Quiksilver rides the wave of youth appeal. It caters to the young and athletic with surfwear, snowboardwear, sportswear, and swimwear sold under the Quiksilver, Roxy, Hawk, Lib Technologies, and Gnu names. Quiksilver owns the DC Shoes brand of footwear and apparel for young men and juniors. It sells its apparel, footwear, and accessories in specialty and department stores worldwide, including Zumiez, Nordstrom, Dick's Sporting Goods, El Corte Ingles, Galeries Lafayette, and Macy's. The retailer boasts about 830 owned and licensed stores under the Quiksilver, DC, Roxy (young women's apparel), and Quicksilver Youth banners. Quiksilver has expanded its products to include eyewear, watches, and personal care items.
The majority of Quiksilver's company-owned and licensed stores are in Europe, followed by Asia/Pacific, and the Americas. In fiscal 2012 (ends October) more than half of the company's sales were generated outside the US. The firm's European headquarters is in France, while its Asia/Pacific headquarters is located in Torquay, Australia.
Quiksilver distributes its surf-inspired apparel primarily to surf shops, skate shops, other specialty stores, and select department stores. It also owns and licenses retail stores under its three core brands: Quiksilver, Roxy, and DC. Its Quiksilver Entertainment subsidiary produces programming that covers company-sponsored boardriding events, while also promoting the boardriding (and hence Quiksilver) lifestyle.
The company operates through several segments: the Americas, EMEA, and APAC. The Americas comprises North, South, and Central America and includes revenue primarily from the US, Canada, Brazil, and Mexico. The EMEA segment consists of Quiksilver's Europe, Middle East, and Africa business and includes revenue from continental Europe, the UK, and South Africa. The company's APAC segment covers Australia, New Zealand, and Asia, and generates sales primarily from Australia, Japan, New Zealand, and Indonesia.
Sales and Marketing
Quiksilver's products are sold in more than 90 countries through wholesale customers, retail stores, and through e-commerce. It wholesales its products to major markets with the help of 300-plus independent sales representatives supplemented by an employee sales staff. The company uses more than 150 local distributors in smaller markets.
To connect with its youthful audience, Quiksilver's advertising efforts include sponsoring athletes (including skateboarder Tony Hawk), world-class boardriding contests, magazine and online ads, retail signage, television programs, surf camps, skate park tours, and social media. In fiscal 2012, Quiksilver spent $111 million on advertising and promotions, down from $124 million in 2011.
The company logged a 3% rise in net revenue in fiscal 2012 (ends October) as compared to 2011. Quiksilver points to the Americas and APAC segments for the gains, partially offset by revenue declines in the EMEA segment. Low double-digit percentage growth across all three core brands -- Quiksilver, Roxy, and DC -- boosted the Americas, as well as growth across all three distribution channels, particularly within the wholesale channel. Net revenues in the EMEA segment rose by low double-digits from DC revenues largely offset by high-single digit percentage declines in Quiksilver and Roxy revenues. The decline in net revenues in the EMEA segment in fiscal 2012 was almost entirely due to unfavorable changes in foreign currency exchange rates.
To grow sales and return to profitability Quiksilver has three long-term initiatives: strengthening its brands; expanding its business; and driving operation efficiencies throughout the business. After initially cutting jobs and instituting better sourcing practices early in the recession, the company in late 2010 took steps to convert its short-term debt to long-term to become more liquid and continue its relatively aggressive store expansion plans. (The debt restructuring was aided by investor group Rhone, which owned about 30% the company.)
The company is also looking at a new store concept which includes all its hard and soft goods and all brands under one roof. Test stores have opened in Europe and one is planned for Venice, California.
Quiksilver also has ventured into personal care products -- a relatively new niche for the company -- for its namesake and Roxy lines. Through an exclusive worldwide licensing agreement, Inter Parfums develops and distributes Roxy fragrance, sun care, skin care, and related items, as well as Quiksilver sun care and other products through 2017.
Going forward, Quiksilver faces increased competition from athletic footwear and apparel giant NIKE, which is stepping into the action sports industry.
Affiliates of Rhone Capital III own about 30% of Quiksilver's shares.