Foothill Ranch-based Oakley Inc.’s tweaks are starting to play out in stores.
There are new displays and packaging for women’s sunglasses and plans for more sports shades. Oakley’s clothing line has been streamlined. In some stores, sunglasses have replaced shoes.
Behind it all: stepped up advertising.
So far so good, said analyst Eric Beder at Brean Murray Carret & Co.
The company is “highly focused on even further shifting its operational and marketing message” to sunglasses, Beder said in a June report.
“Oakley management has never been more strategic in how to maximize the company’s key strengths,” he said.
The moves are part of a strategy by Chief Executive Scott Olivet to play up sunglasses,Oakley’s bread and butter,while tweaking the company’s smaller, and sometimes struggling, clothes and shoes.
Olivet and other executives recently briefed analysts on changes the company planned to make to boost sales of sunglasses. In the first quarter, sunglasses made up 71% of Oakley’s $152 million in sales, up from 68% a year earlier.
“Optics is our greatest competitive strength and our most underutilized asset,” Olivet told analysts.
Olivet, who joined Oakley in October, made two quick moves early this year to boost glasses, buying Los Angeles-based Oliver Peoples Inc. and Aliso Viejo-based Optical Shop of Aspen, two upscale glasses sellers.
Now the company is turning to marketing.
Next year, Oakley plans to launch a “O Rolling Lab” truck that visits events and shows off the company’s products and how they’re tested.
Oakley’s Web site is getting overhauled and is set to debut by the holidays. The site is set to focus on athletes who wear Oakley sunglasses.
More Ad Spending
The company plans to keep pushing new products with heavy advertising and public relations. The company’s selling expenses grew by $4.8 million from a year earlier to $46.3 million in the first quarter, mainly because of more advertising spending.
The stepped up marketing worked for the company’s debut of women’s sunglasses earlier this year, Beder said.
Oakley created a women’s Web site and special packaging and display cases, he said.
The efforts “represent a refreshing change for a company that many times seemed to be somewhat schizophrenic in its product focus and communications,” Beder said. “The results have been probably the fastest-selling rollout in Oakley history and a vivid demonstration of the power of the company’s brand when the marketing message is properly honed.”
Oakley still has work to do.
The company wants to get a bigger piece of the sports market.
Jocks regularly wear Oakley sunglasses and goggles. But the company hasn’t come out with a sports model since 2002. That’s when the Half Jacket debuted, a blade-style shade with interchangeable lenses that’s hot among golfers and other athletes.
Sports glasses are in the works, according to Oakley.
This fall, the company plans to offer goggles for women. Due next year: the Half Jacket 2.0 for men and women; a yet unnamed pair of sports sunglasses with interchangeable nose pieces and other features; and more polarized lenses for women’s sunglasses.
For the holidays, Oakley plans to sell a new set of sunglasses with a digital music player, Thump Pro. It’s set to be marketed to athletes.
Oakley’s line of sunglasses that buyers can customize is getting a boost. The line now counts five styles that customers can give their own twist to, such as different lenses or color “O” Oakley logos. The line is set to add an additional five styles, the company said.
Meanwhile, Oakley continues to revamp its shoes, clothes and accessories.
Sales of those dropped 9% in the first quarter from a year earlier to $37 million. They represent about 24% of the company’s sales.
Oakley started retrenching earlier this year, nixing most of its shoes to focus on sandals, boots and golf shoes.
The company cut the number of stores it sells at to focus on “key accounts with a larger presence.” The company also shifted workers from shoes to glasses. Some shoe displays in stores now feature sunglasses.
Clothes saw their own changes. Oakley cut several products, including some knit tops and denim, and expanded surf trunks and jackets made of synthetic material.
Oakley also is moving on plans to put the bulk of its 110 mall stores under its Sunglass Icon chain in the next year or so.
