LOS ANGELES — Action sports apparel retailer Zumiez Inc. has signed an agreement to acquire Fast Forward, a mall-based retailer specializing in skateboarding apparel, accessories and hard goods. Financial terms were not disclosed.
Fast Forward, based in Fort Worth, operates 19 stores: 16 in Texas, one in California and two in Oklahoma. Zumiez, with headquarters in Everett, Wash., operates 180 stores and plans to convert the Fast Forward stores into Zumiez locations over the next 18 months.
Executives from both companies did not respond to requests for comment. But analysts said that the acquisition is strategically sound.
“Texas is a market that Zumiez has really wanted to target,” said Sara Hasan, financial analyst with McAdams Wright Ragan. “In the last year, they opened three stores in Texas and it was a new market for them at that time. They said that they wanted to eventually have 40 to 50 locations there, so this gives them a huge jump on that. It also gives them great access to consumers because people are already used to going to those stores for [similar merchandise].”
Zumiez said in a statement that it expects the acquisition to add 1 to 2 cents to earnings per share in 2006 and to be accretive to earnings per share by about 8 to 9 cents in fiscal 2007.
Sharon Zackfia, financial analyst with William Blair & Co., said her firm estimates that annual chain sales for Fast Forward are “in the $23 million to $25 million range,” and added, “for [Zumiez], we’ll add $14 million to our top line for the second half of the year and $24 million for the full year.”
Rick Brooks, president and chief executive officer of Zumiez, said in a statement, “Fast Forward’s culture and product offerings mesh extremely well with ours. We believe that this acquisition will help further our strengthening position in the youth market.”
Zumiez was founded in 1978 and went public in May 2005. The company on Wednesday raised its 2006 earnings outlook to 65 to 66 cents per share from 61 cents.