HUNTINGTON BEACH, Calif. — Roxy, Quiksilver's surf-inspired junior brand that racked up $647 million in sales last year, is getting a big sister.
Next fall, Quiksilver will kick off a young contemporary line aimed at 18- to 24-year-olds who outgrew Roxy, as competitors in the action sports industry, such as Nike-owned Hurley, continue to boost the fashion quotient in their women's divisions. Roxy will skew even younger by introducing infants' clothing. In addition, Quiksilver aims to extend its roots out of board sports into a global arena with more general appeal.
"The biggest challenge is fast fashion," said Quiksilver president Bernard Mariette at Quiksilver's headquarters here.
Declining to disclose Quiksilver's investment and sales forecast for the new women's initiative, which will be sold under the name of the parent brand, Mariette is bullish that the 118 styles in the first collection — including a sheer top retailing for less than $100 that conjures a banker's shirt mixed with a peasant blouse, $89 gray-tinted skinny jeans and a $120 silk minidress — will attract women in their 30s and 40s.
"It has the potential to be as big as Roxy," he said.
Introduced in 1991, Roxy has entered new categories like fragrance and footwear and opened more than two dozen stores worldwide. Roxy already graduated to higher retail prices and more sophisticated styling with $78 jeans and $49.50 swing jackets. Quiksilver officials said Roxy's sales increased 18 percent from a year ago to make up a quarter of Quiksilver's total revenue of $2.36 billion in its fiscal year ended Oct. 31, 2006. Over the next two to four years, Roxy's sales are projected to reach $900 million, the company said.
In the fiscal third quarter ended July 31, Quiksilver said Thursday that it swung to a net loss of $7.9 million, or 6 cents a diluted share, on revenue of $612.8 million as expenses increased 15 percent because of a $13.2 million charge related to the acquisition of a minority stake in Roger Cleveland Golf Co. and other costs. In the year-ago period, the company reported net income of $5.3 million, or 4 cents a diluted share, on revenue of $525.9 million.Costing at least 20 percent more than Roxy with retail prices ranging from $34 to $128, the new young contemporary label is Quiksilver's second attempt at selling a higher-priced women's line. In 2000, it broke into the contemporary category with a label called Alex Goes. But that start-up was shuttered in a rough retail environment after the Sept. 11 attacks, when Quiksilver also decided to focus on Roxy.
Quiksilver learned important lessons from its foray into the contemporary market, such as how to handle inventory and conduct market research, said Steve Tully, president of Quiksilver brands in North and South America, who oversaw the launch of Alex Goes.
Quiksilver didn't give up completely. The company announced plans in August 2005 to launch a women's contemporary label, which would have included Roxy in the name and picked up where Alex Goes left off. Eyeing the 21- to 35-year-old market, Quiksilver intended to kick off the contemporary label last spring.
Eighteen months ago, Quiksilver changed tactics to focus on young contemporary because that age bracket offered more sales volume and a closer fit with the 15- to 25-year-old demographic in the men's business, said Erik Joule, a senior vice president. He projected that the U.S. will account for half of the young contemporary line's sales, with Europe at 45 percent.
By focusing on women between the ages of 18 and 24, Quiksilver can tap into a larger market. The NPD Group, a Port Washington, N.Y.-based research firm, said sales of clothing worn by 18- to 24-year-old women totaled $18.06 billion in the 12 months ended in June. In comparison, apparel sales for 13- to 17-year-olds reached $17.02 billion and those for 25- to 34-year-olds hit $17.7 billion.
Leading Quiksilver's push into young contemporary are vice president of design Summer Rapp and merchandising director Brittany Bourdeaux. Describing the young contemporary customer, Rapp, who started her career at Roxy before working at action sports company Volcom and contemporary label Ever, said, "She's definitely the Roxy girl grown-up. Our plan is to make these two brands coexist."
Bourdeaux, who was West Coast sales manager for Diesel and a merchandiser for Levi's, added the mantra for the new line is "buy now, wear now," as manifested in lightweight pieces intended for layering, such as soy-cotton sweaters and organic cotton twill jackets in forest green, charcoal and other subdued colors.
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