About a decade after moving its headquarters out of San Clemente, Skullcandy Inc. has returned to Orange County with a new West Coast office and a locally based CEO.
The Utah-based headphones maker last month moved into a 4,500-square-foot office in Costa Mesa on Randolph Avenue, behind The Camp retail center.
The new satellite office marks the first step in the company’s renewed focus on supporting a particular group of wholesalers: core boardsports shops.
Chief Executive Brian Garofalow, who joined the company in January and lives in Irvine, believes that pivoting back to these core surf, skate, and ski stores with exclusive product lines is the trick to getting Skullcandy back on the growth track.
“For us, where we want to go fuel the brand and invest our marketing dollars is really in the specialty industry,” Garofalow told the Business Journal.
Segmentation
Garofalow, whose 20-year marketing executive career includes stints at Boardriders, RVCA and DC Shoes, was tasked to bring “some newness to the brand” as its CEO, he said.
Skullcandy was founded in 2003 and sold its headphones, earbuds, and speakers in smaller, specialty shops around the country before branching out to big-box retailers such as Target and Best Buy.
The consumer electronics company has since built multiple global distribution channels over the last 20 years, but Garofalow wants to refocus on the specialty accounts that have recently lacked attention.
“What maybe we hadn’t done a great job of over the past several years is give them special products and a reason for the consumer to come into their stores, to want and buy Skullcandy,” Garofalow said.
The CEO plans to provide core shop owners with exclusive products like limited-time designs or collaborations that will not be sold in big boxes.
“Segmentation is all about putting the right product in the right channel and ideally, to reduce competition among our retailers and channels,” Garofalow said.
He said that Skullcandy had not executed a good segmentation strategy when it entered the big-box retailers. There was no reason for consumers to visit the specialty shops if they had access to headphones everywhere else, he added.
The company’s first exclusive collection will be a special series of headphones, earbuds and mini speakers with a limited-edition camouflage pattern dubbed Acid Snow Camo to launch in November.
Local shops with access to this product include Jack’s Surfboards, Active Ride Shop, Surfside, The Fort, Green Room OC and others.
The products range in price from $25 to about $230.
“If we can create the right product that Walmart consumers want and put it in Walmart, and the right product that a skateboard consumer wants and put it in the skate shop, we’ve done a great job,” Garofalow said. “As long as we can service both of those retailers and consumers.”
Satellite Office
Costa Mesa is the first Skullcandy satellite office to open since 2017, and another regional office will debut soon in Melbourne, Australia. The company signed a five-year lease for the local space.
The electronics maker also has hubs in London, Shenzhen and Vancouver.
Skullcandy left San Clemente in 2013 in order to consolidate its business presence to its headquarters in Park City, Utah. In 2016, Skullcandy was acquired by Connecticut-based firm Mill Road Capital Management LLC for almost $200 million.
Around that time, the company’s revenue was in the $250 million range. The company doesn’t disclose its current revenue.
The local satellite office will be the base for half a dozen Skullcandy employees for now, including Garofalow, who makes his way back and forth from OC to Park City. There are currently over 100 companywide employees.
The office will also serve as a creative hub for the company’s surrounding retail partners with a content studio with photo and video equipment, a gaming lounge and other creative spaces. A retail store is in the works as well.
“Our space is your space,” Garofalow said at the opening event.
“We’re here to stay for a meaningful amount of time and to support Orange County and local businesses,” Garofalow said.
Orange County Trust
Skullcandy Inc. Chief Executive Brian Garofalow is not the only new addition to the electronics company’s leadership team, nor is he the only executive with a background in Orange County business.
The company’s newest Chief Financial Officer Adam Ainbinder was the CFO at Huntington Beach-based TravisMathew before switching companies several weeks ago.
The group’s newest Vice President of Product, Dave Appel, hails from Huntington Beach-based Boardriders and Oakley eyewear.
Vans former Brand President Doug Palladini has joined Skullcandy’s board of advisors, after departing the Costa Mesa-based shoe and apparel firm last year. Bill Bussiere, a former chief financial officer for many apparel brands such as Billabong, Fox Head, La Jolla Group, Quiksilver, is now an executive advisor as well.
“We want to give you a good sense of trust that you’ve got the right people behind the brand to do right by your shops and your consumers,” Garofalow shared with local retailers attending the Costa Mesa office opening.
