Billabong Sells Sector 9 and Lets Fly with a Press Release

Well, the press release was back on June 3rd.  And the sale of Sector 9 was, I guess, a week ago.  Happily, it’s not my job to be timely, but to give you things to think about with the goal of maybe helping you do better business.

So let’s think about Billabong.  Back when CEO Neil Fiske took over, there was a decision early on to focus on their big three brands- Billabong, Element and RVCA.  Good decision, I thought.  Most recently, they’ve sold Sector 9 for US $12 million.  As I’ve written previously, I expect the sale of additional brands.  Some of them may be small enough that a formal announcement of the sale won’t be required.  Maybe they are already gone.

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Fun Times at Other Industry Retailers

At almost the same time Abercrombie & Fitch (owner of Hollister), Tilly’s, The Buckle, and Genesco (owner of the Journeys chain) released, in early June, 10-Qs for their quarters that ended April 30th.

I was going to do my usual thing and review each one separately.  But I was busy, too much time passed and honestly, there’s so much sameness to what our industry’s retailers are saying that I wasn’t sure anybody would want to read four separate reports.  Hell, I didn’t even want to.

So what I’ve done is gone through the 10-Qs and collected a few observations and some summary data.  It is, I think, enough.

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Agenda- Trade Shows, Brands I Saw and Possibly Random Thoughts

What I most liked about Agenda this time was how refreshingly inviting it was.  Lots of open space and perhaps wider aisles.  Maybe lighter?  Especially on Wednesday, there appeared to be a lot of traffic and people seemed upbeat.  Apparently that might have had something to do with getting a few days of sun after a pretty gloomy late June.

Still, I wondered if the openness wasn’t an indication of fewer brands taking booths or maybe taking smaller booths.  I didn’t talk to anybody who told me straight up how great business was and certainly the role of trade shows (not just Agenda) continues to evolve.

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Another Tender Offer for Skullcandy- It Will Be Good to See the Brand Private

I imagine you are all aware that Incipio reached an agreement with Skullcandy on June 23rd to make a tender offer for the company’s common stock at a price of $5.75 representing a price of approximately $177 million.  That agreement allowed Skullcandy some time (until July 23rd) to see if it could find a better offer.

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The Impact of Market Consolidation

We’re all watching the continuing rationalization of our retail space.  I suppose “rationalization” is a way too benign sounding word for a process that includes bankruptcies, store closings, job losses, margin hits, too much inventory, and struggles to increase sales and even to stay in business.

As ugly as this continues to be, there are going to be opportunities for the brands and retailers who get through it.  I’m going to take some comments from Dick’s Sporting Goods most recent conference call to help us think about the upside and downside of the process.  Dick’s, I suspect, will do just fine over the medium to long term because with the demise of The Sports Authority, there just aren’t that many larger, national big box competitors left (Academy has like 200 stores in 15 mostly southern states.  Who else?).  Dick’s ended their most recent quarter with 647 Dick’s stores.  They also own Golf Galaxy and have some Field and Stream stores I guess.

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Preparing for Long Term Market Ambiguity; Zumiez’s April 30th Quarter

I’ve generally been a supporter of Zumiez’s strategy and believe they’ve done most things right.  So when I see them suffering right along with everybody else in a difficult (not nearly a strong enough word) retail environment, it really brings home to me just what we’re dealing with.

The numbers first, then the strategic issues.

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Is Everybody Pursuing the Same Strategies? Deckers’ Year and Quarter

The quarter and year ended March 31st weren’t great for Deckers.  Mostly, you’ve probably noticed, they haven’t exactly been great for companies I’ve written about in general.  What somehow got my focus as I read Deckers’ 10-K was the continued and, indeed, increasing sameness of what all the public companies are saying.

Let’s start with a review of Deckers’ strategies and goals before we move on to the financial results including a look at Sanuk’s continuing problems as part of Deckers.

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Skullcandy Founder Rick Alden Considering Transaction to Take Skullcandy Private

Skullcandy filed a form 13D today with the Securities and Exchange Commission announcing that founder Rick Alden was going to explore a transaction to take the company private.  To be clear, that doesn’t mean it will go private.  Here’s the relevant section of the 13D.

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VF’s Quarter: It’s Not Easy for Anybody Out There

VF filed its 10-Q for the quarter ended April 2nd on May 10th.  The results, while in line with expectations, showed VF under the same kind of pressure other public companies are dealing with.  Even their action sports segment, where most of their growth has been coming from, experienced very modest sales growth and reduced operating income.

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Let’s Not Just Blame Amazon

The Amazon Effect is given a lot of blame for the lousy and, some say, deteriorating retail environment.  I gather it was a topic of conversation at the recently completed Surf Industry Summit at Cabo.

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