high-margin growth. We expect to see the benefits continue to flow through to the second half of this financial year.”
Focus on Scaling its Core Brands
Globe calls Salty Crew, FXD, and Globe Footwear its core brands, which collectively comprised 83% of sales in the period, compared to 70% in the same period last year. During the first half, revenue for FXD, Salty Crew, and Globe Footwear grew 13% overall with positive earnings.
According to the company, some highlights included:
- Salty Crew growing across regions, including in Europe, through expanded distribution and product range.
- FXD maintaining market-leading position in Australian workwear, and growing its footwear category there. In North America, FXD’s five-year CAGR is 53%.
- The puffy shoe trend is benefitting Globe, with international markets outside of Australia growing 11%.
Globe continues to invest in emerging brands as well, including swim brands It’s Now Cool, workwear brand X-DMG, and eyewear brands Szade and Ritual Vision. The company said its strategy is to invest diligently in these brands, and if a brand no longer fits the long-term global strategy of the brand portfolio, it is discontinued.
“Some new and emerging brands will become core brands of the future,” the company said in its report.
Bullish on Second Half
The company believes the foundation is now in place to grow revenue and profit over the remainder of fiscal 2025.
“Globe International remains a stable yet ever-evolving global brands house, based on a mix of built-for-purpose core and emerging brands,” Hill said. “Our core brands are operating in markets with significant long-term growth potential, which gives us confidence that we are on track to return to revenue growth in the second half of FY25 and grow returns to shareholders.”
