QUICKSILVER MAPS PLANS FOR GROWTH
Byline: Kristi Ellis
HUNTINGTON BEACH, Calif. — Quiksilver Inc. is riding high.
Coming off another strong year, Quiksilver executives revealed several new plans for growth to shareholders at the firm’s recent annual meeting, including expanding the superhot Roxy junior brand, launching a contemporary women’s sportswear line for spring 2001 and possibly starting in e-commerce.
Robert B. McKnight Jr., chairman and chief executive officer of the junior and young men’s company, told about 250 shareholders assembled at the company’s new 100,000-square-foot distribution and manufacturing facility here that the company was “retailing well.”
At the meeting, McKnight also pointed to five key areas for significant growth: Quiksilver young men’s, the hot Roxy junior brand, accessories, children’s wear and Raisins swimwear.
“Women’s is a big part of our present and future plans,” said McKnight. “Roxy is still a relatively new brand and has many opportunities for product extensions and development.”
The firm already had reported a 21.6 percent jump in earnings to $4.1 million for the first quarter ended Jan. 31, and sales up 16.3 percent to $99.9 million. There were sales gains of 18 percent in men’s and 15 percent in women’s. This followed a year when profits surged 48.3 percent to $26.7 million and sales gained 40.4 percent to $443.7 million.
Domestically, its women’s category, which includes Quiksilver Roxy, Teenie Wahini, Raisins, Leilani and Radio Fiji brands, climbed 56.8 percent to $108.7 million for the fiscal year ended Oct. 31.
The company, which operates a Roxy store in Hawaii, plans to open one in South Coast Plaza in July. If it succeeds, Quiksilver could open several more Roxy stores in the next couple of years, said Randy Hild, vice president of the Roxy division, in a post-meeting interview.
Roxy could reach $150 million to $200 million in the next two to three years, Hild said.
“We don’t have extreme growth scheduled for it this year, more like 20 percent growth,” he said. “Sportswear is the one category that drives the product, and we have to make sure that it doesn’t turn into an accessories-driven line or a licensed products label.”
McKnight noted that Roxy, which hovers at around $100 million, is growing fast in Europe, where it does about $20 million. That’s the size the U.S. Roxy business was in 1996.
“Europe is in the life cycle we were in five years ago,” said McKnight. “They are only a $20 million division now, but it will be $100 million in a couple of years.”
Women’s sales internationally surged 106.6 percent to $19.5 million in the year.
McKnight revealed more details to shareholders about the previously reported new women’s contemporary line, which is still unnamed.
He said the contemporary line, which will launch in late July, will have a target age range of 20 to 40 years old.
“We believe that this line, which will be led by Lissa Zwahlen (the designer formerly behind Roxy) could be a $20 million to $50 million business in five years,” McKnight said.
Hild said the first collection would include 30 pieces. “Lissa’s concept is to do 30 pieces that you can take with you on a vacation.”
He added that the firm would target a selected account list of 100 to150 stores to launch the line.
Another of the company’s key plans is the possible development of an e-commerce site in the next couple of years, McKnight told shareholders.
“We are developing our own philosophies about selling directly to the consumer on our own hosted Web site,” said McKnight.
Quiksilver relaunched its Web site a month ago for marketing purposes. The company has also aligned itself with retailers like Macy’s West to sell Quiksilver products on their Web sites.
McKnight told the group the next step would be to launch a business-to-business site, which would give retailers the opportunity to see the whole product line and reorder online.
E-commerce is the third phase of its Internet strategy.
“We are sensitive with e-commerce because we are committed to our tried-and-true, brick-and-mortar stores,” said Randy Hild, vice president, in an interview after the meeting. “With that in mind, we aren’t going to jump into e-commerce.
In another development, Quiksilver announced that the board had approved a stock repurchase plan of up to two million shares. To date, the company has repurchased about 180,000 shares, said Steven Brink, chief financial officer.