Quiksilver rides the wave of youth appeal. It caters to the young and athletic with surfwear, snowboardwear, sportswear, and swimwear sold under the Quiksilver, Roxy, Hawk, Lib Technologies, and Gnu names. Quiksilver owns the DC Shoes brand of footwear and apparel for young men and juniors. It sells its apparel, footwear, and accessories in specialty and department stores worldwide, including Nordstrom, Dick's Sporting Goods, El Corte Ingles, Galeries Lafayette, and Macy's. The retailer boasts about 770 owned and licensed stores under the Quiksilver, DC, Roxy (young women's apparel), and Quicksilver Youth banners. Quiksilver has expanded its products to include eyewear, watches, and personal care items.
The majority of Quiksilver's company-owned and licensed stores are in Europe, followed by Asia/Pacific, and the Americas. In fiscal 2011 (ends October) about two-thirds of the company's sales were generated outside the US. The firm's European headquarters is in France, while its Asia/Pacific headquarters is located in Torquay, Australia.
Quiksilver distributes its surf-inspired apparel primarily to surf shops, skate shops, other specialty stores, and select department stores. It also owns and licenses retail stores under its three core brands: Quiksilver, Roxy, and DC. Its Quiksilver Entertainment subsidiary produces programming that covers company-sponsored boardriding events, while also promoting the boardriding (and hence Quiksilver) lifestyle.
Sales & Marketing
To connect with its youthful audience, Quiksilver's advertising efforts include sponsoring athletes (including skateboarder Tony Hawk), world-class boardriding contests, magazine and online ads, retail signage, television programs, surf camps, skate park tours, and social media. In fiscal 2011 the company spent more than $124 million on ads and promotions, up from $107 million in 2010.
Quiksilver saw its sales jump about 6% in fiscal 2011 (ends October) vs. the prior year, while net income and cash flow from operations both declined. Indeed, 2011 marked the fifth consecutive year of unprofitability for the company. Also, while sales topped $1.9 billion in fiscal 2011, they are well below fiscal 2008's more than $2.2 billion in sales.
To grow sales and return to profitability Quiksilver has three long-term initiatives: strengthening its brands; expanding its business; and driving operation efficiencies throughout the business. After initially cutting jobs and instituting better sourcing practices early in the recession, the company in late 2010 took steps to convert its short-term debt to long-term in order to become more liquid and continue its relatively aggressive store expansion plans. (The debt restructuring was aided by investor group Rhone, which now owns about 30% the company.) The company is also looking at a new store concept which includes all its hard and soft goods and all brands under one roof. Test stores have opened in Europe and one is planned for Venice, California.
Quiksilver also has ventured into personal care products -- a relatively new niche for the company -- for its namesake and Roxy lines. Through an exclusive worldwide licensing agreement, Inter Parfums develops and distributes Roxy fragrance, sun care, skin care, and related items, as well as Quiksilver sun care and other products through 2017.
Going forward, Quiksilver faces increased competition from athletic footwear and apparel giant NIKE, which is stepping into the action sports industry.
Affiliates of Rhone Capital III own about 30% of Quiksilver's shares. – less
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