Volcom says it's "youth against establishment," however, this establishment is firmly on the side of youth -- those skateboarding, surfing, and snowboarding. The firm designs action sports apparel, footwear, and accessories for men, women, and kids. It operates and licenses about 35 retail stores and outlets under the Volcom banner in the US and abroad. It also owns two Laguna Surf & Sport stores in California, which sell branded merchandise for surfers and beachgoers. Besides its own shops, Volcom sells its brand through department stores, specialty retailers, and online merchants in the US, more than 40 other countries. Founded in 1991 by CEO Richard Woolcott, Volcom is a subsidiary of France's PPR.
Looking to boost its sports and lifestyle unit, the French luxury group acquired a majority stake in Volcom in June 2011 and purchased the remaining shares later that month. PPR paid $24.50 per share for Volcom, valuing the company at $608 million. As a wholly owned subsidiary of PPR, Volcom should benefit from its new parent company's expertise in global markets, where it has been wanting to expand. As for PPR, the purchase adds many more youthful and loyal consumers to its customer base.
PPR's buyout followed a rebound in Volcom's sales. In 2010 sales increased by about 15% and net income grew modestly versus 2009. Men's and boy's apparel sales increased by 23% and 26%, respectively. Together the two categories account for about 60% of Volcom's total sales. However, the company failed with girls with sales declining by about 6% in 2010 vs. the previous year. Despite the gains, 2010 sales were still below 2008 levels. By comparison, in 2009 sales declined by about 15% vs. 2008 as retailers cut back their inventories on account of sluggish consumer spending.
To re-energize revenues, Volcom has been expanding its international operations. In 2010 the firm purchased its licensee in Australia for $3 million and later acquired the assets of its distributor in Spain to begin directly distributing its products there. (In 2009 Volcom took over distribution of its branded products in the UK.) The company has other licensees in Argentina, Brazil, Indonesia, and South Africa. Volcom hopes to boost sales by extending the licensee-buyout strategy to the US, as well. In 2011 the company agreed to acquire the assets of a licensee that operated 10 Volcom outlet stores in California, Nevada, Utah, and Washington.
The company has developed a following among enthusiasts of board sports (skateboarding, surfing, and snowboarding), and in recent years it expanded the scope of its surf operations as well as broadened its brand portfolio to attract motocross fans. Volcom added a new retail banner to its business with the 2008 acquisition of Laguna Surf & Sport in California. Composed of a mere two stores, the chain maintains strong brand recognition and has had a hand in setting nationwide fashion trends. Also that year Volcom paid $27 million for Electric Visual Evolution, a core action sports brand whose line includes apparel, eyewear, hats, and other accessories, and it took over distribution of its branded products in Japan. The deals helped to boost Volcom's revenues in 2008, however, demand was stifled the following year because of tough economic conditions worldwide (particularly in the US, which has struggled through a deep recession).
Volcom works to keep its logo front and center with anti-establishment youth through sponsorship of concerts, sports events, board-sports athletes, and cyclists. The company also runs film and music divisions.