Zumiez's young customers like to zoom. The fast-growing retailer outfits action sports enthusiasts, offering apparel, footwear, accessories, and sports equipment for 12- to 24-year-olds who enjoy board sports, BMX biking, and surfing. It stocks such brands as Billabong, Burton, Quiksilver, Vans, and Spy Optic, as well as private-label goods. Zumiez operates about 500 mall-based stores across North America and in Europe, as well as an online store. Aside from the usual action sports merchandise (hoodies and puffy skater shoes), stores also feature couches, video games, and sales clerks who really use the gear -- all designed to encourage shoppers to chill. Zumiez was founded in 1978 by chairman Thomas Campion.
Zumiez operates about 475 stores in some 40 US states, and another 20 stores in Canada (seven in Ontario, three in British Columbia). California, Texas, and New York are the retailer's largest market, accounting for about a third of its stores. In Europe, a new market for the retailer, the company operates stores under the name Blue Tomato.
In addition to its fast-growing retail store chain, Zumiez sells merchandise online and provides content and community for its young customers. E-commerce sales accounted for more than 7% of the company's sales in fiscal 2012 (ends January).
Sales and Marketing
To increase brand awareness and strengthen its connection to its customers, Zumiez participates in various music and local sporting events that embody the action sports lifestyle. The Zumiez Couch Tour is a series of entertainment events that includes skateboarding demonstrations from top professionals, autograph sessions, competitions, and live music. In fiscal 2012 (ends January) the Couch Tour completed a 12-city tour of the US. Zumiez also advertises in magazines popular with its target market, and sponsors interactive contests and maintains a presence on various social network channels, such as Facebook and Twitter.
Zumiez's fiscal 2012 (ends January) sales increased 16% vs. the prior year, while net income grew by 54% over the same period. The double-digit uptick in sales and profits was driven by the addition of more than 40 new stores, including the retailer's first in Canada, and a 9% rise in sales at stores open more than one year. Footwear, men's apparel, accessories, and junior's apparel posted increases in same-store sales, while hardgoods and boy's apparel declined.
Indeed, thanks to its rapidly-expanding retail store network, Zumiez's sales have quintupled over the past decade, and the chain is consistently profitable.
Growth is the mantra at Zumiez. The company has made great strides in extending its retail network, adding about 250 stores since the end of fiscal 2005 (ends January). In fiscal 2012 the chain entered the Canadian market and has since made an acquisition in Europe. Going forward, the chain plans to open about 50 new stores, including 10 more in Canada, in fiscal 2013, and grow its online sales. In the US the chain is adding stores in existing and new markets.
To that end, in mid-2012 the company acquired Blue Tomato, a multi-channel action sports retailer based in Austria, for €59.5 million ($78 million). Blue Tomato operates five stores in Austria, as well as an e-commerce site serving the broader European market.
Founder Campion owns about a 16% stake in Zumiez, while CEO Richard Brooks holds 12% of the shares. The investment firm T. Rowe Price Associates owns about 16%, while Waddell & Reed Financial Services owns 8% of the company.