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 940 owned and licensed stores under the Quiksilver, DC, Roxy (young women's apparel), and Quicksilver Youth banners. In 2015 it filed for Chapter 11 bankruptcy protection for its US units.
Quiksilver distributes its surf-inspired apparel primarily to surf shops, skate shops, other specialty stores, and select department stores. It also owns and licenses about 940 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.
The majority of Quiksilver's company-owned and licensed stores are in Europe (about 300), followed by Asia/Pacific (285ish), and the Americas (100). In fiscal 2014 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.
Sales and Marketing
Quiksilver's products are sold in more than 100 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, hosting world-class boardriding contests, magazine and online ads, retail signage, television programs, surf camps, skate park tours, and social media. In fiscal 2014, Quiksilver spent $78 million on advertising and promotions, down from $93 million in 2013.
Quiksilver had been riding rising revenues until 2012. Since then, the tide has been falling. In 2014 the company reported a 13% decrease in revenue, from $1.8 billion to $1.6 billion, with all geographies and all sales channels except e-commerce showing drops. Net income has been trending down with revenue and it dropped another 33% or $77 million to $309 million as goodwill impairments, restructuring costs, and under-performing stores weighed on results. Cash flow has fluctuated like the tides and in 2014 it was low tide. It went from $27 million cash from operations the previous year to $27 million cash used in operations, a $54 million dip, due to higher costs as well as a decision to pay vendors in a more timely manner.
To grow sales and return to profitability Quiksilver has three long-term initiatives: strengthening its brands; expanding its business in emerging markets; and driving operational efficiencies throughout the business. The company has also invested in improving its e-commerce platform and growing its store network.
The company is also ltesting 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 in Venice, California.
Quiksilver 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. To help it focus, the company has divested non-core business to focus on its namesake, Roxy, and DC labels. Jettisoned brands include Surfdome (sold to SurfStitch), Mervin Manufacturing (sold to Extreme Holdings), and skateboarder Tony Hawk's Hawk Designs (sold to Cherokee).