Quiksilver Planning 10 U.S., 20 European Stores This Year
By JENNIFER BELLANTONIO
Huntington Beach-based Quiksilver Inc. plans to keep opening stores throughout its divisions in 2002,albeit at a slower pace than first thought.
The maker of surf, skate and snow apparel counts about 260 stores, mostly in Europe. Robert McKnight, Quiksilver’s chief executive, told analysts and investors at a recent conference at the Block in Orange, that the company plans to add 30 more this year.
Quiksilver said it plans to open 10 company-owned stores in the U.S. The remainder of the new outlets are set to be licensed stores in Europe, which the company said is faring better than the U.S. right now. Currently Quiksilver counts 42 company-owned stores, 19 in the U.S. and 23 in Europe. The rest of the 260 outlets are licensees of the Quiksilver name.
Sept. 11 and the slowing economy have tempered Quiksilver’s plans, according to Steven Brink, its chief financial officer.
“We scaled back the plan in the U.S.,” Brink said. “As soon as we started to assess the effects of Sept. 11 we held at 10 (U.S.) stores for (this) year. We stopped looking for new locations at that point.”
Quiksilver may reassess its plans if the economy improves, Brink said.
The bulk of the new stores are set to be Boardriders Clubs,specialty stores carrying just Quiksilver products. The company also has stores for its Roxy and Hawk Clothing brands (two new Hawk stores are slated for Chicago and Los Angeles).
There’s also Quiksilver Youth, a relatively new store for the company. One youth store opened in Fashion Island last year, and two are slated for Orlando, Fla. and Pleasanton, Calif. this year.
“Of course our expectations are down, but the stores have done pretty well,” Brink said. “The stores came back fairly strong in December.”
Locations in “straight American tourist markets,” such as Paris, London and Hawaii, where travel patterns still haven’t returned to normal levels, are off, according to Brink.
Quiksilver plans to focus on the retail side of its Roxy division, which has a lot of room for growth, according to McKnight. The company has about a dozen Roxy stores.
“There are still additional products to add in this category,” he said.
In a December report, A.G. Edwards Inc. analysts Mitchell Kummetz and James E. Vasser said the company’s “fourth quarter sales were driven by Quiksilver’s European business, particularly Roxy.”
Quiksilver’s fourth-quarter sales were up 12% to $170.2 million.
“The Roxy brand continues to enjoy a resurgence, and even though a host of other surf brands have entered the juniors market in the last few years, Roxy continues to dominate that marketplace,” the analysts wrote.
Roxy is a $40 million yearly business in Europe that should double in the next few years, the analysts said.
But sales of juniors clothes at specialty stores are showing signs of slowing, the analysts said, which could impact Roxy’s growth.
“On the other hand,” they said, “Roxy is still without much department store penetration, and that channel remains the best growth opportunity for the brand.”
Quiksilver has put its new Alex Goes women’s brand on hold since Sept. 11 to focus on Roxy, according to McKnight. He said the brand was well received but wasn’t expected to grow this year like Roxy has.
Plus, he said, the line’s designer had a baby and went on maternity leave.
“We intend to bring (the Alex Goes line) back next spring or summer,” McKnight said.
