Quiksilver Looks to Drop Rossignol Tighten Retail and Focus on Strategic Sourcing in 2008
On March 28, shareholders of Huntington Beach, Calif.–based surf giant Quiksilver gathered for the company’s annual shareholders meeting. Held at the company’s headquarters, the only item on the ballot was the re-election of the nominated board of directors, which passed without opposition. Moderated by Bob McKnight, Quiksilver’s reappointed president, the meeting shed light on Quiksilver’s plan for 2008 and recapped its 2007 performance.
McKnight described 2007 as “fairly challenging for the industry” and for Quiksilver, citing weather, energy prices, a volatile stock market, the strained credit market and a slowing economy. Still, he said, despite cautious buying by retailers, the company grew total sales to a record $2.4 billion. Footwear, a growing focus for the company thanks to its burgeoning DC brand, accounted for 18 percent of total softgoods sales.
Company goals for 2008 ranged from continued growth in the apparel and footwear markets to culling its hardgoods business— specifically the Rossignol snow brand, which McKnight said Quiksilver is “pursuing divesting.” The sale of Rossignol would help lower debt and improve cash flow, said Joseph Scirocco, Quiksilver’s chief financial officer. The snow brand saw its sales plummet 22 percent in fiscal 2007.
Revenues in Quiksilver’s apparel and footwear categories grew 20 percent in the last fiscal year, to $2 billion. To make its production more competitive, reduce expenses and expand its margins, Quiksilver has launched a global sourcing initiative. The initiative will consolidate its vendor base, establish new leadership in its global sourcing department and tighten the range of styles produced by Quiksilver’s brands, which include Roxy, DC and Quiksilver. In total, Quiksilver expects to cut $20 million in expenses for 2008.
Slowing retail openings and tightening up operations at Quiksilver’s more than 400 retail locations is another focus for this year. However, e-tail efforts will continue to be important. In 2007, Quiksilver launched e-commerce initiatives in the United States and Europe. The move proved controversial and angered the brand’s longtime online retail partners. —Erin Barajas
