JIM JANNARD
Chairman, chief executive, Oakley Inc.
A year ago, Oakley Inc. was at odds with itself.
Then-chief executive William Schmidt, a former Gatorade marketing executive, wanted to put the kibosh on the Foothill Ranch-based company’s money-losing footwear effort. Founder and Chairman Jim Jannard refused to drop the line.
So Schmidt left in October 1999, taking with him a $800,000-plus severance package. After having stepped back from Oakley’s daily operations, Jannard returned to the helm of Oakley,an unenviable position back then.
At the start of 2000, Oakley’s stock was trading at around 5 after a yearlong slide. The company’s footwear line was draining profits. In the fourth quarter of 1999, the company took a $12.6 million charge before taxes to restructure the footwear unit, which faced big competition from archrival Nike Inc.
Jannard, a cigar-smoking, straight-talking USC dropout, made a big bet on his ability to turn Oakley around. Back in December 1999, he bought 200,000 of the company’s shares at around 5, a stake worth about $1 million then. By the end of 2000, Jannard’s bet was worth nearly $3 million.
In the past year, Jannard has overseen a rejuvenation of Oakley that’s played out on Wall Street. The company’s shares have turned down recently with a larger slump in retail stocks. But late last month, the stock still was up 180% for the year. The company designs and makes trendy sunglasses, sportswear, footwear, watches and accessories.
To the amazement of some formerly disgruntled shareholders, Oakley saw its market capitalization surpass the $1 billion mark for a time last year. As of late December, the company’s market value stood at $990 million.
Jannard declined to take credit for Oakley’s turnaround when told he was among the finalists for the Business Journal’s businessperson of the year.
“My vote’s for the other guy,” Jannard said via e-mail. “The 1,500 worldwide Oakley employees are the ones who contributed to making this a banner year.”
For the nine months ended Sept. 30, Oakley saw sales increase 41% to $270 million from the year-ago period. Net income soared 85% to $41 million. In the third quarter, Oakley’s footwear division reported $4.7 million in sales and its first-ever profit.
For the fourth quarter, Oakley officials say they are comfortable with a consensus earnings estimate of 11 cents per share, vs. 8 cents a share in the year-ago period.
Jannard is credited with motivating employees and pushing for the expansion of apparel lines and other new products in 2000.
“I have know Jim for 20 years and one should never underestimate this guy,” said Alan Gibby, president of sports footage producer DynoComm Productions Inc. in San Clemente. “Time and time again he shows me that when he puts his heart and soul into something,watch out,because it will be successful.”
In December, Oakley leased a 118,000-square-foot warehouse and shipping facility in Ontario for the company’s footwear and apparel lines. As of last month, Oakley’s footwear and apparel backlog was $18.9 million, up from $3.7 million in late 1999.
Oakley glasses got some prominent exposure at the Summer Olympics. Nearly a year before the 2000 games in Sydney, Oakley purchased its Australian distributor and saw sales Down Under nearly triple in 2000 from 1999.
The company was on the silver screen last year with actor Tom Cruise donning Oakley’s shades in “Mission: Impossible-2.” Oakley glasses also showed up in the movie “X-Men.”
Jannard oversaw the growth of Oakley’s online business in 2000, which did a respectable $5 million in sales last year even as online retail sites were suffering.
The 50-year-old Oakley founder has invested some 25 years in the company, which got its start as a motorcycle grip maker. Jannard also is Oakley’s largest shareholder with a 60% stake, the value of which grew from about $200 million a year ago to about $600 million now.
Jannard splits his time between his private island home in Washington and Newport Coast, where he reportedly paid $7 million for his home there. n
