A marketing push for Oakley Inc.’s women’s sunglasses helped boost sales at the Foothill Ranch-based company in the first quarter.
Sales rose 7% to $152 million. That included a 12.3% increase in sales of optics, including the company’s first women’s collection and sales from Los Angeles-based Oliver Peoples Inc., which Oakley recently bought.
Still, the new shades didn’t offset higher operating expenses and lower margins, which contributed to an 80% decline in profits to $1.9 million.
Oakley is set to refocus on shades and scale back on clothing and shoes.
The company is on the right track, said Eric Beder, an analyst at Brean Murray Carret & Co.
He said the sunglass maker’s “integrated drive” to increases sales to women by rolling out new shades got off to a strong start.
“Unlike prior periods, when the company would just introduce a line with limited support, the women’s offering was a highly integrated campaign,” Beder said.
The push included a pre-advertising campaign to hype the line, a new display case, the creation of a women-specific Web site and new casing and packaging for the shades, Beder said.
“We believe this level of support and marketing muscle is new for Oakley,” Beder said.
Plus, Beder said Oliver Peoples, which focuses on high-end fashion sunglasses, “continues to gain higher traction in fashion-driven lines” and fill a “gaping marketing opportunity” that Oakley had little luck nabbing on its own.
The company also made a good move when it started promoting new sunglasses earlier in the year, Beder said. That allows for better planning and forecasting, stronger initial sales and improved manufacturing flow.
Don’t expect much hype around Oakley’s electronics category, which has “become a drag,” Chief Executive Scott Olivet said.
In the first quarter, the company said it posted “significantly lower sales” of electronics products, such as sunglasses that work with cell phones and play digital music.
The company’s Thump sunglasses debuted to lots of hype a few years ago. But interest has waned a bit for the sunglasses, which have a built-in digital music player.
“Oakley has now begun to take back material levels of product to refocus the selling effort for the category on a smaller store base that has the ability to offer a higher level of service and support,” Beder said.
Future electronics rollouts, such as the O ROKR sunglasses expected to hit later this year, will be “much less significant in terms of units and doors,” Beder said.
Oakley is developing O ROKR with Motorola Inc. The sunglasses have Bluetooth technology, which allows music and phone calls to be transferred to an earpiece.
Celebrity Pitch
More details have emerged on Newport Beach-based Heil Brice Retail Advertising Inc.’s work with client Los Angeles Convention and Visitors Bureau.
The shop plans to help expand the bureau’s “See my L.A.” advertising and marketing campaign.
The work uses the faces of 50 celebrities, including Diane Keaton, Lionel Richie, Jamie Lee Curtis and Melissa Etheridge. The work helps promote Los Angeles as the top spot for travel, conventions and meetings, Heil Brice said.
It includes print and Web advertising. Heil Brice also is designing marketing materials, such as posters at the Los Angeles International Airport and some Metro Red Line subway stations.
Heil Brice, which has about $94 million in annual OC capitalized billings, won the work in a formal review that started in December.
The L.A. Convention and Visitors Bureau picked Heil Brice because of its track record with other L.A.-based clients, including Los Angeles Times and the National Basketball Association’s Los Angeles Clippers, said Patti MacJannett, senior vice president of marketing at LA Inc.
In other news, Heil Brice recently broke billboard campaigns for Ralphs Grocery Co. and the Los Angeles Clippers.
Holiday Debut
The Action Sports Retailer Trade Expo is getting the word out about its next show, ASR Holiday, slated for May.
The tradeshow operator, owned by Chantilly, Va.-based VNU Expositions, said booths are sold out for ASR Holiday, which is set for May 31 to June 1 at Newport Dunes Resort in Newport Beach.
More than 100 makers of surf, skate and snow apparel are expected to show off clothing, hats and other garb that will be sold during the winter holidays.
Among those signed up: Huntington Beach-based Quiksilver Inc., Irvine-based Billabong USA, Irvine-based O’Neill Clothing and Costa Mesa-based Hurley International, a unit of Nike Inc.
ASR Holiday is a new show, which it launched after companies asked for something to help drive their year-end business, said Andy Tompkins, ASR group show director, in a statement.
Tompkins, who has been with VNU since 1996, took over as director in April.
He previously was show director of VNU Expo’s Outdoor Retailer Winter and Summer Market, and Fly-Fishing Retailer World Trade Expos. Tompkins replaces former group show director Kevin Flanagan.
The show is an opportunity to mingle with retail accounts. That’s something that Maria Barnes, vice president of swim and accessories for Quiksilver’s Roxy girls brand, said she doesn’t have time for during the hectic holidays.
In other news, ASR recently moved its offices to San Juan Capistrano from Laguna Beach.
