Let’s start with the good news first in this week’s retail and financial round-up. First, the old-school surf brand Lightning Bolt, which was the brand to wear among teens in the late 70’s/early ’80s, is making a surprise comeback. The brand was started in Hawaii 38 years ago by surfers Gerry Lopez and Jack Shipley, who started by making shorter surfboards with the lightning bolt logo before getting into apparel. Now, the brand is under a redesigned concept to bring retro-cool to reality again thanks to a boost by none other than Jonathan Paskowitz.
The new Lightning Bolt collection features men’s and women’s surf and skate-inspired apparel including shorts, graphic T-shirts, board shorts, tops, accessories and an entire denim line with prices ranging from $31-$250. The collection is being distributed starting this month in select core retail shops.
Quiksilver Refinances and Resigns Kelly Slater
On June 8th, Quiksilver, which also owns Roxy and DC, announced their second quarter earnings and new plans for refinancing and restructuring their debt and brand outlook. First, consolidated net revenues decreased from $596.3 million to $494.2 million, representing an 8% decline. This does not include Rossignol which sold in the first quarter of 2009.
In the Americas segment, new revenue decreased 7%; in the European segment net revenues decreased 26%; and Asia/Pacific segment decreased 16%.
According to Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., “We are pleased to report second quarter earnings that are essentially in-line with our expectations, but the environment remains extremely challenging and we have yet to see any improvement in overall business trends. With customers proceeding cautiously in this uncertain market, orders for the second half are building more slowly than in past periods and we continue to look for opportunities to streamline the business and improve profitability. As such, we are targeting substantial cost reductions by the end of this fiscal year and are planning our business conservatively.”
International private equity firm, Rhone, will provide $150 million 5-year loan to Quiksilver, plus they will get a $200 million line of credit with Bank of America and GE Capital in the Americas. In exchange Rhone will appoint 2 new board of directors
The concept for the investment capital and loan is to streamline businesses of Quiksilver, Roxy, and DC.
In other Quiksilver news, the company has re-signed 9-time ASP champion Kelly Slater for additional 5-year sponsorship.
Zumiez Takes a Beating
The action sports-inspired retail chain Zumiez same-store sales announcement was a real blow posting a 20.7% drop in May, which they say was because of lower transactions than they anticipated.
Analysts on average were expecting same-store sales to fall 20.2 percent, according to Thomson Reuters Estimates, instead of the 20.7% that did happen. Total net sales fell 9.6% to about $23.5 million for the four-week period ending May 30.