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Skullcandy

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About Skullcandy

If your head craves sweet tunes, Skullcandy has a treat for you. The youth-oriented firm designs and sells edgy, stylish headphones, ear buds, docking station speakers, and other audio goodies, as well as apparel and accessories. Featuring an aesthetic design that appeals to its target audience of action sports enthusiasts, the gear was originally sold – more... at specialty shops but also can be found nationwide at Target and Best Buy, through the company's website, and in more than 70 countries where youth culture thrives. Skullcandy retains its street cred by sinking many marketing dollars into sponsoring boarders, surfers, and BMX bikers. Founded in 2003, Skullcandy went public in 2011.

The headphone maker, whose shares priced at $20 apiece, raised about $188 million in its July IPO. Strong demand for the deal led the shares to price above their expected range. Skullcandy will use the proceeds to pay off a debt load of $45 million, provide working capital for general corporate purposes, and to acquire other businesses, products, or technologies. (Indeed, in August it acquired the distribution rights to its products in Europe for about $18.6 million.)

Skullcandy executives and directors collectively own 75% of the company. Of the 75%, chairman Jeff Kearl (a manager at investment vehicle Ptarmigan and a trustee to The Alden Irrevocable Trust) holds 35%; CEO Jeremy Andrus directly holds 10% and another 8% jointly with his father, Brent Andrus, through the firm JA Cropston; and company directors Joe Ferreira Jr. and David Oddi (associated with Goode Skullcandy Holdings) each have a 17% share. Separately, Ptarmigan owns 34% of Skullcandy, and Goode Skullcandy Holdings holds a 17% stake.

A month after the January IPO filing, Skullcandy founder and CEO Alden resigned, which is unusual for a company in registration for an IPO. (Alden was named Entrepreneur of the Year in 2009 by Entrepreneur magazine.) He was replaced by Jeremy Andrus, who joined the company in 2005 and had served as president and COO since 2008. Andrus joined Skullcandy from Kimpton Hotel & Restaurant Group, Marriott, and Monitor Company. Alden's resignation came shortly before the company revealed soaring costs -- and a one-time charge for management incentive bonuses of $17.5 million --  that led to a net loss of $9.7 million in 2010.

While the company generates some 90% of its sales from headphones and boasts 1,200 products, it's working to expand its product portfolio and extend its reach in the US and abroad, where Skullcandy picks up about 30% of its revenue. Following the debut of its upscale Aviator and Mix Master headphones, which sell for $150 and $250, respectively, the audio equipment supplier made plans to pump out more premium products to cater to customers with higher discretionary incomes. Known to market headphones as a lifestyle product, much like Oakley does with its eyeglasses, Skullcandy has been expanding its product categories by introducing protective cases for smartphones and speakers for docking stations. It is also boosting its offerings in the video game space. To that end, Skullcandy acquired the assets of gaming headset manufacturer Astro Gaming for $10 million in early 2011.

Besides the usual headphones, ear buds, and other audiophile gear, the company serves its youthful target market by working with other manufacturers to include Skullcandy-branded audio technology into helmets, hats, jackets, and bags. It also serves up the hip brand and skull logo through partnerships with rapper Jay-Z's Roc Nation entertainment company, the NBA, the NCAA, and Hard Rock Hotel Holdings' Las Vegas hotel and casino.  

Another goal for the company is to get more of its products on retailers' shelves and in in-store displays. It's doing so by strengthening its relationships with existing clients, such as Dick's Sporting Goods and AT&T Wireless, and increasing its visibility with new mass merchants and specialty shops, particularly those who sell electronics, sporting goods, and mobile phones. Skullcandy also is investing in the interactive platforms on its website to drive sales by providing customers with ways to customize their shopping experience and by launching international websites with local content. Online sales account for about 4% of the firm's revenue.

Skullcandy, which relies on about 20 Chinese manufacturers to make its products, gets its namesake items in the hands of consumers overseas in more than 70 countries through agreements with third-party distributors. To accelerate its growth internationally, the headphones maker plans to duplicate its marketing successes in the US by sponsoring international athletes, musicians, and artists. In mid-2012 it hired a new product development executive with experience at Burton Snowboards to boost the brand. – less

Skullcandy Employer Reviews

Sales Manager-Kiosk (Former Employee), San Jose, CADecember 30, 2013
Admin Team (Former Employee), Park City, UTJuly 8, 2013
LA Territory Manager (Former Employee), Los Angeles, CASeptember 27, 2012
Product Development (intern) (Former Employee), Park City, UTApril 15, 2012
Assistant Office Manager for PD Team (Current Employee), Park City, UTApril 12, 2012