Elvis is still Alive

Elvis is still Alive, originally uploaded by pat_the.

Street hungry

Street hungry, originally uploaded by pat_the.

NIke, Burton, VF Corp, Quiksilver & Others Face Patent Infringment Claims In Court

According to a story on Courthouse News, several leading action sports manufactureres are among the dozens of brands being charged by Tec-Technology Enabled Clothing, Inc. with patent infringement. The complaint against these companies stems from their use of “wire management capabilities for portable electronic devices” in jackets.

Here are all of the defendants in the federal complaint:

American Recreation Products Inc.; Banana Republic Inc.; Bergan of America Inc.; Bonfire Snowboarding Inc.; The Burton Corporation; Calvin Klein Inc.; CMW Inc.; Coalision U.S.A. Inc.; Collective Licensing International LLC; Columbia Sportswear USA Corporation; Coupounas LLC; David Peyser Sportswear Inc.; Eddie Bauer Inc.; FNC Kolon USA Corp.; Helly Hansen (U.S.) Inc.; Hugo Boss Fashions Inc.; Ibex Outdoor Clothing Incorporated; J.C. Penney Corporation; LaFuma America Inc.; L.L. Bean Inc.; Marker Volkl USA Inc.; Marmot LLC; Nike Inc.; Nikita Clothing USA Inc.; Polo Ralph Lauren Corporation; Quicksilver Americas Inc.; Rossignol Ski Company Inc.; Sport Oberneyer LTD.; Spyder Active Sports Inc.; Tahsin Industrial Corp. U.S.A.; The Timberland Company; Under Armour Inc.; and V.F. Corporation.

Tws
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Rossignol Plans 30% Workforce Cut

French ski equipment maker Rossignol said Friday it would slash its global workforce by 30 percent in a bid to return to profitability after posting losses in 2008.

The group, which made an operating loss of 58 million euros (77 million dollars) last year, is to cut about 450 jobs in total.

Company chairman Bruno Cercley said in a statement that the layoffs were "unavoidable," adding that the group was "determined to get back into balance in the next two years."

The group is the maker of Rossignol and Dynastar skis, but also produces bindings and boots.

www.france24.com

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Fuctup Piano

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Fading Shades

Fading Shades , originally uploaded by pat_the.

Light me

Light me , originally uploaded by pat_the.

Gazebo Montreal

Gazebo Montreal, originally uploaded by pat_the.

Spring is FinAlly here in Montreal , we had a pretty ruff winter! . Next step is that are hockey team wins the Stanley cup.

Bread Ticket

Bread Ticket, originally uploaded by pat_the.

Climate Change and Arctic Impacts

Climate change and its effects in the Arctic may be the most serious environmental issue threatening the Arctic environment. Average annual temperatures in the Arctic have increased by approximately double the increase in global average temperatures. It is beyond dispute that human activities are causing global warming, as even the U.S. government now admits. The direct impacts of global warming include higher temperatures, sea-level rise, melting of sea ice and glaciers, increased pre-cipitation in some areas and drought in others. Indirect social, environmental, economic and health impacts will follow, including increased death and serious illness in poor communities, decreased crop yields, heat stress in livestock and wildlife, and damage to coastal ecosystems, forests, drinking water, fisheries, buildings and other resources needed for subsistence.

During the past several decades, the Arctic has warmed at an alarming rate, and it is projected to continue to warm by as much as 18 degrees Fahrenheit by 2100.(3) This warming trend has had a devastating impact on Arctic ecosystems, including sea ice, permafrost, forests and tundra.(4) Warming has contributed to increases in lake temperatures, permafrost thawing, increased stress on plant and animal populations and the melting of glaciers and sea ice. Research has revealed decreases in both sea ice extent and cover.

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GreyMontreal

GreyMontreal , originally uploaded by pat_the.

Building tree

Building tree , originally uploaded by pat_the.

New Sixth-Sense Technology

Really Cool, New Sixth-Sense Technology - Watch more Funny Videos

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EuroSIMA Study Shows Trend Toward Online Purchasing Habits

European boardsport consumers are purchasing a large amount of their gear online, according to a September 2008 study on consumer trends conducted by the EuroSIMA Cluster, a network of private and public boardsport companies in South West France.

Here is a complete outline of what the study reported:

Boardsports consumers purchasing habits

The EuroSIMA Cluster has conducted last August-September 2008 (in collaboration with the ARCANE Institut agency) a consumer research study on consumption trends of boarsports gear (surf/skate/snowboard), based on a representative sample of 4200 persons of 15 to 35 years-old across seven countries in Europe (France, Germany, Italy, Portugal, Spain, Switzerland, the United Kingdom).

This unique European internet study provides the freshest insight about the boarsports consumers’ profile, their hobbies, their sports participation, their buying habits, their purchasing motivations…

After a first wave of information released last February, the EuroSIMA Cluster reveals today new figures on the consumption habits of the 15-35 years-old.

Purchasing channels for boardsports products
Signs clearly show that boardsports gear consumers are becoming cyber-consumers.

• Even if most of boardsports articles are bought in general sports stores (34.4%), or in specialized shops (26.6%), online purchase is becoming widespread (26%).
• Internet is the first channel used in the UK (38.3%) and in Germany (35.1%) in order to purchase boardsports articles, but is not really used buy Portuguese shoppers (11.3%) who widely prefer general sport stores (46.9%).
• Females buy boardsports articles in general sports stores (36.5%) slightly more than males (32.5%).
• On the other side, males use the internet slightly more than females for buying boardsports articles (26.5% vs. 23.3%).
• Those practicing boardsports buy sports articles in general sports stores (29.4%), on the Internet (28%), or in specialized shops (27.7%).
• Internet is by far the first channel used in the UK (40.9%) and in Germany (36.3%), and is widely used across other countries except in Portugal (14%) whose shoppers prefer general or specialized sports stores.

Types of websites used for boardsports products online shopping
Online shopping sites such as private-public sales, EBay…, are one of the fastest growing sectors on the internet today.

• Online shopping sites (45.7%) are websites the most commonly used for purchasing boardsports articles by those using the Internet for their purchases.
Then, the most common online sources are specialized boardsports sites (24.4%), surf brands sites (14.8%), and mail order sites (14.8%).
• Specialized boardsports sites tend to be slightly more popular with males (25.7%) than female (22.8%) and with those aged 15-25 (26.6%) than the older group (22.3%).
• Online shopping sites (43.5%) are websites the most commonly used for purchasing boardsports articles by boardsports participants using the Internet for their purchase.

Key factors when shopping for boardsports products

• For the majority across countries, the brand (65.1%) is declared more important than the price (7.3%).
The brand is relatively more important than the price for females and for those aged 26-35.
It is also the case for those practicing boardsports.
• Shops and brands fame are important for all countries.
In Germany, Portugal and Switzerland the shop reputation is more important whereas it is the other way round in France, Spain and the UK.
For boardsports participants, shops and brands fame have the similar importance.
• In all countries (except Portugal), consumers are inclined to switch brands rather than buying the same.
The study reveals that males are slightly more inclined to switch brands than females.
It is also the case for boardsports participants.
• When shopping for boardsports products, impulse motivates customers much more than need.
This tendency is even more evident with boarsports participants.

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Burton Reports Salary Cuts, 5% Staff Layoffs

Burton announced today that it will reduce salaries in North America from the top down and will lay off five percent of its North American staff, according to a statement issued by the company. Owners Jake and Donna Burton have chosen to eliminate their own salaries, and company employees who have the highest pay will be subject to the largest salary cut, according to the company statement.

Read the entire press release below:

BURLINGTON, Vt. (March 25, 2009) — Burton today announced that due to the challenging global economic situation, the company must cut its annual spending by reducing salaries in North America from the top down and laying off a small percentage of its North American staff. Burton is the world’s leading snowboard company and owns other top boardsports brands, including Channel Islands Surfboards, DNA Distribution (Alien Workshop and Habitat Skateboards), Analog, Gravis, ANON and R.E.D.

“This has been a very painful process for us, and considering the global economic situation, we’ve done everything in our power to save as many jobs as possible,” says Burton CEO Laurent Potdevin. “Our goal this entire year has been to cut as many costs as possible on a global level, like sales meetings, travel and new hires so that we could avoid cutting people. Instead of a much larger number of layoffs, we decided to take a different approach, which is temporarily reducing salaries on a sliding scale from 0-15% for employees in North America.”

Burton owners Jake and Donna Carpenter have chosen to eliminate their own salaries. Burton employees who have the highest salaries will face the biggest percentage of pay cuts, while employees who make less will experience smaller cuts. In order to save even more jobs, Burton has cancelled all bonuses and merit increases for North America this year and temporarily reduced the company’s 401K match from 4% to 1%.

In addition to salary reductions, Burton laid off less than 5% of its staff in North America, bringing the company’s total headcount in North America to 663. After staff reductions, Burton currently employs 418 employees at its headquarters and factory in Vermont, 17 employees at DNA Distribution in Ohio and 154 employees at its California offices. Globally, Burton employs 962 people.

Cost reductions across all brands were necessary because Burton is by no means immune to the global economic downturn, which worsened at an unprecedented pace during the company’s prime business season. However, as the global market share leader in snowboarding and with strong brand recognition around the world, Burton is well positioned to weather the economic storm.

“The shareholders at Burton are my wife Donna and myself,” says Jake Burton Carpenter, Founder and Chairman of Burton. “Our goals for Burton are not short-term, but the long-term prosperity of our brands, boardsports and the people involved. Donna and I want to thank our dedicated employees for their contribution to the company’s cause through a temporary pay reduction. The bottom line is that their sacrifice is preventing a far more significant layoff and will allow us to come out of this economic downturn stronger than ever.”

www.burton.com
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Curtain Blue

Curtain Blue, originally uploaded by pat_the.

Shooz 10 bucks

Shooz 10 bucks, originally uploaded by pat_the.

White Cugarette and excuse me a yellow wall

White Cugarette and excuse me a yellow wall , originally uploaded by pat_the.

Bonjour c'est moi Ramones

Bonjour c'est moi Ramones, originally uploaded by pat_the.

Active Ride Shop Files For Chapter 11 Protection

Active Ride Shop announced today that is has filed for a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the county of Riverside.

As of today, Active Ride Shop’s official Web site only lists 22 open stores under its retail locations section. Here’s an excerpt from the official press release:

“Mira Loma, CA, March 23rd, 2009 - Active Ride Shop today announced that it has filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in Riverside. The company is focusing on executing a comprehensive corporate restructuring plan without interruption to business operations.

As previously announced, the company has closed 8 under-performing retail locations. This week, the company took action to realign its corporate support structure alongside the smaller store base, which will include 21 retail stores as well its e-commerce storefront. The store closings and corporate workforce reductions will result in combined workforce compensation and related costs in excess of 30%. Further, as part of its restructuring efforts, the company will continue to evaluate the productivity of all assets, analyze additional cost-cutting initiatives and research strategic alternatives to maximize the value of the business.

John Wallace, chief executive officer and founder of Active Ride Shop, said “The swift and dramatic downturn in the local economy had a major impact on our business in the 3rd and 4th quarters of 2008. In combination with the robust growth and expansion we experienced during the previous 24 months, this perfect storm of economic retraction left us with no other option.” He continued, “The preemptive cost cutting initiatives that we took throughout 2008 were not enough to protect our investments without filing for Chapter 11 reorganization protection.”


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Mario Bros

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KeyHeart

KeyHeart, originally uploaded by pat_the.

Dollar bills

Dollar bills, originally uploaded by pat_the.

Five Small Business Tips For Surviving The Economy

In case you didn’t know, the economy still sucks. Everyone’s affected, from big business all the way down to the individual. But there’s opportunity to be found, particularly in small business. The brands that are losing the least are the brands that have the least to lose. Seems weird, but it makes sense.

Whether you’re a core retailer, or a major player in the skate shoe game, you’re probably considered a “small business” (generally refers to “under 100 employees”). And one thing there’s no shortage of is “experts” that want to tell you how you can do better. A simple Google search unearths a dozen, easy. A lot of the ideas in these articles really don’t apply to our little corner of the universe, but maybe some of them do. The problem with “businessey” articles in general is that they seem cold and unfeeling, and discuss things like layoffs without regard for the people getting laid off. One of the things that makes our industry so desirable is that it shuns convention and seems a little friendlier than the rest of the world.

So here are a few principles pulled from these articles. Maybe they apply, maybe they don’t. That’s up to you.



1. Organize and Automate: One of the pitfalls of the small business is that it’s easy to cut corners. An article by Denise O’Berry shows some interesting small-business poll results.

* “66 percent of small businesses still handwrite invoices, use word processing programs and spreadsheets, or simply don’t have a standardized method.”
* “Nearly 20 percent of small business owners admit to forgetting to invoice or follow up on an overdue invoice. Over 50 percent of these respondents admit that they are simply “not organized” and “lack an automated system for creating and tracking invoices.”
The survey was conducted in October 2008, and included 751 small businesses

2. Adapt: A Wall Street Journal interview with business consultant Victor Cheng discusses the advantages a small business has when it comes to adaptation. “The big mistake in a recession is to not realize that things need to change and that they need to be flexible and adapt quickly. Unfortunately, bad news has this huge ability to paralyze people,” advises Cheng.

3. Reduce Overhead: This one’s fairly obvious and pretty much mandatory, and I’m willing to bet anyone reading this has already reevaluated costs and spending. In an article called How To Survive This Economic Crisis, Small Business columnist Jan Norman lists ways to cut costs: “Review company expenses starting with the largest and work down. Renegotiate the lease if the landlord is willing. Monitor all employee expenses. Ask employees for suggestions for improvement. Evaluate staffing. Consider temporary, flexible, reduced hours for employees. Lay off when necessary. Keep your employees informed. Review all salaries, including owners, to see if they can be reduced.” No one likes to lay people off any more than they like to be laid off, So it’s interesting to note that Norman suggests listening to suggestions from employees, and keep them informed, in addition to the “L” word. In fact, cutting staff too drastically can cause your business even more problems down the road, like burning out the employees you keep.

4. Customer Satisfaction: Everyone’s got customers. Retailers are scrutinizing their buys, and ordering smarter. Brands are scrambling to reconnect and solidify relationships with retailers to be part of that smart order. From 11 Ways Small Business Can Survive in Today’s Economy: “Work on retaining the customer base that you have built up with follow-through, good customer service, and quality control.”



5. Be Visible: There’s a great article by Havi Brooks called It’s Not The Economy, wherein she warns about scapegoating the economy for poor business planning. Brooks explains that, when times are good, an “invisible” store can do well, but when times aren’t so good, that hard-to-find place will suffer, while the well-advertised business will thrive. “The good economy was camouflaging everything that they [invisible store] weren’t doing.”




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Snow is out for summer

Snow is out for summer, originally uploaded by pat_the.

Office Booyz April 9th 2009

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32 Commercials

Check out these Thirty Two commercials See the light

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Why the South Korean carmaker is doing well in the downturn

IT IS not just America’s ailing carmakers that have been clobbered by the recession and the corresponding collapse in demand for new vehicles: every other carmaker is suffering, too. Even luxury marques such as Mercedes-Benz, Lexus and BMW, which are usually less affected by economic downturns, have reported plunging sales. All of which makes the achievements of South Korea’s Hyundai particularly remarkable. It has managed to increase its car sales in America—they rose by 14% in January compared with a year earlier—and it has done so, in part, by moving into the luxury-car market.

The idea of a luxury Hyundai may sound like an oxymoron to many people, given the brand’s low-cost image. Accordingly, the company took a relatively cautious approach to the launch of the Genesis saloon, its first luxury car, last year. So far it has been made available in only a few markets, including South Korea and America. Launching a new luxury vehicle in the midst of a recession seemed foolhardy, but Hyundai has benefited from consumers’ desire to “trade down” in hard times. The Genesis, which starts at $32,250, costs around $13,500 less than a comparable BMW. John Krafcik, the boss of Hyundai’s American arm, says his dealers are taking a sizeable number of more expensive luxury cars in part-exchange for the Genesis, notably the 5-series BMW.

Evidently Hyundai’s marketing, which is based on head-to-head comparisons with luxury vehicles made by BMW, Lexus and others while emphasising the lower price, has struck a chord. The industry is also impressed. In January the Genesis was named North American Car of the Year, overcoming a crowded field that included the Audi A4, Jaguar XF and Cadillac CTS-V. Hyundai is about to launch a second model, the Genesis Coupe, one version of which will feature the Brembo brakes found in top-of-the-range Mercedes and Ferrari sports cars.

Joe Phillippi of AutoTrends Consulting is one of many analysts who believe that the Genesis is one of the main reasons why Hyundai is doing well: its market share in America has increased from 2.1% in January 2008 to 3.7% in January 2009, and the company is now gaining market share more quickly than any other carmaker in America. Besides the Genesis, Hyundai is also benefiting from a novel scheme, launched in January, in which it offers to buy back cars from customers who lose their jobs within a year of their purchase. (The company essentially offers a smaller discount and then uses the money to buy an insurance policy.) This has proved so successful in stimulating sales that General Motors said on March 3rd that it was considering a similar scheme.

Looking further ahead, Mr Krafcik talks of launching the Genesis in other markets, and perhaps even spinning off a separate Genesis brand, as Toyota did with Lexus. For Hyundai, the story of Genesis has got off to a good start.

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From The Economist

My friend this is the end

My friend this is the end, originally uploaded by pat_the.

Volcom Releases 10-K

Volcom, Inc. filed its 10-K statement on March 16.

There are some interesting points in the document, and if you haven’t been following the company’s performance this would be a good place to start.

To see the entire document, click Here.

Here’s a condensed look at some of the more interesting excerpts from the 10-K:

Revenue:

“Our revenues increased from $113.2 million in 2004 to $334.3 million in 2008. In June 2007, we began direct distribution of our product in Europe, which has contributed to our increase in sales … In addition, several of our largest retailers have opened additional stores and those store openings likely have contributed to an increase in our product revenues; however, period-over-period increases in our product revenues as judged solely by additional store openings by our largest retailers may not be a useful or accurate measure of revenue increases because our products may not be carried in every new store.”

Pac Sun:

“Sales to Pacific Sunwear increased 7%, or $3.4 million, for 2008 compared to 2007. Our sales to Pacific Sunwear may decrease in the future and we currently expect a decrease in 2009 revenue from Pacific Sunwear compared to 2008. Pacific Sunwear remains an important customer for us and we are working both internally and with Pacific Sunwear to maximize our business with them. We believe our brand continues to be an important part of the Pacific Sunwear business. We also recognize that any customer concentration creates risks and we are, therefore, assessing strategies to lessen our concentration with Pacific Sunwear.”

Inventory:

“We value inventories at the lower of the cost or the current estimated market value of the inventory. We regularly review our inventory quantities on hand and adjust inventory values for excess and obsolete inventory based primarily on estimated forecasts of product demand and market value. Demand for our products could fluctuate significantly. The demand for our products could be negatively affected by many factors, including the following:

-weakened economic conditions
-changes in consumer preferences
-buying patterns of our retailers
-retailers cancelling orders
-unseasonable weather

Gross Margin:

“If the current economic downturn persists or worsens in 2009, we may determine it to be necessary to offer additional discounts, which may reduce our gross margins and could adversely impact our financial performance and results of operations. Our gross margins have also historically been seasonal, with the first quarter having the highest margin. However, with the introduction of our direct European business and our Electric subsidiary, the seasonality of our gross margin may change. If we misjudge forecasting inventory levels or our sourcing costs increase and we are unable to raise our prices, our gross margins may decline.
“

Cost Of Goods:

“With the passage of the Consumer Product Safety Improvement Act of 2008, there are new requirements mandated for the textiles and apparel industries. These requirements relate to all metal and painted trim items and certain other raw materials used in children’s age 12 and under apparel … We will continue to monitor the situation and intend to abide by all rules and changes made by the CPSC. This could have a negative impact on the cost of our goods and poses a potential risk if we do not adhere to these requirements.”

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Active closes five stores, more closures planned

Active Ride Shop, one of the industry's largest customers which embarked on a rapid expansion in the past few years, has closed five stores so far this month.

Active stores in Chula Vista, Lake Elsinore, downtown San Diego and in San Diego at the Shops at Las Americas are no longer listed on Active's website. Phones at those stores either go unanswered or are no longer in order.

Simi Valley has also closed, and two other under-performing stores will close this week. All told, about 10 stores will close by April 1.

In the past 12 months or so, Active opened a new state-of-the-art, 100,000-square-foot headquarters and warehouse in Mira Loma, made a large investment in an upgraded technology system for its robust e-commerce business and opened several new stores. Since 2006, Active roughly doubled its store count. A lot of this expansion and investment was underway before the economy began contracting.

Currently, Active operates 24 stores.

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Maple old men

Maple old men, originally uploaded by pat_the.

Curling is the new black

Curling is the new black, originally uploaded by pat_the.

Blue light

Blue light, originally uploaded by pat_the.

Pas de grafittis

Pas de grafittis, originally uploaded by pat_the.

Mileend

?, originally uploaded by pat_the.

MARKET WATCH: VF’s Retail Strategy and Annual Report

VF, though impacted by the recession in the third quarter and expecting it to last through 2009, had a good year in 2008. I’ll go over those numbers briefly, but there’s nothing all that intriguing or educational I feel the need to spend a bunch of time on.

What’s more interesting is how VF describes its direct to consumer strategy. They spend more time than a lot of companies do describing it, but their overall thinking isn’t that different from other brands going direct to consumers (which seems to be, pretty much, all brands). There are some implications and commonly held assumptions that are worth examining.

HERE’S the link to the whole filing. VF Corporation

But first, the numbers:

Total sales for the year grew 5.9% to $7.64 billion. The first three quarters all showed growth, but fourth quarter sales fell 2.2% to $1.91 billion. Gross margin rose from 43.5% to 43.9%. Marketing, administrative expenses rose from 30.1% to 31.7% “due to the growth in our direct-to-consumer business, which has a higher expense ratio.” More on that later.

The effective income tax rate was 28.9% down from 32.3% in 2007, contributing to net income rising 1.9% from $591.6 to $602.7 million.

The balance sheet remains strong, with current ratio having risen from 2.3 to 2.6 and debt to total capital falling (that’s a good thing) from 26.4% to 25.2%. Accounts receivable actually fell even with the increase in sales- a good result. Inventory was up just a little over 1%.

VF has 25 brands, but they do not break out sales for each. I’d like to have some specifics on Vans and Reef too, but they aren’t provided. For reporting purposes, they divide their brands into five coalitions; Outdoor and Action Sports (including Vans and Reef) Jeanswear, Imagewear, Sportswear, and Contemporary brands. If you click on the link above and go to page three, you’ll see the brands listed by coalition.

VF characterizes the Outdoor and Action Sports group as their fastest growing. Its revenue increased 15% in 2008. “The growth in these brands, particularly The North Face® and Vans®, included geographic expansion and the opening of additional owned retail locations. Domestic revenues for our outdoor and action sports businesses increased 11%, while international revenues increased 21%, with the favorable effects of foreign currency accounting for $57 million or 6% of this increase.”

Profits for that group were up 16% in 2008. This coalition had revenue of $2.74 billion and profits of $454 million, the biggest contribution of any of the coalitions.
Direct to Consumer

Worldwide, VF had 698 stores at the end of 2008. These included brands outside of the Outdoor and Action Sports group. In addition, “our licensees, distributors and other independent parties operate over 1,200 retail stores dedicated to our brands. These stores are located primarily in Eastern Europe and Asia.” They currently market seven of their brands, including Vans, online and plan additional ecommerce sites in 2009.

Total retail and ecommerce sales accounted for 16% of 2008 revenues, up from 14% in 2007. “We expect our direct-to-consumer business to continue to grow at a faster pace than VF’s overall growth rate as we continue opening retail stores for our lifestyle brands.” They opened 89 new stores in 2008 and expect to open 70 in 2009.

This is what VF says about their full price retail stores:

“Our full price retail stores allow us to showcase a brand’s full line of current season products, with fixtures and imagery that support the brand’s positioning. These stores provide high visibility for our brands and products and enable us to stay close to the needs and preferences of consumers. The proper presentation of products in our retail stores also helps to increase consumer purchases of VF products at our wholesale customers.”

I can’t imagine any brand with retail stores saying much different. They also mention that their return on investment and gross margin is higher in its retail stores than in VF overall. And then they go into the part about how their outlet stores let them get rid of excess inventory “while maintaining the integrity of our brands.”

Sounds wonderful. You can see why any brand would want to open lots and lots of retail stores. Two problems with it though. First (and I brought this up years ago), opening retail stores is at least partly a response to running out of other ways to increase distribution of your products (for any brand). To me, a strategy of brands opening retail stores is at least partly a recognition that you couldn’t get the growth you needed/wanted from your existing distribution without damaging the brand. So in some ways it’s not a positive strategy. It’s a response to a dilemma that all successful brands eventually face.

Second, there’s the little matter of the economy. We’re not just in a recession. This is a long term change in consumer spending and saving habits. Go talk to somebody who lived through the great depression and ask them about their lifelong spending and saving habits. I am not predicting a great depression with 25% unemployment, but consumer behavior is going to change for at least the medium term.

I don’t think it’s enough for brands to be tinkering with their strategies because of the recession. They should be questioning their fundamental assumptions- including the idea that more retail stores are a source of growth and product differentiation. It just may be that you’ll have to earn money the old fashioned way- differentiating your product and managing distribution cautiously. Accelerating sales growth may not be on the horizon. The stock market certainly seems to think that.

VF, of course, is not exactly a typical action sports company. It’s got 50,000 SKUs over thirty brands. It has 30 of its own manufacturing facilities and works with 1,600 contract manufacturers. Of its 46,600 employees, only 19,900 are U.S. based. Its ten largest customers accounted for 26% of its 2008 revenues and included Kohl’s, Macy’s, J.C. Penney, Sears, Target, and Wal-Mart.

Wal-Mart is its largest customer (almost all sales come from VF’s Jeanswear Coalition) and accounted for 11% of 2008 revenues.

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Quiksilver Reports 11% Decrease In Revenue For Q1 2009

Quiksilver, Inc. (ZQK) announced its results for the first quarter ended January 31, 2009 this afternoon. Consolidated net revenues from continuing operations for the first quarter of fiscal 2009 decreased 11% to $443.3 million from $496.6 million in the first quarter of fiscal 2008.

Bob McKnight, Chairman of the Board, CEO, and President of Quiksilver offered this comment in the release: “While our performance in the quarter was in line with our overall expectations, deteriorating macro conditions made for a very difficult operating environment. Weak consumer traffic drove lower sales and margin compression which resulted in a loss for the quarter.”

Log into the Q1 conference call HERE and stay tuned to Transworld Business for analysis of the call once it’s over.

Here’s the press release from Quiksilver:

Quiksilver, Inc. Reports Fiscal 2009 First Quarter Financial Results

Huntington Beach, California, March 11, 2009–Quiksilver, Inc. (NYSE:ZQK) today announced operating results for the first quarter ended January 31, 2009. Consolidated net revenues from continuing operations for the first quarter of fiscal 2009 decreased 11% to $443.3 million from $496.6 million in the first quarter of fiscal 2008. The pro-forma consolidated loss from continuing operations for the first quarter of fiscal 2009 was $9.0 million, or $0.07 per share, compared to income of $7.6 million, or $0.06 per share, for the first quarter of fiscal 2008. The pro-forma net loss excludes a $6.1 million severance charge in the Americas and a $50.8 million non-cash charge to write off the Company’s deferred tax assets in the United States. Including these charges, the loss from continuing operations was $65.9 million or $0.52 per share. A reconciliation of GAAP results to pro-forma results is included in the accompanying tables. Net revenues and income from continuing operations for all periods exclude the results of our Rossignol wintersports business, which was sold in November 2008 and is reported as discontinued operations.

Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “While our performance in the quarter was in line with our overall expectations, deteriorating macro conditions made for a very difficult operating environment. Weak consumer traffic drove lower sales and margin compression which resulted in a loss for the quarter.”

Net revenues in the Americas decreased 13% during the first quarter of fiscal 2009 to $203.4 million from $234.9 million in the first quarter of fiscal 2008. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 9% during the first quarter of fiscal 2009 to $181.7 million from $200.3 million in the first quarter of fiscal 2008. Changes in foreign currency exchange rates accounted for a decrease in European revenues of approximately $20.1 million for those same periods. As measured in U.S. dollars and reported in the financial statements, Asia/Pacific net revenues decreased 5% to $57.6 million in the first quarter of fiscal 2009 from $60.4 million in the first quarter of fiscal 2008. Changes in foreign currency exchange rates accounted for a decrease in Asia/Pacific’s revenues of approximately $14.7 million for those same periods.

Consolidated inventories increased 4% to $380.5 million at January 31, 2009 from $364.4 million at January 31, 2008. Consolidated trade accounts receivable decreased 7% to $373.4 million at January 31, 2009 from $402.5 million at January 31, 2008.

As previously disclosed, Quiksilver has been exploring a wide range of strategic and financing alternatives with the objective of improving its liquidity position and capital structure. To accommodate the timing of a potential transaction, the Company’s European banks extended the maturity of its €55 million line of credit from March 14 to June 30, 2009.

Mr. McKnight added, “Increasing liquidity and improving our capital structure continue to be our highest priority initiatives. Even though the credit markets remain difficult, we continue to make good progress on these objectives. And as we monitor the global retail environment, we remain committed to taking appropriate actions to adjust our business where necessary.

Addressing its outlook for continuing operations, the Company stated that based on current trends second quarter revenues will likely be down in the mid-teens on a percentage basis compared to the same quarter a year ago and that diluted earnings per share are expected to be in the mid-single-digit range. The Company indicated that longer term visibility into revenues and earnings remains limited at the present time.






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Triangle -Rouge

Triangle -Rouge , originally uploaded by pat_the.

The 2009 Ride Shakedown April 3rd and 4th

Montreal, March 11, 2009 – On April 3rd and 4th, Mont Saint-Sauveur will welcome some of the world’s top riders for the 8th annual RIDE Shakedown, the most important snowboarding event in the country. New key features this year will include a new women’s category sponsored by Oakley, the launch of a $35,000 purse, Canada’s largest, and the creation of the spectacular, ground-breaking AMP Energy rail. A quick reminder that this year’s competition has been renamed in honour of the event’s new title sponsor, RIDE Snowboards.

Capitalizing on its increasing popularity, the Shakedown is pursuing its growth in 2009 and, as such, has introduced major changes, such as the development of its infrastructures, the creation of a women’s category and the launch of a new collection of exclusive clothing and accessories, now available online at http://shop.shakedown.ca . In fact, the Shakedown was recently featured in a Ubisoft Montreal videogame entitled Shaun White Snowboarding.

The Shakedown in the U.S. in 2010?

“The RIDE Shakedown is looking to gain a foothold in the United States as early as next year,” explained Patryck Bernier, co-founder of Dizzle Entertainment Inc. and organizer of the RIDE Shakedown. “Our goal here is not to leave behind the Quebec market, but rather to take advantage of our event’s international reputation and unique format, so that over the long term we can build a network that will help us organize an international contest series. With only two years to go before our 10th anniversary, we will pull out all the efforts to outdo ourselves in all respects. The Shakedown is a snowboarding event whose vision deftly combines the aspirations of athletes with those of spectators. We will invest as much energy as needed to ensure that this vision becomes a reality.”

Of pros and fans

The RIDE Shakedown is eagerly awaited by professionals – who hope to be invited – and the up-and-coming riders vying for one of the 80 amateur spots and their chance to tackle the pros. Add to this some 20,000 exhilarated fans cheering on their idols during the two-day competition, and it is easy to understand why the Shakedown is Mont Saint-Sauveur’s top event of the year.

The athletes

Among the many world-class professional snowboarders invited to the RIDE Shakedown this year will be Darrell Mathes and Bode Merrill (USA), well known in the industry and featured in many movies, magazines and competitions; Dustin Craven (Alberta, Canada), winner of Shakedown 2007; Alex Cantin (Quebec City, QC), member of RIDE Snowboards Rookie Pro team; Charles Reid (Mont-Tremblant, Quebec), title winner of Shakedown 2008; and Sébastien Toutant (L’Assomption, Quebec), champion of Shakedown 2006, when he was just 13 years old and an amateur.

Competing in the women’s category will be Marie-France Roy (Éboulements, Quebec), a Quebec athlete of the Oakley team considered to be among the world’s leading snowboarders (slopestyle). At 24, she is currently travelling the world, participating in the X Games and scooping up every honour along the way. In 2008, in the United States, this genuine snowboarding icon won the Women’s Rider of the Year, Women’s Video Part of the Year and Women’s Readers’ Choice at the prestigious Annual TransWorld SNOWboarding Riders’ Poll Awards. Top-level professional athletes such as Silvia Mittermuller (Germany), Chanelle Sladics (USA) and Hana Beamen (USA) will round out the roster of participants, for performances that are bound to captivate.

Calling all amateurs
On Friday, April 3rd, 2009, riders will compete during the Oakley amateur qualifications. The first 80 men to register will have the opportunity to show off their skills and earn their spot among the three amateurs who will go head to head with the pros during the semi-finals on Saturday, April 4th. On the women’s side, two of the 20 aspiring amateurs will have the chance to carve out a place for themselves among the pros at the Coors Light Rail Jam. The registration form is available on the Shakedown Website at www.shakedown.ca . Space is limited. First come, first served!

A jump and rails

Riders will be taking part in a one-of-a-kind competition that requires them to master two different disciplines: the Big Air and the rail jam, featuring a rail with different textures revealed only on the first day of competition. The great unveiling of the Shakedown’s best-kept secret is, in fact, always highly anticipated by visitors and participants, who must adjust their strategies accordingly. Hang on to your hats, because this year’s rail is more original than ever, and promises to astound with thrilling, high-altitude performances.

As for the Empire jump, its configuration is already known. Riders will cover 50 feet, followed by a 20-foot climb. The ramp measures 12 feet, has a 50-foot plateau and an 80-foot by 60-foot wide landing area. Since riders move from left to right to provide fans with a better view of the action, the jump configuration involves using the slope’s full width.

A unique format
The RIDE Shakedown involves two distinct competitions: the main competition of the same name, featuring semi-finals and an ultimate final round, and the Coors Light Rail Jam, which takes place exclusively on the rail. Both competitions are open to men and women. The first day of the RIDE Shakedown is dedicated to the Oakley amateur qualifications and the Coors Light Rail Jam. The second day introduces the two phases of the main competition.

At the RIDE Shakedown, athletes have two hours to perform two judged runs, announcing them before they carry them out under the watchful eye of a jury of six industry players, all with over 15 years of experience in snowboarding (see attached list).There is no pre-determined order, as riders perform when they feel ready, a unique competition format appreciated by all those involved.

In the men’s category, 35 professional athletes will participate in the semi-finals, along with three amateurs selected the day before among the 80 aspiring riders, giving them the chance to match skills with the pros. Only 15 athletes will advance to the main event, the 2009 RIDE Shakedown finals, set to take place on the evening of Saturday, April 4th. During the Coors Light Rail Jam, 20 athletes will wow the crowd with their unforgettable series of snowboard tricks.

In the women’s category, 10 high-calibre pros will battle it out during the semi-finals, with 5 of them going on to the finals. During the Coors Light Rail Jam, three professional riders will be invited to join two amateurs selected that day among 20 competitors. Women will compete on the same course as men, at the same time along with them. Only the ranking differs, given that they are judged separately.

The Purse

With a total prize of $35,000, $20,000 for men and $15,000 for women, the RIDE Shakedown currently stands as Canada’s most generous event of its kind. In the men’s category, prizes of $10,000, $3,000 and $2,000 will be awarded to the three RIDE Shakedown champions, with $5,000 going to the winner of the Coors Light Rail Jam. As for the women, the three winners of the 2009 Shakedown will ride away with $5,000, $3,000 and $2,000, while the Coors Light Rail Jam champion will pocket the sum of $5,000.

Broadcast of the 2009 RIDE Shakedown

The event will be broadcast in a special program on April 26th, at 2:30 p.m. on RDS and on May 2nd, at 11:00 a.m. on TSN.

Event schedule (subject to change)

Friday, April 3rd
10 a.m. to 4 p.m. Oakley amateur qualifications – Men (80)
4:30 p.m. to 6 p.m. Rail Jam amateur qualifications – Women (20)
5 p.m. Announcement of qualifying athletes
6 p.m. to 8 p.m 6 p.m. to 8 p.m. Coors Light Rail Jam– (5 women and 20 men are invited to perform snowboard rail tricks)
8:30 p.m. Awarding of the prizes

Saturday, April 4th
12 p.m. to 1 p.m. Snowboard Canada autograph session with professional athletes
2 p.m. to 5:30 p.m. Competitors’ warm-ups and pro semi-finales
6 p.m. 6:45 p.m. Push.ca halftime show – (skateboard pros on the AMP Energy rail)
7 p.m. to 8 p.m. 2009 RIDE Shakedown finals
8:30 p.m. Awarding of the prizes
9 p.m. 9 p.m. Troublemakers presents in collaboration with Coors Light and Dose.ca the official Shakedown afterparty – at the Bourbon Street Club in Sainte-Adèle (must be 18 years old and over)

Our partners
The 8th annual RIDE Shakedown was made possible thanks to the support of RIDE Snowboards, Mont Saint-Sauveur, AMP Energy, Ubisoft, Coors Light, Empire, Oakley, Push.ca, as well as Nixon, Nikita, IFound, Drop, Bern, Dose.ca, Thirty Two, Camp of Champions and Moog Audio. The participation of the following media should also be noted: Snowboard Canada Magazine, MusiquePlus, 33mag.com, Slash magazine, Crux Magazine and Myspace.

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New Grenade logo

FUNNY !!

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Consumers Buying Premium Denim, But Category Showing Wear

Consumers Buying Premium Denim, But Category Showing Wear
Dow Jones
March 05, 2009: 12:54 PM ET

NEW YORK -(Dow Jones)- Premium denim might have withstood the recession so far, but those jeans with hundred-dollar price tags are starting to show some signs of wear as the downturn drags on.

Consumers have abandoned everything from that daily latte to designer handbags. But they've seemed reluctant to give up pricey jeans, from companies such as True Religion Apparel Inc. (TRLG), VF Corp.'s (VFC) 7 For All Mankind and Joe's Jeans Inc. (JOEZ), making the $425 million market a relative standout in an otherwise dismal retail universe.

The category outperformed its lower-priced brethren and many other types of apparel last year, even amid an abysmal holiday-sales season.

Unit sales for $100-plus denim in department stores and national chains rose 20% in 2008 to $425.5 million, according to market research firm NPD Group.

Premium denim, whose prices can range from $100 to more than $300, has driven excitement in the approximately $4 billion total denim market for a while, as consumers snapped up the jeans with a celebrity following and flashier back- pocket designs.

But there are some signs that consumers are cutting back on expensive jeans, providing a test for True Religion, 7 and Joe's, the sector's three publicly traded players.

And while all three companies have started to expand into other clothing categories and even operate their own stores -- aiming to become recognized worldwide brands like Guess Inc. (GES), Deisel and Calvin Klein Industries Inc. -- most sales still come from denim. They also sell a lot of their products in specialty department stores like Nordstrom Inc. (JWN) and Saks Inc. (SKS), which have seen sales deteriorate in recent months.

That's largely the reason investors have sold off premium denim names. So far this year, True Religion's shares have lost about a third, and were recently trading around $8.39. Apparel giant VF, which owns True Religion competitor 7 For All Mankind and other labels such as North Face, has lost about 13%, recently changing hands around $47.70. Joe's Jeans shares have fallen further into penny-stock category, down about 19% year-to-date, recently trading around 29 cents.

Still, sales at True Religion, known for a horseshoe-shaped design on its denim back pockets, have held up fairly well. The company, which last week reported a profit that beat analysts' expectations, said revenues at its domestic wholesale division grew about 14%, driven by more shipments to department stores like Nordstrom. But that growth was offset by continued weakness at boutiques, some of which are struggling to survive the downturn.

U.S. department stores and boutiques drive about half of True Religion's sales, while approximately 16% comes from international retailers. Its 42 company-branded stores and Web sales bring in the remaining 34%.

True Religion's management is being realistic about challenges, analysts say. For the year, it expects U.S. wholesale sales to fall between 17% and 19% on continued weak sales at boutiques and a mid-single-digit percentage sales decline to major department stores and off-price retailers.

"We are operating in unchartered territories," said Chief Executive and Chairman Jeffrey Lubell in the company's earnings call. "While True Religion is certainly not immune to these events, we remain acutely attuned to the changes in the macro environment."

True Religion expects to offset expected weaker wholesale sales some with the continued growth of its own stores. The jeans maker plans to add 25 new locations this year and have a total of 80 stores by the end of 2010.

Competing brands are also feeling some pain from the economy. 7 For All Mankind's wholesale business began seeing some softness around October, with consumers opting to buy jeans in the $150 to $200 price range, instead of those costing north of that, said VF's President of Contemporary Brands Coalition, Mike Egeck. In general, shoppers also bought one pair of jeans, instead of the usual two or three, Egeck said.

"Across our distribution channels (including Barneys, Nordstrom and Saks), their businesses have been challenged," Egeck said in an interview, noting retail partners were staying conservative as they aimed to keep inventories lean.

But Egeck said 7's 15 standalone retail outlets were performing in line with the company's expectations, and VF still planned to open nine to 15 new locations this year.

"We're still bullish on the long-term viability of this brand," said Egeck, noting 7 could grow to be a $1 billion business.

The smallest of the three players, Joe's Jeans, also expects 2009 to be "a much more challenging environment," one executive said at a recent Roth Capital Partners analyst conference. The brand, which opened its first full-priced retail outlet last year, is launching a lower-price point jean of $138 this year "to capture a wider market."


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Retail Round Up:February

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Foot Locker expanding in skate in 2009

One of Foot Locker's key initiatives in 2009 is to expand its skate shoe business, company executives said in a conference call with investors yesterday.

In addition to capitalizing on its recent acquisition of online skate retailer CCS, the company plans to expand the skate category in its brick-and-mortar stores.

Here are some excerpts from CEO Matthew Serra's comments about action sports and skate during the conference call:

"... We believe that we have a very meaningful opportunity in 2009 to enhance our business by expanding further in the action sports categories.

"Our purchase of CCS was a significant step in capitalizing on this opportunity. Our fourth quarter profit from CCS was in line with our expectation. ... CCS has an opportunity to generate double digit operating profit margins during 2009, in line with those of Footlocker.com.

"Additionally, we will continue to pursue opportunities to expand our skate business in the bricks and mortar segment of our business."

Other interesting notes from the call:

- While same-store sales declined 7.3 percent in the fourth quarter, the company's gross margin rate increased 330 basis points because Foot Locker saw the slowdown coming and reduced inventories and cut operating expenses. That meant they did not have to be promotional to chase sales.

- The company ended the year with inventories 13 percent lower than the same period last year.

- Tapout is a new apparel line in Foot Locker stores and the company said it is doing well.

- CCS was accretive to earnings in the fourth quarter.

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VUITTON HIGH TOP X KANYE WEST

This collaboration between the french house and the american artist is really interesting and significant on the high-fashion market, and sneaker market. It means that sneaker culture and sneaker market (sportswear one) as we knew it are dead. The mass market is gonna totally absorb it. And it means also lots of thing about the fact that LOUIS VUITTON wants to extend his consumer targets. LOUIS VUITTON want to have this new consumer : older with some money, and a new fashion culture.

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So much for capitalism

FOR two decades, in the 1980s and 1990s, China pushed forward a series of economic reforms that came at a vast cost, exceeded only by their vaster rewards. Now, as the financial crisis sweeps across the world, those reforms are going into reverse. It is a sign of how hard governments find it to shake off the habit of ownership.

When China began to extract production from the hands of the state, big firms were broken up, reconfigured or closed. Ever so slowly, the government began to privatise its largest industries, selling slices of companies in public offerings on foreign exchanges, and making them adopt at least the pretence of modern governance.

How far China has gone in transforming its economy is a matter of debate. Unarguably, it remains a place where companies face heavy direct and indirect state control. But in places there has also been dramatic change, and China has prospered as broader economic freedoms contributed to growth. Outright criticism of the shift was muted, even among bureaucrats opposed to the new approach. But over the past year this reticence has begun to wane, as the crisis in the West has led to intense criticism of capitalism—and one domestic industry after another has, as in the West, gone back to the government for support.

In December China Investment Corporation, one of the country’s many sovereign-wealth funds, acknowledged buying shares of Chinese banks on the open market. Other government-backed funds are thought to have been buying as well, which may explain why the banks’ share prices have held up even as banks elsewhere totter. Meanwhile, the state-controlled China Development Bank is said to be negotiating a takeover of Shenzhen Development Bank, one of the few financial institutions controlled by foreigners.

It is a similar story in aviation. In the late 1980s the government created three gigantic carriers—Air China, China Eastern, and China Southern—to provide competition and service where there had previously been none. The carriers have succeeded in a limited way, dramatically expanding coverage across China, but management has undergone frequent shifts and none of the airlines has a good reputation. All three operate at a loss, and two of them, according to the Chinese state-run press, have received large capital injections from the central government in recent months. A broad, government-driven reorganisation is expected in the next 18 months.

Similarly, five big power-generation firms were split out of a single company in 2002 to foster competition. Any sense of true operating independence was badly undermined last year, however, when the government imposed price caps on electricity, even as the utilities grappled with rising coal and oil prices. Those prices have since fallen, but so has demand. On February 20th the Chinese press reported that the government was injecting $13 billion yuan ($1.8 billion) into the companies, indirectly boosting its stake.

Even China’s car industry, which is alive with competitors, is coming further under the government umbrella. More than 10 billion yuan in subsidies is being paid to carmakers, and billions of yuan more are being granted to encourage car sales. Various deals are being mulled between Chinese firms and distressed foreign brands, and these too would need financial support from the government. Beyond that, Chinese newspapers report that a broad restructuring is in the offing, which would reorganise the industry into four state-controlled giants.

In the West the prospect of nationalisation causes companies’ share prices to collapse, but the opposite often occurs in China, and share prices rise instead. In a state-controlled system, it is good to have the state’s explicit endorsement and protection. But it comes at a cost. The reason China initially backed away from state control was because companies were inefficient and corrupt, and ultimately people suffered. In today’s panic, perhaps, that is a secondary concern. But times will eventually change for nationalised firms in China—and for those in the West, too.

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Circe Snow

Former pro shred and star talent manager Circe Wallace has worn many hats in the snow game, and in her latest venture, Circe Snow, she’s designing her own. The new company’s initial offering is a high-end ladies’ line of outerwear and accessories featuring an interchangeable “kit” that includes a clutch you can attach to your belt, cuffs, collars, pocket adornments, and belts that let ladies switch up their look without buying new outerwear.

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Skatelab Launches Apparel Line In Wal Mart

Owner Todd Huber explains the apparel licensing is nothing new, and has in fact been a part of the plan all along. “We’ve always wanted to expand beyond our building, he says, “so we’ve been licensing our name in several categories. We started with a few shirts in Macy’s, Taget and JC Penny’s, and after presenting our line to Wal Mart it was a really good fit. We came to them but they knew of us already.”

Huber says Wal Mart tested the line in a few stores last year, but by summer Skatelab apparel should be available in 1,750 stores. Shorts, backpacks, and other items are currently in development.

When asked if any Skatelab devotees were opposed to the licensing, Huber says: “Why would my customers give a shit? I think by now everyone knows it is almost impossible to build and keep a private indoor skatepark running and we have been doing it the right way for almost twelve years. I think my “core” customers know that all of our profits go right back into improving the skatepark so they will support it.”

In a recent Thrasher interview, Girl pro Mike Mo Capaldi offers his take. “They get to remake the park because of it,” he says. “Make it way better than it is now. They can sell out all they want; it’s just going to give me and my friends a way better place to skate now.” Capaldi grew up near the Skatelab, and honed his skills in the park.

“People instantly think dollar-signs,” Huber explains, “but if you know us—me and my partner Scott Radinsky—then you know it is not about the money. It’s about the skatepark, and always has been. Shit, I drive a rusty 1980 p200 Vespa everywhere.”

Tee shirts and hats sell for $7.50

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