Quicksilver Inc. is joining the legions of apparel and retail companies going on a capex diet.
This story first appeared in the January 5, 2009 issue of WWD. Subscribe Today.
The Huntington Beach, Calif.-based surfwear specialist said in its annual report, filed with the Securities and Exchange Commission last week, that it plans to reduce capital expenditures in the current fiscal year to between $60 million and $70 million, funded “primarily from our operating cash flows and our credit facilities.”
The projected amount is down from $93.7 million in 2008, when investment increases were channeled to company-owned stores, warehouse equipment and computer systems.
Quiksilver also disclosed that, during the first quarter ending this month, it expects to incur a pretax loss of $150 million on its November disposition of the Rossignol business, offset in part by a tax benefit of about $91 million.
Quiksilver bought Rossignol in 2005 for about $320 million, but sold it to Chartreuse & Mont Blanc for $50.8 million, with $12.7 million of the amount coming in the form of a seller’s note. The original sale price of about $147 million, agreed upon in August, was cut by nearly two-thirds following the arrival of the global credit crisis in mid-September.
Hurt by impairment charges and results from the discontinued Rossignol operation, the firm lost $226.3 million last year as revenues advanced 10.6 percent to $2.26 billion.