Generated by All in One SEO v4.9.10, this is an llms.txt file, used by LLMs to index the site. # Jeff Harbaugh What’s the Goal? Begin With the End in Mind ## Sitemaps - [XML Sitemap](https://jeffharbaugh.com/sitemap.xml): Contains all public & indexable URLs for this website. ## Posts - [How Iran Broke America](https://jeffharbaugh.com/how-iran-broke-america/) - Darrin Waller, writing as Fountainbridge on Substack, just published "How Iran Broke America." He says in his introduction, "Tehran has achieved what few nations in recorded history ever have: by refusing to submit to the global hegemon, it took on two of the era’s most formidable military powers — outspent by more than fifty to - [Critical Minerals For Which the U.S. Was More Than 50% Import Dependent in 2025](https://jeffharbaugh.com/critical-minerals-for-which-the-u-s-was-more-than-50-import-dependent-in-2025/) - This is kind of a problem if you wan to, say, fight a war or manufacture semiconductors, just to cherry pick a couple of things. From a post by Bonner Private Research. - [Almost Half of American Households Have No Retirement Savings](https://jeffharbaugh.com/almost-half-of-american-households-have-no-retirement-savings/) - From Apollo Chief Economist Torsten Slok in his Daily Spark. You can sign up here for free to receive it. Excellent macroeconomic data in a very short form. Note that having no savings in a retirement account, as shown below, does not necessarily indicate no savings at all. That doesn't change the seriousness of the - [Ray Dalio: We're in the Third World War](https://jeffharbaugh.com/ray-dalio-were-in-the-third-world-war/) - Ray is a very smart man who has spent decades studying history's cycles to inform his investing. Judging from his investing results, it worked. Here's his most current article on Linked In. At the bottom you can signup to be notified of new articles. There also links to his books on the subject. They are - [Germany's Nuclear Reactors](https://jeffharbaugh.com/germanys-nuclear-reactors/) - Look at the chart below. I took this from Dave Hay's substack, some of which is behind a paywall. In what must be one of the most futile and poorly timed gestures towards climate change political correctness, Germany's last nuclear reactor seems to have been shut down last year. I've heard there are noises being - [Iran as a Religious War](https://jeffharbaugh.com/iran-as-a-religious-war/) - David Kotok is a very bright man. I know David because for some reason I started communicating with him and found myself invited to Camp Kotok, which I regret I'm not going to this summer. Anyway, he just posted this three minute video on you tube. Please watch it. - [It Appears We've Learned Nothing About Investing.](https://jeffharbaugh.com/it-appears-weve-learned-nothing-about-investing/) - This was most recently quoted by John Hussman in his article "Equilibrium and the Dentist in Poughkeepsie." I highly recommend his occasional articles. No charge to sign up. Graham and Dodd were the authors of Security Analysis, the still in print bible of value investing. A Warren Buffet favorite. "Strictly speaking, there can be no - [AI Exposure of the U.S. Job Market](https://jeffharbaugh.com/ai-exposure-of-the-u-s-job-market/) - This interactive chart uses data provided by the Bureau of Labor Statistics and analyzed by Gemini (irony noted) to shows the potential AI impact according to the scale on the left side of the chart. The size of each boxes represent the number of jobs compared to all other job categories. The color is the - [The Iran War Belongs to Trump Now. Check for Slippery Slopes.](https://jeffharbaugh.com/the-iran-war-belongs-to-trump-now-check-for-slippery-slopes/) - The comparative military strengths of the U. S. and Iran was never an issue. The U.S. knew it could blow more stuff up. But that hasn't been enough to "win" if by win you mean getting a new regime in Iran willing to agree to all of the U.S.'s demands. Iran turned out not to - [How Did We Find Ourselves at War With Iran? Best Article Ever.](https://jeffharbaugh.com/how-did-we-find-ourselves-at-war-with-iran-best-article-ever/) - Published on December 13, 2024 Suzanne Maloney's explanation is the most concise and clearest explanation of how our relationship with Iran evolved I've ever seen. The title is "The Middle East’s Dangerous New Normal: Iran, Israel, and the Delicate Balance of Disorder." Here's the link. If you read this, you'll understand more than about 98% - [Lessons From Tacitus](https://jeffharbaugh.com/lessons-from-tacitus/) - Publius Cornelius Tacitus, a Roman historian and politician, was born around 56 A.D. In his book Annals, he described some economic dislocation that occurred in Rome around 33 AD. Read these two paragraphs slowly. Anything ring a bell? Sound at all familiar? It's always, always, always the same when too much debt accumulates. Eventually, the - [Are You Using AI? Or Being Used By It? Probably Both](https://jeffharbaugh.com/are-you-using-ai-or-being-used-by-it-probably-both/) - Hanna Horvath wrote a Substack article called, "The grift economy is going mainstream." It describes how AI can be used, and increasingly is being used, to take money out of our pockets. "This is the rip-off economy — or the grift economy — in its purest form: a world where everything — your attention, your - [When people talk about invading Cuba, I remember this quote:](https://jeffharbaugh.com/when-people-talk-about-invading-cuba-i-remember-this-quote/) - This is from David Halberstam's book The Best and the Brightest. - [How Has Investing Become a Form of Entertainment?](https://jeffharbaugh.com/how-has-investing-become-a-form-of-entertainment/) - David Bahnsen, founder of The Bahnsen Group, has written a very relevant article titled "Markets as a Video Game – January 23, 2026." He states, "Investing is not a game. I resist any attempt to infantilize decisions around capital allocation. I do not begrudge people having fun with a few bucks on Draft Kings or - [Only one person in 29% of U.S. Households- Note the Trend](https://jeffharbaugh.com/only-one-person-in-29-of-u-s-households-note-the-trend/) - I spotted this on 1/22/26 in a post by Torsten Slok. Free to sign up for his daily posts. We hear about all the younger people who are living with their parents, but then we see this chart. I worry they are all baby boomers. - ["Are Central Banks Enabling Unsustainable Government Deficits?" (Hint- Yes)](https://jeffharbaugh.com/are-central-banks-enabling-unsustainable-government-deficits-hint-yes/) - On January 12, 2026 Raghuram G. Rajan, a former governor of the Reserve Bank of India and chief economist of the International Monetary Fund, wrote the article with the title above. He begins: "Recent developments suggest that the US Federal Reserve's bond purchases are no longer just a "monetary operation," but an essential component of - [The More Things Change.....](https://jeffharbaugh.com/the-more-things-change/) - Here's a December 15th, 2025 article from Myrmikan Research called simply "Truth" on the history of paper money, gold and currency debasement. Read it if only for the quotes. Walk away from it knowing where we stand and what's always happened when a society stands here. The author writes early in the article: "The tragedy - [Energy Consumption Required for Improved Living Standards](https://jeffharbaugh.com/energy-consumption-required-for-improved-living-standards/) - This is one of the reasons I never expected demand for oil and gas to go away or even decline much. It is a fungible commodity. If you don't want it, somebody else trying to live better will buy it. - [Close to the End of the Bull Market?](https://jeffharbaugh.com/close-to-the-end-of-the-bull-market/) - Today (January 3, 2026) Jesse Felder (link to signup for Jesse's free publication is on my links page) posted this rather concerning list of factors suggesting the stock market was coming to the end. When. Neither Jesse or I know. But we are both increasingly worried, and I'm positioning family investments for that inevitability. Jesse - [Buy Now Pay Later and Other Economic Insanity](https://jeffharbaugh.com/buy-now-pay-later-and-other-economic-insanity/) - I was seriously stunned a month ago when The Robin Report told us that "Gen Z is a huge BNPL fan, with 72 percent using it." The article goes on to say, "And more than 76 percent of Americans use BNPL with 49 percent having missed a payment. I can see retailers liking BNPL because - [20 Days in Mariupol](https://jeffharbaugh.com/20-days-in-maniupol/) - Two freelance journalists in this Ukrainian city filmed and produced this award winning documentary on the first 20 days of the Russian invasion. It's 90 minutes long. Hard to watch, but necessary to watch. They were lucky to get out. Here's the link. - [Extracting Ourselves From Ukraine: Same As We Did in Vietnam](https://jeffharbaugh.com/extracting-ourselves-from-ukraine-same-as-we-did-in-vietnam/) - To be clear, following the Vietnam play book to get out of Ukraine is not a good thing. In this free essay on Substack, Warwick Powell, explains with irrefutable evidence from The Pentagon Papers how politics won out over people's lives when we lost in Vietnam. We're losing or have lost in Ukraine (that's my - [When China Starts to Own a Whole Supply Chain](https://jeffharbaugh.com/when-china-starts-to-own-a-whole-supply-chain/) - Eight years ago I wrote an article with the title "What Keeps Jeff Bezos Up at Night- And Why What He’s Doing Should Keep You Up." In it, I described some of the things Amazon was doing and why he might be worried about Chinese competition. Here's the link. I talk about Ali Express and - [Chart: Inflation Since the Fed Was Created](https://jeffharbaugh.com/chart-inflation-since-the-fed-was-created/) - To be clear, I'm not claiming the Fed is responsible for all our inflation. I will say that the recent 14 years of zero percent interest rates did cause some inflation. That misallocated capital, and made it easier for the government to keep borrowing. The chart is from Doug Casey's Crisis Investing. It's free at - [Chart: Interest On Our National Debt](https://jeffharbaugh.com/interest-on-our-national-debt/) - Interest on our national debt has crossed $1 trillion a year and is headed up. I believe the basic reason the Fed is cutting interest rates is to reduce interest cost on the debt. Obviously, that doesn't solve the problem- it just makes it get worse at a slightly slower rate. - [Changing Role of the U.S. Dollar: Why, How? With a Whimper- Not a Bang.](https://jeffharbaugh.com/changing-role-of-the-u-s-dollar-why-how-with-a-whimper-not-a-bang/) - “When nations can trade directly via blockchain platforms, settle in their own currency, and store value in physically-backed gold contracts, the dollar becomes increasingly optional." Tariffs and the uncertainty of an irrational trade war, the weaponization of the U. S. Dollar, seizure of Russia's dollar reserves, the impact of debt, the general historical cycle of - [Stock Market Leverage Always Ends Badly](https://jeffharbaugh.com/stock-market-leverage-always-ends-badly/) - Recommend you go to Wolfstreet.com and read his 10/16/25 post on this. There is just no way to feel good about this. Yes, I know- "This time is different." - [Who's Paying the Tariffs?](https://jeffharbaugh.com/whos-paying-the-tariffs/) - Today (10/13/2025) in The Boock Report, Peter Boockvar reported Goldman Sachs' take on who's paying the tariffs. "If recently implemented and future tariffs have the same eventual impact on prices as the tariffs implemented earlier this year, then US consumers would eventually absorb 55% of tariff costs. They estimate that US companies are eating 22% - [Where Do We Stand on Liquidity?](https://jeffharbaugh.com/where-do-we-stand-on-liquidity/) - Liquidity in our financial system refers to the overall amount of readily available money and credit in the financial system that can be used for spending, lending, or investment. It includes cash, bank reserves, money market balances, and short-term funding available to financial institutions and markets. You've heard about the Fed increasing or decreasing liquidity. - [The Real Impact of Inflation and Tariffs](https://jeffharbaugh.com/the-real-impact-of-inflation-and-tariffs/) - The Felder Report this week offers some information from generally well thought of sources on the real impacts of inflation and tariffs. Below is one of the graphs he features. Click on this link to go directly to the article. If you've had some sense that perhaps inflation is chronically under reported and aren't quite - [The end of Pax Britannica](https://jeffharbaugh.com/the-end-of-pax-britannica/) - Britain used to be the world's great power and it's currency the world's currency. What happened? Graeme Thompson explains it in this article he published on Engelsberg Ideas. Here's the link. He says at the beginning, " A mercantilist, multipolar geopolitical system appears to be emerging from within the liberal world order, destined to replace - [The Downsizing of America: Kraft Heinz’s Breakup Is Just the Beginning](https://jeffharbaugh.com/the-downsizing-of-america-kraft-heinzs-breakup-is-just-the-beginning/) - This article from The Robin Report (free to sign up for their daily posts on retail) is about grocery stores. Actually, that's not quite right. It's about choice and the fact that we're getting tired of having to choose among 20 kinds of detergent. Or cat food. Or ketchup. Etc. I find such a shopping - [A Little History on Presidents and the Federal Reserve](https://jeffharbaugh.com/a-little-history-on-presidents-and-the-federal-reserve/) - I believe in the concept of the Federal Reserve being independent. I don't like the idea of Trump (or any president) trying to control it. At this particular time, I don't think we need many, if any, interest rate reductions. A six to seven percent mortgage rate is a historical norm. You might consider that - [“Disruptive Change- When Trying Harder is Part of the Problem.”](https://jeffharbaugh.com/disruptive-change-when-trying-harder-is-part-of-the-problem/) - Harvard Business Review, May 2002. Interestingly enough, trying harder is a problem when the business environment changes because of the tendency to do more of the same thing you’ve always done. Typically, those things are not the right things to do anymore. As I’ve written, this corresponds to my own experience doing turnaround work. You - [From 1728, this quote on the relationship between banks and government might sound familiar.](https://jeffharbaugh.com/from-1728-this-quote-on-the-relationship-between-banks-and-government-might-sound-familiar/) - Richard Cantillon's "Essay on the Nature of Trade in General" will resonate with you. He was one of the first guys to make a bunch of money in a bubble. Here's what he said about the relationship between banks and government. Sound at all familiar? “It is then certain that a bank, in concert with - [What About Brands?](https://jeffharbaugh.com/what-about-brands/) - Many years ago, I wrote a Market Watch column on branding. I opined that the importance of brands might be declining in the action sports world as products became reliable and similar. My friend and, at that time, editor Sean O’Brien at Transworld thought enough of it to immediate publish it online without telling me. - [Inside the Relentless Race for AI Capacity](https://jeffharbaugh.com/inside-the-relentless-race-for-ai-capacity/) - That's the title of a scroll through presentation by the Financial Times. It shows and discusses the growth, and projected growth, of data centers. Talks about the energy needs and cooling requirements (resulting in more energy needs) and some of the solutions big players are pursuing. Here's the link. You probably thought, like I did, - [Historical Tariff Rates in the U.S.](https://jeffharbaugh.com/historical-tariff-rates-in-the-u-s/) - I don't know what the actual tariff rates will finally turn out to be. The chart shows you that they haven't been this high in 75 plus years. Economists argue about the impact of the Smoot-Hawley tariffs (19.8%- show in the chart) but it wasn't good. Tariffs never have an overall positive impact on any - [The Reality of American Manufacturing](https://jeffharbaugh.com/the-reality-of-american-manufacturing/) - "The current national conversation about manufacturing confuses a reduction in manufacturing jobs with a slowdown in U.S. manufacturing. Period. Once we have properly understood this distinction, unpacked the reality of both, cared to look into the causation of both, and fully analyzed what it all means, we will have a much more effective understanding of the - [Future History; What's the Price of Success](https://jeffharbaugh.com/future-history-whats-the-price-of-success/) - Originally, it was enthusiast driven. People started companies because it was an important part of their lives and they wanted to be part of what was happening. It wasn’t just about a sport- it was an attitude and a lifestyle. At first bigger companies in related sports weren’t interested because the market wasn’t large enough. When they got - [Just Who Are We Anyway? Perceptions of Market and Industry Evolution](https://jeffharbaugh.com/just-who-are-we-anyway-perceptions-of-market-and-industry-evolution/) - One day, a few years ago, we looked up and had become “the snowboard industry.” Growth, friends, good margins, optimism, an endearing naivete about the future and a quotient of bullshit was all part of what made it fun. The boundaries were clear. We were on the right side of that boundary and knew what was up. If you - [Building a Business; Issues for Would be Skate Entrepreneurs](https://jeffharbaugh.com/building-a-business-issues-for-would-be-skate-entrepreneurs/) - When a market gets hot, people start companies. Where the capital costs and entry barriers are low, they start more rather than less. When there’s enthusiasm for the industry and the lifestyle, they often start them for all the wrong reasons, and without adequate or any business planning. It looks like easy money, but it usually isn’t. - [News from the North; Lessons for the Snowboard Industry from Canadian Resorts](https://jeffharbaugh.com/news-from-the-north-lessons-for-the-snowboard-industry-from-canadian-resorts/) - Last April, I headed to Tremblant for the Canadian Ski Council’s annual symposium on the state of the Canadian resort industry. Naturally, my naïve anticipation of great snowboarding had nothing to do with my decision to go. Groomed hardpack with mud and rocks sticking through on narrow runs wasn’t what I’d expected. Thanks El Nino. At least it - [Life in the Real World; Hoisted by My Own Petard](https://jeffharbaugh.com/life-in-the-real-world-hoisted-by-my-own-petard/) - I’ve had the luxury, over the last couple of years, to be able to dispense advice and commentary from the relative safety of an observer’s perch. Suddenly and, amazingly, of my own choosing, I’ve given up a perfectly comfortable life style to reenter the snowboard management fray. I must be out of my mind. I’ve done this - [Hung Over, Jet Lagged, and Sleep Deprived; A View of the Industry from 37,000 Feet](https://jeffharbaugh.com/hung-over-jet-lagged-and-sleep-deprived-a-view-of-the-industry-from-37000-feet/) - The specialty shop in Vienna was all snowboards and snowboard products. It was mostly last year’s stuff and was all on sale. Word was that financial problems were preventing them from getting new stuff. Over at a big Intersport store, there was just as much space devoted to snowboard products and the deals were just as good. I’d - [Specialty Snowboard Shops and the Industry Consolidation; Who Are They and What’s Happening to Them?](https://jeffharbaugh.com/specialty-snowboard-shops-and-the-industry-consolidation-who-are-they-and-whats-happening-to-them/) - Over the last month, I’ve stopped by eight or ten snowboard retailers in the Northwest. I talked to the owner, manager, or whoever was around and not too busy to talk with me. The number of stores I went in probably isn’t large enough to be statistically significant, the stores were picked based on my personal biases, - [Snowboard Industry Evolution; Is It the Survival of the Fattest?](https://jeffharbaugh.com/snowboard-industry-evolution-is-it-the-survival-of-the-fattest/) - The snowboard industry is changing so quickly that I find myself looking back at articles that haven’t been published yet and wondering if I’ll agree with what I wrote by the time it’s in print. When Adidas buys Salomon, Quicksilver buys Mervin, Elan talks about putting its own name on a board, and Nike makes a - [The Financial Impact of Consolidation; Why Is It So Hard on Smaller Companies?](https://jeffharbaugh.com/the-financial-impact-of-consolidation-why-is-it-so-hard-on-smaller-companies-3/) - It’s conventional wisdom that smaller companies are having an especially tough time meeting their financial needs, or even surviving, in the snowboard industry shakeout. It’s so conventional it’s taken for granted; even chanted like a mantra at times. And it’s true. But why exactly? What are the specific changes in the financial operating environment of smaller companies that’s - [Market Niches; Gimme One! Now! But How?](https://jeffharbaugh.com/market-niches-gimme-one-now-but-how/) - Last issue I took most of this space to discuss some tactical measures businesses could take to respond to the extremely difficult competitive conditions in the snowboard industry. I went on to say in what may have seemed like an after thought that none of those measures mattered if you didn’t have a way to compete. That - [Now What Do We Do? Living With the Industry’s Success](https://jeffharbaugh.com/now-what-do-we-do-living-with-the-industrys-success/) - I guess you can start by congratulating yourself. Though the snowboarding industry is still relatively small ($800 million at wholesale?) it’s continuing to grow at a rate most industries can only dream of and is clearly here to stay. You’ve been a part of that. But now, you are face to face with the results of - [Winter Resorts and Snowboarding; Why Does It Seem Like an Arranged Marriage?](https://jeffharbaugh.com/winter-resorts-and-snowboarding-why-does-it-seem-like-an-arranged-marriage/) - The Medici family of Italy rose to commercial prominence during the renaissance at least partly because of their ability to make or receive payments in widely dispersed geographic locations. Lacking a wire transfer system, they arranged marriages between family members and other prominent merchants in commercial centers that gave them the ability to move money or - [How a Brand Makes Money In the Snowboard Business](https://jeffharbaugh.com/how-a-brand-makes-money-in-the-snowboard-business/) - Don’t get too comfortable. This is a short article that won’t take long to read. It’s a direct result of that moment in Vegas when I finally decided I wasn’t dreaming and that there actually were a bunch of new snowboard brands and new factory capacity. What makes it even worse is that some of these companies appear - [Hard Learned Lessons; You Can Do Everything Right and Still Get Screwed](https://jeffharbaugh.com/hard-learned-lessons-you-can-do-everything-right-and-still-get-screwed/) - This is the industry. Snowboarding. Some are in it to make a buck, some because they love the sport and just want to make a living doing what they love. Occasionally, the two collide and the golden rule prevails; the one with the gold makes the rules. When there’s a business lesson to be learned that might help some - [US Market Conditions and the Globalization of Snowboarding](https://jeffharbaugh.com/us-market-conditions-and-the-globalization-of-snowboarding/) - Last year when somebody said to me “Write about US market conditions” it was easy. You could think of the US, Japan and Europe as distinct markets and approach the trends in each accordingly. But overcapacity and the slowing of growth have made that harder, and the interdependence of the three markets has become much more obvious. - [Minding Your Own Business; How’s Your Shop Doing?](https://jeffharbaugh.com/minding-your-own-business-hows-your-shop-doing/) - Last month in this space I suggested a simple system for tracking your financial results with the goals of having better control and being able to react to surprises. If you use it for, say, six months, you are going to have some good information that will have helped you manage your shop. The next step, which - [Selling Your Business How to Get Ready and What to Expect](https://jeffharbaugh.com/selling-your-business-how-to-get-ready-and-what-to-expect/) - At some point, every business owner considers selling their company. Most that don’t go out of business are sold at some time in their history. But between considering it and selling are a host of issues, surprises, conundrums, and general confusions for the business owner who has never been through the process before. I have spoken with or heard - [Beset by Opportunities; How Can We Take Advantage of Them?](https://jeffharbaugh.com/beset-by-opportunities-how-can-we-take-advantage-of-them/) - There are sixty million kids people in the United States between the ages of 5 and 20. Over half of them haven’t entered adolescence yet. It’s the biggest demographic bulge since the baby boomers. Every large, mainstream company in this country from Levis, to JC Penney to Fidelity Mutual Funds needs credibility and brand recognition with - [Good News And Bad News; Ride Reports Third Quarter and Preseason Orders.](https://jeffharbaugh.com/good-news-and-bad-news-ride-reports-third-quarter-and-preseason-orders/) - It must suck to be the only public, pure snowboard company left standing. All the other snowboard brands are suffering from some of the same industry issues as Ride, but they can equivocate about it with impunity. But Ride’s management wouldn’t want to do that anyway. Like the title says, there’s good news - [Changes in Market Focus; The New Snowboarding Reality](https://jeffharbaugh.com/changes-in-market-focus-the-new-snowboarding-reality/) - Most of us are in a different business than we were a few years ago. Retailer, brand, manufacturer, or even consultant, our customers have changed. There are only a handful of companies out there that can say they are snowboard companies. Others have adjusted their strategies, or aren’t around anymore. Remember the “C” word? Consolidation wasn’t just about a - [Numbers, Numbers Everywhere And Who Knows What They Mean](https://jeffharbaugh.com/numbers-numbers-everywhere-and-who-knows-what-they-mean/) - I do confess it. I was trained as a finance guy. I have an MBA, started out in international banking (Ask me about Carnival in Brazil sometime!), and did some corporate treasury and investment banking kind of work. Given the way things have changed, I decided it was okay to come out of the closet. Please don’t throw me - [Competitive Challenges; Four Things You've Got to Do Better](https://jeffharbaugh.com/competitive-challenges-four-things-youve-got-to-do-better/) - In the August 1999 issue of SKATE Biz (Volume 11 Number 1), I wrote about two hypothetical skateboard factory owners, Dr. Jekyll and Mr. Hyde. Dr. Jekyll’s production was strictly OEM. Mr. Hyde had a successful brand and built his product at his own factory. They both made a bunch of perfectly logical and rational - [Snowboarding the Internet; Taking the Tour at 26.4](https://jeffharbaugh.com/snowboarding-the-internet-taking-the-tour-at-26-4/) - Slow connections suck. So while we wait for my 56k modem to connect at 26.4 kbs, consider this. All the dotcoms with money (typically from an egregiously successful public offering) are advertising like mad. On TV, on the sides of buses, everywhere. Why? Because there’s not much difference between Barnes&Noble.com and Amazon.com if you want - [Sam And The Gradunzel-Eating Monster; It’s (hopefully) a fairy tale.](https://jeffharbaugh.com/sam-and-the-gradunzel-eating-monster-its-hopefully-a-fairy-tale/) - Long, long ago in an industry far, far away (cue the heroic music), the sale of moss-covered, three-handled family gradunzels* had taken off. Now, gradunzels had been around for a long time, and they were manufactured by a dedicated group of companies, the founders and owners of which had been among the earliest users of - [Thoughts From the Action Shoe Retailer Show; Opps- Did I Get That Wrong?](https://jeffharbaugh.com/thoughts-from-the-action-shoe-retailer-show-opps-did-i-get-that-wrong/) - This article sort of took shape the Monday the show ended. In the first place, I was flying back to Seattle on an Alaska Airlines MD80, which didn’t exactly put me in a positive frame of mind. Second, thanks to the ticket to the Sunday evening Gallas party Jeff Cutler gave me, I was suffering from the - [Using Consumer Data for Marketing Decisions; "Yeah, We Ought to do More of That."](https://jeffharbaugh.com/using-consumer-data-for-marketing-decisions-yeah-we-ought-to-do-more-of-that/) - It's a bad idea to write something requiring you to talk to the marketing people at snowboard companies during the selling/tradeshow season. But the topic is a critical one. Most companies in this industry don't do a good a job collecting and utilizing consumer information as they should. They understand that success in a tough market requires it, - [Skateboards on the Internet; “You Can Get Anything You Want…….”](https://jeffharbaugh.com/skateboards-on-the-internet-you-can-get-anything-you-want/) - I girded up my loins (you’d think doing that would hurt) and sat down to research this story, fully expecting to have to visit dozens of web sites and to check each of them out utilizing my infuriatingly slow web connection. My web connection is, indeed, infuriatingly slow, but it looks like there may be - [Snowboards from Afar; The Potential Impact on Retailers](https://jeffharbaugh.com/snowboards-from-afar-the-potential-impact-on-retailers-2/) - In the early 90’s, when snowboards started pouring into the U.S. from the Austrian ski factories, there were claims that consumers wouldn’t accept boards labeled “Made in Austria.” Mostly, those claims were made by U.S. factories threatened by foreign production. If there was a marketing advantage to a board “made in the USA,” it didn’t last long, - [Public Wisdom, Maybe; Comparing the 1999 and 2000 Buyers Guides](https://jeffharbaugh.com/public-wisdom-maybe-comparing-the-1999-and-2000-buyers-guides/) - I hold in my hand the Transworld Skateboard Buyers Guides from 1999 and 2000. Everything you could possibly want to know about decks, trucks, wheels, and bearings are in these guides. Well, okay, Transworld exercises some discretion in which brands make it into the guide and which don’t. All the product from each brand isn’t necessarily - [Quality Financial Planning for Every Action Sports Retailer; No Accounting Degree Required](https://jeffharbaugh.com/quality-financial-planning-for-every-action-sports-retailer-no-accounting-degree-required/) - Rarely, but once in a while, I come across something I want to plug. Not too long ago, it was the new Board Retailers’ Association ( www.boardretailers.com . If you haven’t joined yet, get moving. Opps, there I go plugging them again.). This time, it’s some inexpensive, easy to use, financial planning software that the Retail - [The Retailer’s Dilemma; Are There Any Snowboard Shops Left?](https://jeffharbaugh.com/the-retailers-dilemma-are-there-any-snowboard-shops-left/) - Use to be that I’d scurry home from Vegas in March with my extra backpack full of snowboard dealer packages and, like a kid at Christmas, throw myself into them to see what was new. It still takes an extra backpack (though a smaller one- fewer brands but a lot more pages per brand). This year, though, - [The Dot Com Equation; What Does it Take to Make Money?](https://jeffharbaugh.com/the-dot-com-equation-what-does-it-take-to-make-money/) - In internet years, it seems like ancient history. But it really wasn’t long ago when it was taken for granted that on line retailing represented a new paradigm in selling to consumers. Maybe it still does- or will. But so far, making money as an online only retailer has proven illusive. How come? How many pairs of surf trunks do - [“I Don’t Think We’re In Kansas Anymore, Dorothy.” Skate Retailers in the Lifestyle Market](https://jeffharbaugh.com/“i-dont-think-were-in-kansas-anymore-dorothy-”-skate-retailers-in-the-lifestyle-market/) - Let me start by telling you, in no particular order, some things you already know. 1) Margins on hard goods suck, but carrying them draws customers in and legitimizes you as a skate retailer. 2) Truth be known, hard goods from different brands are pretty much the same. You may have some brand loyalties, but - [Tulips](https://jeffharbaugh.com/tulips/) - I walked out of ASR feeling positive about skateboarding and its market and will discuss why below. Still, when things look too good to be true, it’s been my experience that they usually are and I’m as susceptible to the hype as the next person. Let’s start, then, with this cautionary tale from Edward Chancellor book “Devil - [Benefiting from Recent Industry Initiatives; It’s Up to Each of You](https://jeffharbaugh.com/benefiting-from-recent-industry-initiatives-its-up-to-each-of-you/) - By now, you should all have seen SIA’s study “Growing the Snow Sports Industry” and NSAA’s growth model for the resort business. They don’t claim that any industry initiative by a trade association is the salvation of the winter sports industry’s issues of participation and profitability. They say, if not exactly this way, “It’s up to each - [I Think I See a Plan. News From the Ski Industry Summit](https://jeffharbaugh.com/i-think-i-see-a-plan-news-from-the-ski-industry-summit/) - Okay, what was I doing at the Ski Industry Summit (formerly known as Ski Week) and why am I writing about it for Snow Biz? Anybody got a problem with some early season turns in Vail when there’s hardly anybody here? Didn’t think so. Also, there was an open bar each night. But aside from the - [Everybody Needs a Balance Sheet; Notes from the Conference Retailer Panel](https://jeffharbaugh.com/everybody-needs-a-balance-sheet-notes-from-the-conference-retailer-panel/) - It’s not that this group of retailers, speaking at the Transworld Industry Conference in Banff, was wrong in the comments they made about how suppliers work with them. God knows I wouldn’t want to be a snowboard retailer and, in the words of one participant, it may indeed be a good year if you manage to - [Sell!? Maybe It’s Time to Think About It](https://jeffharbaugh.com/sell-maybe-its-time-to-think-about-it/) - Here we all are, back from ASR and boy are we excited. More brands, more excitement, hype, orders, deals, three page ads in Skate Biz. People can’t get enough of skateboarding There’s nowhere for business to go but up, and it’s got to be even better next year. Unless, of course, it’s not. As a business - [Recession? You're Kidding- Right? Please?](https://jeffharbaugh.com/recession-youre-kidding-right-please/) - The NASDAQ stock market rocketed towards heaven for several years. Its decline has been equally spectacular. Four trillion dollars of value have been wiped out in a year. It’s matched its worst fall ever in percentage terms, but it’s done it in half the time. Should we be surprised? No. The statistical concept of “regression to the mean” is working like - [Questions That Retailers Should Always Have Answers To](https://jeffharbaugh.com/questions-that-retailers-should-always-have-answers-to/) - When I start writing these articles, I always have to remind myself who the audience is. The Skateboard Industry, of course and, based on the circulation of Skate Biz, skateboard retailers especially. That’s where things get a little tougher, because what I know is that skateboard retailers don’t just sell skateboards and they don’t just - [A Good Snow Year Does Not Make Us Heroes of Management; A Minor Reality Check](https://jeffharbaugh.com/a-good-snow-year-does-not-make-us-heroes-of-management-a-minor-reality-check/) - 1980- Michael Porter, the Harvard strategy Guru published Competitive Strategy. In it, he discusses how industries change, and how companies have to change, as they transition from growth to maturity. I want to look briefly at what Porter says stereotypically happens during this transition and see how it applies to the winter resort business. Like all - [Product Selection and Merchandising: The Blackjack Analogy](https://jeffharbaugh.com/product-selection-and-merchandising-the-blackjack-analogy/) - I guess this is a little incestuous, but the idea for this column came from reading Sharon Harrison’s “Ten Shops, One Question” in the June issue of this prestigious rag. The question was “What type of bearings are skaters in your shop buying?” What struck me was how each retailer had similar, but different answers. It - [Cash Flow Revisited; Why Hardly Any Successful Business is Just Snowboarding Anymore](https://jeffharbaugh.com/cash-flow-revisited-why-hardly-any-successful-business-is-just-snowboarding-anymore/) - I know it’s because of crossover, and the mainstreaming of action sports, and because we’re selling to parents as much as to kids. I know all that. Largely, I believe it. I just did my occasional and not nearly frequent enough sojourn into a bunch of local snowboard retail stores, big and small, and looked at what they’re - [“Hey! How Come You’re Still Around?” Conversations With Survivors](https://jeffharbaugh.com/hey-how-come-youre-still-around-conversations-with-survivors/) - It’s old news, of course, that we’ve gotten to the point in this industry where probably north of eighty-five percent of the snowboards sold come from a handful of brands, mostly made by ski companies with the usual exception. And if that concentration is not how we’d like it to be, it’s how it almost always - [Potential Impact of War and Recession on the Snow Sports Industry; Relevant Statistics and Possible Strategies](https://jeffharbaugh.com/potential-impact-of-war-and-recession-on-the-snow-sports-industry-relevant-statistics-and-possible-strategies/) - We were looking at a recession before the September 11 attacks on the World Trade Center and the Pentagon and the tragedy raised the possibility (certainty in the minds of many) that the recession would be longer, deeper or both then it would otherwise have been. Economic activity has already rebounded since its nadir in the - [Stuck In A Rut; Another Recession Article](https://jeffharbaugh.com/stuck-in-a-rut-another-recession-article/) - Look, I'm sorry about this. I'd really rather write about upbeat, happy stuff. It’s not my fault we’re in a recession, or are going to be in one, or whatever. I'm not making up these lousy economic statistics we’re seeing, you now. I don’t just sit here and pull them out of my ass, damn it. Sure, sure, everybody just - [What To Do in a Recession? Hint: “Nothing” is the Wrong Answer](https://jeffharbaugh.com/what-to-do-in-a-recession-hint-nothing-is-the-wrong-answer-2/) - I'm sure that everybody who was in the snowboard business during the 1990-91 recession liked that one better than we’re going to like this one. Assuming, of course, that you even noticed the one in 1990-91. Ah, those were the good old days- when suppliers and retailers could sell whatever decks they could manage to get their - [We Win. Now What? Ruminations on the Future of Skateboarding](https://jeffharbaugh.com/we-win-now-what-ruminations-on-the-future-of-skateboarding/) - The “AHAA!” moment at the ASR show came early for me. I'd just flown in from the SIA winter sports show in Vegas and literally walked in the door at ASR when I heard that the ubiquitous ASR Board Trac seminar had already started. I was fifteen minutes late. When I walked in, they were questioning ten “typical” - [Changes in the Skateboard Competitive Environment. Time to Run Your Business Differently?](https://jeffharbaugh.com/changes-in-the-skateboard-competitive-environment-time-to-run-your-business-differently/) - It’s interesting how a handful of events and business trends seem to be converging in skateboarding at this time. They have, I think, the potential to change the industry and how it does business. The consumers, as always, will get what they want. For some companies- usually those willing to take a risk and do something a little - [China- Whether We Like It or Not. What's to Do?](https://jeffharbaugh.com/china-whether-we-like-it-or-not-whats-to-do/) - Okay, let’s review the rules. 1) The consumer eventually gets what they want to the extent the market is capable of providing it. 2) Companies do whatever they perceive will give them a competitive advantage, or at least let them survive. 3) The less real differentiation there is among products in the same product - [Don’t Worry, Be Happy, Part II; Skateboarding will Survive a Slowdown](https://jeffharbaugh.com/dont-worry-be-happy-part-ii-skateboarding-will-survive-a-slowdown/) - It was three or four months ago that I stopped getting the nearly weekly calls and emails from somebody who wanted to open a new skate shop. As weeks dragged on without the sound of enthusiastic voices eager to make their mark in skateboard retailing I wondered if that wasn’t a sign of a market top. - [Dr. Jekyll or Mr. Hyde; The Dilemma of the Skateboard Factory Owner](https://jeffharbaugh.com/dr-jekyll-or-mr-hyde-the-dilemma-of-the-skateboard-factory-owner/) - “Blanks are killing the industry.” “Yeah, but they give the skater a good deal.” “But pros are what builds the industry, and we can’t support pros on blank margins.” “The problem is that we have too many pros to support.” Etc., etc., etc. In this highly emotional debate, there’s some truth to everybody’s position. A lot of people seem to - [The End of the Beginning; Observations from Glitter Gulch](https://jeffharbaugh.com/the-end-of-the-beginning-observations-from-glitter-gulch/) - “Now, this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Overall, Vegas showed signs of being the end of the beginning of the snowboard industry’s consolidation process. Which is convenient, since I’ve always wanted to use that quote. The first person who identifies - [Getting In Deep Trouble; Why Companies Get There, and What it Takes To Recover](https://jeffharbaugh.com/getting-in-deep-trouble-why-companies-get-there-and-what-it-takes-to-recover/) - It doesn’t matter if you’re a retailer, distributor or manufacturer. It doesn’t even matter if you’re in the snowboard business. In every industry, companies get in trouble for the same basic reasons, and require the same things to recover All businesses in trouble share two characteristics: denial and perseverance in the face of inescapable change. It's easy to - [Money: That’s What I Want. Sources of Capital for a Growing Business](https://jeffharbaugh.com/money-thats-what-i-want-sources-of-capital-for-a-growing-business/) - If your only business is snowboarding, you need money for three reasons. First, your business should grow at least as fast as the industry, and that growth translates into more cash tied up in the business. Second, extreme seasonality and the extended dating customers are demanding requires more working capital. Finally, tough competitive conditions are probably reducing margins, - [Tackling The Snowboard Industry Buy/Sell Cycle Are We Trying to Fix the Wrong Problem?](https://jeffharbaugh.com/tackling-the-snowboard-industry-buysell-cycle-are-we-trying-to-fix-the-wrong-problem/) - The buy/sell cycle seems to be on everybody’s mind these days. The brands are concerned because the decline of in season orders means they have to take more inventory risk. Retailers, on the other hand, are thrilled to be able to get quality product in season at discounts, though are perhaps concerned that it’s tougher to hold - [Resort Retention and Occam’s Razor; Keeping it simple makes a lot of sense.](https://jeffharbaugh.com/resort-retention-and-occams-razor-keeping-it-simple-makes-a-lot-of-sense/) - William of Occam was a Fourteenth century logician and Franciscan friar born in the English village of Ockham and, yes, somehow I’m going to get this back to snowboarding without claiming that he invented the first one. He’s the author of what’s become known as Occam’s Razor. It states, in its original form, "Entities should not - [You Did What !!?? Starting a New Snowboard Brand](https://jeffharbaugh.com/you-did-what-starting-a-new-snowboard-brand/) - Your first reaction is that they must be crazy. Starting a new brand when the snowboard market is dominated by five companies fighting to take market share from each other, pushing distribution to every corner of the retail world and, to some extent, using price as a weapon in the battle doesn’t seem to make a - [Reality Check; Input From the Outside World](https://jeffharbaugh.com/reality-check-input-from-the-outside-world/) - Sometimes I get accused of being too much of a pessimist. Maybe sometimes I am. On the other hand, maybe the correct question is whether or not my occasionally pessimistic outlook is justified . I'd prefer to think I'm just taking a hard look at real business issues. For a change, I'm going to let somebody else - [Wherever You Go, There You’ll Be. I Can’t Think of a Subtitle](https://jeffharbaugh.com/wherever-you-go-there-you’ll-be-i-can’t-think-of-a-subtitle/) - It’s 2002 and I think the five biggest snowboard companies, in alphabetical order, are Burton, Gen X, K2, Rossignol, and Salomon. Gen X is owned by Huffy and Salomon is part of Adidas, so maybe I should change the alphabetical listing. But the point, and I hope this helps me think of a subtitle, is that - [Focus on Expense Control; A New Business Model for Skateboarding](https://jeffharbaugh.com/focus-on-expense-control-a-new-business-model-for-skateboarding/) - Well, maybe not a new business model. Expense control is always important. But somehow, in every industry I’ve ever seen, it’s always assigned a lower priority when you’re selling everything you can make. Cash flow makes it easier to not worry so much about how you’re spending your money. You’ve no doubt noticed that skateboarding (especially in hard - [Consolidation, War, and a Lousy Economy;Skateboarding Will Be Fine, Thank You Very Much](https://jeffharbaugh.com/consolidation-war-and-a-lousy-economyskateboarding-will-be-fine-thank-you-very-much/) - It doesn’t seem fair. Okay, after the 90s, some economic slow down was inevitable and most industries are having to deal with it. Skateboarding, after a few years of simply spectacular growth was due for a consolidation, and we’re getting it in spades. War, of course, isn’t good for already soft consumer spending- too many people staying home to - [“Say, That Sounds Like a Good Idea!” The New Board Retailers’ Association](https://jeffharbaugh.com/say-that-sounds-like-a-good-idea-the-new-board-retailers-association/) - Like the web site (www.boardretailers.org) says, the idea for the Board Retailers’ Association (BRA?) goes back to the mid eighties and has been discussed annually. But for the past year, Roy Turner, the owner of Surf City Surf Shop in Wrightsville Beach, North Carolina, and Mike Duncan of Sage Corporation, a web applications firm with roots - [Strategic Planning; Questioning Our Most Cherished Assumptions](https://jeffharbaugh.com/strategic-planning-questioning-our-most-cherished-assumptions/) - This article sort of popped full formed into my brain at the TransWorld Snowboard Industry Conference at Whistler in April. It happened in an elevator. A kid carrying a skateboard got in (Shows you what kind of lousy winter it was in Whistler). As the door closed, I asked him how often he replaced his deck. He said, “I’ve - [China’s Fixed Exchange Rate; What It Means for Snowboarding](https://jeffharbaugh.com/chinas-fixed-exchange-rate-what-it-means-for-snowboarding/) - My very first article for TransWorld, which became Market Watch, was on foreign exchange. I guess in some sense we’ve come full circle. But it’s never much fun ending up where you started, so I want to ask your help in keeping Market Watch valuable to you and occasionally controversial. It use to be, when the pace - [Product Line Size; The Impact on the Way We Do Business](https://jeffharbaugh.com/product-line-size-the-impact-on-the-way-we-do-business/) - It began, I suppose, a couple of months ago when somebody at Burton sent me their complete catalog, buying book, whatever you want to call it, including prices and terms. Damn near five pounds it weighs according to my handy, dandy bathroom scale including colorful blue binder. It contains all of the Burton Company’s brands and certain - [How to Survive a Downturn And Take Advantage of the Opportunity It Represents](https://jeffharbaugh.com/how-to-survive-a-downturn-and-take-advantage-of-the-opportunity-it-represents/) - In previous articles, going back to when skating was growing like the proverbial weed, I’ve talked about issues related to a downturn. Things like expense control, if you should sell your business, characteristics of a maturing market, cash flow management, the impact of a recession, and the potential impact of foreign competition. Given the continuing, current conditions - [One Possible Future; An Industry Model for Skateboarding](https://jeffharbaugh.com/one-possible-future-an-industry-model-for-skateboarding/) - Last month, I wrote about surviving a downturn, suggesting that this wasn’t just a downturn but a fundamental change in industry structure, requiring a change in the way successful companies competed. This month, I'd like to be more specific about how I see the industry evolving. It’s perhaps a bit pompous to do this, because my - [Now What? The Established Shop Owner’s Dilemma](https://jeffharbaugh.com/now-what-the-established-shop-owners-dilemma-3/) - You started it because it was going to be fun. You were younger- a lot younger. And perhaps just a bit naïve and optimistic. You didn’t know what it was about margins that made everybody think they were gross, but what the hell. If you could hang with your friends, do what you loved and have a few beers - [Snowboard Company Business Models and Core Retailer Problems; A Basic Incompatibility?](https://jeffharbaugh.com/snowboard-company-business-models-and-core-retailer-problems-a-basic-incompatibility/) - “They may put me out of business and they can’t even put a wax on a board!” said the snowboard retailer about the Zumiez down the street. I talked to him enough to know that he wasn’t kidding and he wasn’t being sarcastic and he wasn’t just trying to make a point. After a bunch of - [Chop Chop, Fizz Fizz, Oh What a Morass It Is!](https://jeffharbaugh.com/chop-chop-fizz-fizz-oh-what-a-morass-it-is/) - Apologies to the Alka Seltzer people for bastardizing one of their old advertising slogans. It just sort of sprang into my head the moment I saw Dwindle’s announcement on their Chop Chop Wood Shop. I assume it occurred to somebody that the name might be offensive to the Chinese, but this is probably just some form of - [Watching the Big Box Selling Process; Thoughts for the Specialty Retailer](https://jeffharbaugh.com/watching-the-big-box-selling-process-thoughts-for-the-specialty-retailer/) - Store One I would guess the girl was 14. She was at this big box sporting goods store with her parents picking out a board, boots and bindings. She didn’t say much and was following her parent’s lead. Their credit card I suppose. It isn’t easy, you know, to hang around through the whole sales process- - [By the Numbers; The Impact of Price and Margin Changes](https://jeffharbaugh.com/by-the-numbers-the-impact-of-price-and-margin-changes/) - Two issues ago, I suggested one possible future for the skateboard industry that I really don’t want to see happen, but which we all have to consider. Last issue, I suggested some questions you needed to ask to figure out the financial impact on your company. This issue, let’s drill down one more level and - [Business By The Numbers; Simple Questions a Shop Owner Can Ask Regularly to Stay in Control](https://jeffharbaugh.com/business-by-the-numbers-simple-questions-a-shop-owner-can-ask-regularly-to-stay-in-control/) - If your typical day is a series of disruptions and interruptions like that of many small business owners, then you may find yourself having difficulty controlling your business and knowing with certainty where you stand on a day to day basis. All businesses face challenges. Those challenges are most easily met if focused on early. What starts out - [Buying Smart; Selecting Among Snowboard Brands](https://jeffharbaugh.com/buying-smart-selecting-among-snowboard-brands/) - Ain’t business grand? You’ve got a choice of something over 100 snowboard brands to sell in your shop. ‘Course, 20 of them will be gone by the time the snow melts and next year there’ll be 35 new ones. Delivery, not to mention service, is uncertain. Some of those new companies will be only as real as the - [The Enthusiast Cycle; Lessons From the Scuba Diving Industry](https://jeffharbaugh.com/the-enthusiast-cycle-lessons-from-the-scuba-diving-industry/) - Yes, the scuba diving industry. Maybe nine months ago Fran Richards, former VP at TransWorld and somebody whom I consider one of the best intuitive marketing guys in action sports, called me up and said, “Hey Jeff, I’ve given your name to the guys at the Dive Equipment Manufacturers Association!” “Uhhhhh, thanks Fran, that’s great, I - [Company Stores and Retail Consolidation; What’s a Core Store to Do?](https://jeffharbaugh.com/company-stores-and-retail-consolidation-whats-a-core-store-to-do/) - At the Surf Industry Conference last May, I was the last one to ask a question of a panel of very successful specialty retailers. I acknowledged that I was sure they would all continue to be successful, though I doubted they were representative of most retailers out there. And then I asked them, “So what happens in - [“Jeff, This is a Hard Business!” Why Is That and What Can You Do About It?](https://jeffharbaugh.com/jeff-this-is-a-hard-business-why-is-that-and-what-can-you-do-about-it/) - That unsolicited quote is from the President of a snowboard brand that you all know and that’s been around for a while. It would generally be considered successful. I consider it successful. It’s not the first time I’ve heard the comment. I’ve responded by agreeing and by explaining why it was true. Over the years I’ve had some suggestions - [“Hey Look! Real Retailer Numbers!” What’s to Learn From Them?](https://jeffharbaugh.com/hey-look-real-retailer-numbers-whats-to-learn-from-them/) - For a while now, I’ve been carrying around in my back pocket the National Sporting Goods Association’s 2004-2005 Cost of Doing Business Survey. I have no idea why they call it that since it obviously doesn’t contain any numbers from either 2004 or 2005. Well, never mind. They do it every other year and collect - [A Living, Breathing Thing; Cash Flow Management](https://jeffharbaugh.com/a-living-breathing-thing-cash-flow-management/) - That’s actually the way he put it to me. Many years ago, the CEO of a company that had been in deep financial trouble and had clawed its way out said, apparently in frustration with my failure to understand his concept, “You don’t understand, the cash flow is a living, breathing thing.” Now I know he - [Living in the Past- Or Not; The New Old Skateboarding](https://jeffharbaugh.com/living-in-the-past-or-not-the-new-old-skateboarding/) - I can’t be the only one it’s occurred to that skateboarding seems to have dodged its historical cycle of disappearing and being reborn every ten years. I think that’s a good thing, though shrinking to nothing and more or less starting over had the advantage of letting everything be fresh and rediscovered. True, sales fell from - [Small Brands Are Cool! How Can They Stay That Way?](https://jeffharbaugh.com/small-brands-are-cool-how-can-they-stay-that-way/) - Actually, the question is not how small brands can stay cool. It’s how they can stay at all. As in stay here- alive, in existence, solvent. Not toast. I have been so encouraged by the number of small brands I’ve seen in snowboarding recently. I love them. There was a bunch at the SIA show in Vegas. There were some of - [The Basis of Competition; How Do We Sell More Stuff?](https://jeffharbaugh.com/the-basis-of-competition-how-do-we-sell-more-stuff/) - It’s funny how the fundamentals of business never change. Three years ago at the Surf Industry Conference in Cabo, I facilitated a panel of people from the skateboard industry because skate was going off and the surf guys thought skate was going to have them for lunch or something. Then skate sales plummeted though, happily, they are - [Look! New Brands. That’s Great! Or These People Are Crazy. Or Both.](https://jeffharbaugh.com/look-new-brands-that’s-great-or-these-people-are-crazy-or-both/) - Probably both. It’s not like brands haven’t been coming and going for years beyond count in skateboarding. Historically, there have been two categories of new brands. The first was the truly new company started by some skaters who wanted in on a burgeoning industry that just happened to be something they loved. The second were the new brands - [The Dilemma of Being “Core;” Identifying and Managing the Conflict.](https://jeffharbaugh.com/the-dilemma-of-being-core-identifying-and-managing-the-conflict/) - A few years ago I wrote a column called “Are there Any Core Snowboard Shops Left?” It generated a good discussion, though I got burned at the stake by quite a few people. Happily, I was wearing my asbestos underwear. The question, however, is still valid because of some of the problems core shops are having and - [New Stuff to Do More; New Strategies are Critical as the Snowboard Industry Evolution Continues](https://jeffharbaugh.com/new-stuff-to-do-more-new-strategies-are-critical-as-the-snowboard-industry-evolution-continues/) - I remember when this was a simple business. Or at least I thought it was a simple business. You had a pro team, ran some ads, built relationships with core shops, sold C.O.D. or on 30-day terms, and were thrilled if you could get enough product to fill orders. With supply shortages, the fact that quality wasn’t - [Conversations with a Skate Retailer; A (Pretty Much) True Story](https://jeffharbaugh.com/conversations-with-a-skate-retailer-a-pretty-much-true-story/) - Some month ago, I got a call from an actual skate retailer. “It said at the end of the article that you work with companies in transition,” he asked almost as a question. “It’s true,” I told him. “Okay,” he said. “Help me with mine.” The story unfolded like this. He’d been in business for a bunch - [Doing Marketing; What, How and Why?](https://jeffharbaugh.com/doing-marketing-what-how-and-why/) - At the Skateboard Industry Conference earlier this year and in these hallowed pages, I’ve argued: 1. That advertising and promotional tactics like running ads and hiring teams pass for marketing in this industry but aren’t. 2. That marketing (maybe better called market research) is the process of finding out who your customer is and - [The Impact of Consolidation; Wasn’t That Over Years Ago?](https://jeffharbaugh.com/the-impact-of-consolidation-wasnt-that-over-years-ago/) - Yes. And no. The snowboard industry consolidation that started around 1995 or 96 could probably have better been called extermination. Literally hundreds of brands went away either because their founders got tired of losing money or because the Japanese stopped paying cash in advance for snowboards. Though there were exceptions, these brands didn’t get subsumed under the multi-brand umbrella - [Action Sports; Are We Still in That Business?](https://jeffharbaugh.com/action-sports-are-we-still-in-that-business/) - Seems a silly question I suppose. Action sports are what we do. It’s what we’ve always done. It’s what we love. Our trade shows are more fun than anybody else’s. We get to take vacations and call them business expenses or, even better, product testing. Uh, not that I’ve ever done that, Mr. Tax Man, sir. But I’ve heard about it. I'm - [Margins- Percentages and Dollars; Where to Focus?](https://jeffharbaugh.com/margins-percentages-and-dollars-where-to-focus/) - I always looked first at gross margin percentages when I was running a business. Before revenue, before anything. Because those percentages were what determined how many dollars I had to pay all the salaries and operating expenses. Higher had to be better. It just had to be. Except that I was never dealing with major price differences in - [What’s Happening to Core Retailers? Things We Won’t Argue About- and What They Mean](https://jeffharbaugh.com/whats-happening-to-core-retailers-things-we-wont-argue-about-and-what-they-mean/) - Not long ago, I finally came up with a definition of core retailer that I liked. I was really proud of it because it had taken me about 13 years to settle on one I thought was accurate and useful. Now, not all that long after I accomplished that feat, I'm not sure it really matters. I’ve - [What Forward Thinking Retailers are Doing: Trends That Probably Won't Surprise Anybody](https://jeffharbaugh.com/what-forward-thinking-retailers-are-doing-trends-that-probably-wont-surprise-anybody/) - The issues that smaller retailers are facing haven’t changed much. There are too many retail stores, pressure from chains, brand stores and big boxes, a tough financial model, the challenge of keeping margins up, lack of product differentiation, increasing costs, over distribution. That’s a cheery environment, isn’t it? You’ve got a choice. You can bemoan the unfairness - [The Relationship Between Marketing and Business Risk; Do One and Reduce the Other](https://jeffharbaugh.com/the-relationship-between-marketing-and-business-risk-do-one-and-reduce-the-other/) - Have you ever noticed how often the group of people who create ads, run promotions, and manage sponsorships are called the marketing department? That’s always struck me as kind of odd. I think marketing is the process of figuring out who your customer is, or can be, and why they buy your product. Advertising and promotion are the - [Can We All Please Just Calm Down? A Business Perspective on Blanks](https://jeffharbaugh.com/can-we-all-please-just-calm-down-a-business-perspective-on-blanks-2/) - I can’t believe I’m doing this. Oh lord, how many people am I going to piss off this time? I mean, I could just lay low and let the slings and arrows fly back and forth but no, I just don’t have the intestinal fortitude to keep my mouth shut. Instead, there’s this almost pathological need to try - [American Skiing Sells Steamboat; Leverage and Seasonality- a Tough Combination](https://jeffharbaugh.com/american-skiing-sells-steamboat-leverage-and-seasonality-a-tough-combination/) - How many of you were with me in nineteen ninety whatever at the Transworld Snowboarding Industry Conference when then American Skiing Company (ASC) Chairman Les Otten stood up and thanked the snowboard industry for saving the ski resorts? Apparently we didn’t do enough- at least not for ASC. Its last ten years have been largely a process - [Subprimes, Teen Spending and the Economy; Yup, It’s a U.S. Recession. Can’t Europe Just Ignore It?](https://jeffharbaugh.com/subprimes-teen-spending-and-the-economy-yup-its-a-u-s-recession-cant-europe-just-ignore-it/) - Daniel is my favorite economic indicator. He and his guys install wood floors. To get him to do some work at our house last summer, we had to book him two months in advance. When I called him to do another room not long ago he said, “How about next Tuesday?” He told me people were becoming more cautious - [A Little Random Perspective on the Financial/Market/Credit crisis](https://jeffharbaugh.com/a-little-random-perspective-on-the-financialmarketcredit-crisis/) - Once upon a time, way back in 2003, an investment bank could only have leverage of up to twelve to one. In 2004, the Security and Exchange Commission gave five investment banks, and only five, the ability to leverage up to 30 or 40 times or so. Guess which five they were? I almost don’t want to bother - [Blowback From the 4th Quarter; The SIMA Study and Snowboard Retailers](https://jeffharbaugh.com/blowback-from-the-4th-quarter-the-sima-study-and-snowboard-retailers/) - I received The 2008 SIMA Retail Distribution Study (highlights only) about the same time I got yet another phone call from another snowboard focused, core retailer that had been around a long time and was in trouble. I hate those calls because these are shops that I would like to see do well. My little accidental, - [Gross Margin Return on Inventory Investment A Tool for Our Times](https://jeffharbaugh.com/gross-margin-return-on-inventory-investment-a-tool-for-our-times/) - Since last fall, as our new economic reality has evolved, I’ve had a few things to say about what to do. They’ve included building your balance sheet, controlling your inventory and other expenses, focusing on the gross profit line, looking at gross margin dollars as well as percentages, and making good use of your management accounting - [The New Management Environment- A Few Ideas](https://jeffharbaugh.com/the-new-management-environment-a-few-ideas/) - In 1995 I wrote a Market Watch column called “Getting in Deep Trouble.” For those of you who might have accidentally misplaced your copies it talked, as the snowboard industry was starting its (first) consolidation, about what led companies to face survival issues and how they could save themselves. I started with the following: “All businesses - [The Post Recession Role of Company Stores](https://jeffharbaugh.com/the-post-recession-role-of-company-stores/) - When a brand said, “We’re just going to open a few flag ship stores to build the brand image and collect some good consumer information,” I was okay with that. Made sense. When it said, “We’re just going to open a few outlet stores to keep stuff that didn’t sell well out of the wrong - [Quiksilver’s Quarter and Nine Months Ended July 31, 2009](https://jeffharbaugh.com/quiksilvers-quarter-and-nine-months-ended-july-31-2009/) - I’ve read the press release and listened to the conference call, and here’s what I found out. Quik’s total revenue for the quarter fell 11.2% to $501.4 million from $569.9 million for the same quarter the previous year. Their gross profit margin fell from 50.4% to 46.7%. Selling, general and administrative expense was down 9.1% to $211.8 - [Nike’s 8/31/09 Quarter, Their Impact on the Industry and Quips on Conference Calls](https://jeffharbaugh.com/nikes-83109-quarter-their-impact-on-the-industry-and-quips-on-conference-calls/) - Nike put out a press release on its quarterly earnings two days ago and held a conference call on their results yesterday. This has all happened before the actual 10Q with all the detailed information and footnotes is available. So on the one hand, I’d like to be timely and have this done before everybody loses interest, - [Inventory Risk and Inventory Management; Our Own Version of Musical Chairs?](https://jeffharbaugh.com/inventory-risk-and-inventory-management-our-own-version-of-musical-chairs/) - Janet Freeman, owner of the small but well established women’s snowboard apparel brand Betty Rides, has a problem. On October 17th, she told me, “It's weird but Betty Rides has ALREADY been getting lots of re-orders for snowboard jackets and pants. We cut to order, and are sold out on most things.” Naturally, I was sympathetic to - [Opportunities for new Labels and Small Brands. What, Exactly, Should You Do?](https://jeffharbaugh.com/opportunities-for-new-labels-and-small-brands-what-exactly-should-you-do/) - I’ve been chanting for the last few months, and maybe longer, that our current economic environment represents a great opportunity for new and smaller brands. At an ASR seminar in September, somebody actually, finally, asked me, “What do you mean by that exactly?” My answer was that if you were a specialty retailer, and were still - [Alternative Camber; An Idea Who's Time has Come- Again](https://jeffharbaugh.com/alternative-camber-an-idea-whos-time-has-come-again/) - A couple of weeks ago, I was paging through Transworld Snowboarding’s Gear Guide, and I came upon the page on alternative camber. I read it with interest to try and keep with the latest technological trends, but paused when I saw the illustration of the cambered medley snowboard. Something about the cross section of the board, - [Hot Topic: A Competitive Strategy We Should Be Thinking About](https://jeffharbaugh.com/hot-topic-a-competitive-strategy-we-should-be-thinking-about/) - Hot Topic has reported their results for the quarter ended October 31 and their sales for the month of November. Their sales were down some for the quarter and more in November, but they continued to make money in the quarter and their balance is very strong. But I don’t want to crunch their numbers. I do - [Aeropostale; the Power of Good Systems and the Right Market Position](https://jeffharbaugh.com/aeropostale-the-power-of-good-systems-and-the-right-market-position/) - For the quarter ended October 31, Aeropostale reported sales up almost 18% to $568 million. For nine months, they rose almost 20% to $1.43 billion. Gross profit margin in the quarter rose from 36% in the same quarter last year to 39.3%. For nine months, it was up from 34.4% to 37.5%. Selling, general and - [My Office Chair, Customer Service, and Expense Control](https://jeffharbaugh.com/my-office-chair-customer-service-and-expense-control/) - It’s a nice leather chair. I’ve had it less than two years. So I wasn’t happy when it started tilting side to side as much as it rocked from front to back. It felt like it was going to leave me on the floor any day and, besides, it was practically making me seasick. The nice people - [In Case You Have Trouble Sleeping: A Report from the Bureau of Labor Statistics](https://jeffharbaugh.com/in-case-you-have-trouble-sleeping-a-report-from-the-bureau-of-labor-statistics/) - You can go here http://www.bls.gov/news.release/ecopro.nr0.htm to see the report. If it does help you sleep, it will probably give you nightmares. You can see in the first line of the report, released last Thursday, that they expect total employment "...to increase by 15.3 million, or 10.1 percent, during the 2008-18 period..." Now, that may sound encouraging, but - [The BRA/IASC Roundtable at ASR](https://jeffharbaugh.com/the-braiasc-roundtable-at-asr/) - As they do every ASR, IASC and BRA hosted a round table meeting by invitation only to discuss issues of mutual interest and, as usual, I attended. The meeting was well attended and the exchange lively. The first issue on the table was Manufacturers’ Suggested Retail Pricing (MSRP) and Minimum Advertised Pricing (MAP). I’ll assume you know - [An Interesting Advertising Observation; What Does it Mean?](https://jeffharbaugh.com/an-interesting-advertising-observation-what-does-it-mean/) - I was recently paging through a couple of Transworld consumer mags (Surf and Skate I think) and something caught my attention. I don’t know what made me notice it, but I suddenly realized there was not one non-endemic advertisement in either mag. Okay, maybe I missed one, but there was no Ford Trucks, Mountain Dew, AT&T or - [Notes from the Skateboard Industry Conference](https://jeffharbaugh.com/notes-from-the-skateboard-industry-conference/) - It was, by any measure, a successful conference and IASC did a great job putting it on. Attendance, at around 95, was up over last year, which was also up over the first year of the conference the previous year. The attendees were the senior people from the right companies. The food continues to improve (breakfast still needs - [Volcom 1st Quarter Ended March 31- Numbers, Macy, Inventory Management](https://jeffharbaugh.com/volcoms-1st-quarter-ended-march-31-numbers-macy-inventory-management/) - Volcom filed their 10Q on May 10th. After I listened to the conference call and they said how well the brand was doing in Macy's, I was determined to get into a Macy's and see for myself before writing this. I’ve done that now, so we’ll take a look at the numbers then move on to what - [What's Going on in Greece and Why You Might Care](https://jeffharbaugh.com/whats-going-on-in-greece-and-why-you-might-care/) - The concept of the European Community and a common currency worked okay (though with massive misallocation of capital) as long as long as there was lots of growth and lots of money and lots of subsidies for poorer countries and low interest rates. For a long time, what you could earn on a German bond wasn’t - [Billabong Acquiring West 49](https://jeffharbaugh.com/billabong-acquiring-west-49/) - Or Maybe Zumiez is Going to Buy Them Oh, and Billabong Bought RVCA Okay, Zumiez is Out of the Picture Anyway, This is All Really Interesting- and Related As you know, Billabong made an offer on June 30 to acquire the Canadian action sports retailer West 49. Only July 9th, Zumiez said - [Jeff's First Book Report (at least since the 10th grade)](https://jeffharbaugh.com/jeffs-first-book-report-at-least-since-the-10th-grade/) - Somewhere in the area of 75 AD the silver content of the Roman Denarius was about 100%. It was solid silver. Somewhere before 300 AD that content had fallen to around 10% or less. The value of the currency fell and the empire’s debt rose as Rome fell apart. I thought that was an interesting fact, so I - [How is Our Customers Buying Power? A Chart That Should Make You Think](https://jeffharbaugh.com/hows-our-customers-buying-power-a-chart-that-should-make-you-think/) - I stole the chart below from Clusterstock (It’s not stealing if you confess, is it?) and wanted to share it with you. Look at the unemployment rate for our prime customers; the young workers aged 16-24. It’s close to 20% as of May. Now, if you’re in skate you go younger than 16 and if you’re in apparel, - [A Medium to Long Term Perspective on the Job Market](https://jeffharbaugh.com/a-medium-to-long-term-perspective-on-the-job-market/) - The chart below is something you need to see to have some medium to long term perspective on the economy and the job market. It comes under the heading of something you won't see in the mainstream media. I have finally been doing this long enough to know that people don't always like it when - [Biting to the Core: The Future of Mom-and-Pops, the Majors, and Brand Labels in the Evolving Retail Landscape](https://jeffharbaugh.com/biting-to-the-core-the-future-of-mom-and-pops-the-majors-and-brand-labels-in-the-evolving-retail-landscape/) - In a rapid and rather remarkable convergence of four key trends, a lot is changing for core retailers and for retail in general. The accelerating push of large brands into retail, their reduced dependence on core shops, the decline in the number of true core shops, and the financial/management model required in our new economic - [SIA Article on the Rising Costs of Chinese Production](https://jeffharbaugh.com/sia-article-on-the-rising-costs-of-chinese-production/) - About a week ago, SIA published a really good article on why production costs in China are rising. If you haven't read it you can, and should, here: http://www.snowsports.org/SuppliersServiceProviders/SIANewsletter/NewsletterDetail/Contentid/1272/#top. The article is pretty tactical in nature, and I thought a little bit of the longer term social and political perspective might be interesting to you. - [Never Summer’s and Mervin Manufacturing's Little Patent Brouhaha](https://jeffharbaugh.com/never-summers-and-mervin-manufacturings-little-patent-brouhaha/) - I guess I should start by admitting that I’m not an expert on snowboard technology, and I don’t have a strong opinion (any opinion, actually) on which kind of camber is best and I don't know who made which claim first. I also haven’t read, and don’t intend to read, the patents. I figure I - [“Independent” Retailers; Are They Still Independent? And What if They Aren’t?](https://jeffharbaugh.com/independent-retailers-are-they-still-independent-and-what-if-they-arent/) - Sometimes I do my best work with a glass of wine. The secret is to never post what you’ve written until the next day, after you’ve read it again. I put “independent” in quotes (there, I’ve done it twice) because as I think about retailers and their relationships with brands I kind of wonder what independent means. - [A True Christmas Retail Tale](https://jeffharbaugh.com/a-true-christmas-retail-tale/) - My youngest son and I went out to get our Christmas a week or so ago. I headed towards our usual lot, expecting to pay something like $60 for a tree when we spotted a sign that read, “Christmas Trees: $29.95.” Never one to turn down a deal, I followed the signs to the lot where, indeed, - [Gross Profit Margins; How to Think About Them for Brands with a Big Retail Presence](https://jeffharbaugh.com/gross-profit-margins-how-to-think-about-them-for-brands-with-a-big-retail-presence/) - A friend of mine who wants to remain anonymous (I get quite a few of those) sent me an email the other day and had an interesting point to make about gross margin for brands who owned retail stores. When a brand opens retail stores they do it at least in part because they expect - [Surf Expo; The Report of the Death of Trade Shows is Greatly Exaggerated](https://jeffharbaugh.com/surf-expo-the-report-of-the-death-of-trade-shows-is-greatly-exaggerated/) - Apparently, if you get a whole bunch of retailers who need to buy stuff together with the brands they want to buy from there’s still every reason to have a big old trade show. Maybe, in fact, the bigger the better. The more brands and retailers, assuming they are the right brands and retailers, the more - [Another New Retail Concept. Just What We Need.](https://jeffharbaugh.com/another-new-retail-concept-just-what-we-need/) - Back in early December, I bookmarked an article I wanted to write about then promptly forgot about it with the holidays and other intriguing stuff going on. It was a short article in Stores News about Sports Authority starting to open stores called S. A. Elite. Like the story said (read it here), Sports Authority has - [Inventory Management and Customer Conversion/Retention in the Snow Sliding Business](https://jeffharbaugh.com/inventory-management-and-customer-conversionretention-in-the-snow-sliding-business/) - SIA was kind enough to feed me a nice breakfast this (Friday) morning before the show opened. While I ate and drank coffee, people from the various industry organizations that are and have been involved in the industry’s programs to convert first time snow sliders talked to us about what they’ve accomplished and what more needs - [Skullcandy Going Public; What We Can Learn From Their SEC Filing](https://jeffharbaugh.com/skullcandy-going-public-what-we-can-learn-from-their-sec-filing/) - It’s always interesting when a company in the industry decides to go public. They’ve got to drop their drawers and provide you, in their S1 filing, with information you could only speculate about previously. If you want to see it, the whole thing is here. As of last week, Skullcandy’s drawers are well and truly dropped. Since I - [Thoughts on the SIA Show in Denver- It Doesn’t Get Any Better Than This](https://jeffharbaugh.com/thoughts-on-the-sia-show-in-denver-it-doesnt-get-any-better-than-this/) - Before my friends at SIA get too cocky over the title, they should know I’m referring to our industry’s current business environment as well as the show. Granted, I was a bit of a slow convert to the move from Vegas to Denver, and I still miss playing blackjack with friends, but overall I’m glad they - [Skechers- Some Insights from Their 10K Annual Report](https://jeffharbaugh.com/skechers-some-insights-from-their-10k-annual-report/) - Look, I know Skechers isn’t particularly cool and we don’t pay that much attention it. But it’s another $2 billion company with a strong balance sheet that’s in most segments of the shoe business and, whether we like it or not, competes with more action sport aligned brands. This isn’t a full analysis. I just reviewed - [The Lesson to be Learned from SIA’s Sales Report](https://jeffharbaugh.com/the-lesson-to-be-learned-from-sias-sales-report/) - SIA recently reported that the snow sports market in February exceeded $3 billion. You probably get the same emails I get, but if not, you can see the announcement and analysis here. SIA expects the industry to set a record by the time the season ends. Through February, sales are up 13% in dollars and 8% in units. In - [The Skateboard Distribution Model- It Never Was Broken](https://jeffharbaugh.com/the-skateboard-distribution-model-it-never-was-broken/) - I just found out I’d volunteered to facilitate the panel on distribution at next week’s IASC and BRA sponsored Skateboard Industry Summit. I had to spend some time getting my thoughts about distribution in order, and I know of no better way than to write them down. Distribution has always been a bit of a contentious - [Notes from the Skateboard Industry Conference and Hotel Lobby Bowling Event](https://jeffharbaugh.com/notes-from-the-skateboard-industry-conference-and-hotel-lobby-bowling-event/) - IASC and BRA did a great job putting on the annual skateboard industry conference this week at the Doubletree in Orange, CA. The attendance was good, the subjects all worthy of attention, and the beer sponsor much better than last year. Credit also has to go to Steve Van Doren and Vans for providing some food, some - [PPR Buys Volcom, Probably](https://jeffharbaugh.com/ppr-buys-volcom-probably/) - You know, I should have seen this coming and been sitting on 10,000 shares. But no such luck and anyway, I don’t own shares in companies I write about. Still, the deal’s not a complete surprise. Vans, DC, Reef, Sector 9 and Hurley are a partial list of industry companies that have been acquired by larger companies that - [There Is No Action Sports Industry. Or Maybe It’s the Same as its Always Been](https://jeffharbaugh.com/there-is-no-action-sports-industry-or-maybe-its-the-same-as-its-always-been/) - Sometimes I just can’t help myself. Many years ago, I wrote an article called “Are There Any Core Shops Left?” My good friend and editor at the time Sean O’Brien thought enough of it to put it on the Transworld web site for discussion. Without telling me. In hindsight, his instincts were good, but I was the slightest bit - [The 2010 SIMA Retail Distribution Study](https://jeffharbaugh.com/the-2010-sima-retail-distribution-study/) - The first thing to say is thanks to SIMA for making this study happen and to Leisure Trends Group for doing the research. We don’t get access to near enough industry and market data. As I’m not a member of SIMA, I don’t have access to the complete study. I’m working with the “Media Highlights” package that - [Popup Playgrounds; An Intriguing Marketing Idea](https://jeffharbaugh.com/popup-playgrounds-an-intriguing-marketing-idea/) - It’s not like I look to the New York Times for all my good industry advertising and promotion ideas. Still, once in a while, they come up with something that gets me thinking. Their “Presto Instant Playground” article is one such idea. You may have to register to read it, but it won’t cost you anything. “During a - [Skullcandy has a Strong Quarter](https://jeffharbaugh.com/skullcandy-has-a-strong-quarter/) - Skull’s sales for the quarter ended June 30 rose 46.4% to $52.4 million over the same quarter last year. Net income more than doubled from $2.1 to $4.3 million. This was helped by an income tax rate that fell from 56.6% to 41.6%. Gross margin essentially stayed the same, falling just one tenth of a percent to 51.1%. You - [Cyberboutiques. I Don’t Know if this is a Great Idea or a Waste of Bandwidth.](https://jeffharbaugh.com/cyberboutiques-i-dont-know-if-this-is-a-great-idea-or-a-waste-of-bandwidth/) - My wife sent me this article from the New York Time’s Fashion and Style section. For some reason, I don’t read that section regularly. Not enough graphs, charts, and numbers to get me excited I guess. I played around a bit with the application at the web site. It was a bit jerky and slow, but I could - [Lessons From Interbike: Focus In or Focus Out](https://jeffharbaugh.com/lessons-from-interbike-focus-in-or-focus-out/) - I had occasion to be in Vegas on business while Interbike was going on. The company I was working with was exhibiting there, so I took the day to wander around the show. I’d never been to Interbike before. There was something different about this trade show from all the others I’d ever been to. It took me a - [Get Out of the Office! It’s Amazing What You Can Learn](https://jeffharbaugh.com/get-out-of-the-office-its-amazing-what-you-can-learn/) - Yesterday, I had occasion to meet up with Jaimeson Keegan, who’s the President/Floor Sweeper (according to his business card) of SUPERHEROES Management. It offers athlete and entertainment talent representation combined with social media strategies and some other stuff that I thought was a very sensible aggregation. Anyway, we’re both up here in the Northwest and just thought - [Peak Resort’s Initial Public Offering. What’s Going On?](https://jeffharbaugh.com/peak-resorts-initial-public-offering-whats-going-on/) - Back on April 18th, Peak Resorts filed an S-1 with the Securities and Exchange Commission (SEC) to take the company public. There have been four amendments since then, with the latest filed September 19th. Here’s the link to that most current version of the S-1. The company is not yet public but, based on that filing, is still - [September’s Leap in Outdoor Sales](https://jeffharbaugh.com/septembers-leap-in-outdoor-sales/) - The Leisure Trends Group does a lot of good work. On October 20th, they sent out an email you may have seen announcing record September outdoor retail sales of $462 million up 17% over a year ago. Leisure Trends analyst Scott Jaeger said it was the strongest September since they started keeping records in 1998. Great news - [WeSC’s Annual Report; Numbers and Strategy](https://jeffharbaugh.com/wescs-annual-report-numbers-and-strategy/) - I didn't spot WeSC's annual report until Shop-Eat-Surf did a story on it. Now, I’ve been through it. The Swedish approach is an interesting combination of a U.S. style annual report and our 10K SEC filings. I’ll start with a review of the numbers, but more interesting (I hope) will be a discussion of WeSC’s strategy and market - [What Will You Do When Your Greek Receivables are in Devalued Drachmas?](https://jeffharbaugh.com/what-will-you-do-when-your-greek-receivables-are-in-devalued-drachmas/) - There are lots of public company quarterly reports I should be writing about, but I am going to step off that track and think, for a bit, the unthinkable. Or at least it was the unthinkable. But at this point the Eurozone seems to be moving towards two choices, either of which has huge implications for - [Heinz's New Ketchup; New Product Introductions and Social Media](https://jeffharbaugh.com/heinz-new-ketchup-new-product-introductions-and-social-media/) - I came across this a few weeks ago (actually, my wife sent it to me and if I don’t give her credit, I’ll hear about it), but have been busy reading quarterly filings. Heinz, it seems, has introduced what it considers to be upmarket ketchup blended with balsamic vinegar. Read the article here. No, no, no, there’s no - [Do Retailers Really Need to Carry All That Inventory?](https://jeffharbaugh.com/do-retailers-really-need-to-carry-all-that-inventory/) - I suppose that seems like a stupid question. But having just been through another Christmas shopping (and return) season, I’m not so sure it is. I’ve shopped on line. I’ve been to too many malls too often (I confess it- I hate shopping). In those malls I saw way too much product on sale at way larger discounts than - [Follow-up on my Last Article; the Nau Example](https://jeffharbaugh.com/follow-up-on-my-last-article-the-nau-example/) - My last article, “Do Retailers Really Need to Carry All That Inventory?” garnered quite a response. One of those responses was a link to an article about a brand called Nau. Their web site is here. The link to the article is here. The article was written back in 2007 and the brand is still around and, judging - [The Joys of Consolidation; Managing the Transition from Growth to Maturity](https://jeffharbaugh.com/the-joys-of-consolidation-managing-the-transition-from-growth-to-maturity/) - It happened to skate boards and surf boards. Now, it’s the snowboarding industry’s turn. The transition from a fast growing, hot trend to a mature industry is about more than consolidation to fewer players. It means lower margins, slower growth for many companies and aggressive competition increasingly based on price and service, not to mention savvier consumers - [Who Are Your Customers? And Why Are They Buying From You?](https://jeffharbaugh.com/who-are-your-customers-and-why-are-they-buying-from-you/) - As a snowboard retailer, you have a position in your market. You own it, and it’s yours to loose. The best way to loose it is to forget who your customers are and what they want. The other day I was in one of these warehouse stores. There was a snowboard with bindings for, I think, $299.00. The board - [Foreign Exchange Management; What’s All This Brouhaha?](https://jeffharbaugh.com/foreign-exchange-management-whats-all-this-brouhaha/) - Actually, there’s nothing to it. The differential in rates of inflation between the economies of two countries equals the percentage change in the exchange rate over the same period. This is known as the Purchasing Power Parity theorem. There. That should be clear. Of course, government intervention in the markets can also affect exchange rates and everybody knows that - [Where Have All the Snowboards Gone? The Apparent Imbalance Between Production and Sales](https://jeffharbaugh.com/where-have-all-the-snowboards-gone-the-apparent-imbalance-between-production-and-sales/) - I seem to remember from my first economics class that if supply goes way up and demand doesn’t keep pace, prices can be, well, negatively impacted. When I look back at the 1994-95 season, I am disturbed because it appears that there were more boards produced than were sold to retailers; maybe a lot more. Below, - [SIA Member Services; Run Your Business Better: No Charge](https://jeffharbaugh.com/sia-member-services-run-your-business-better-no-charge/) - I think the first time I heard about SIA it was when somebody asked me to write a check for membership. “What are we going to get out of this membership?” I asked. “We have to be a member to go to the show,” was the less than enthusiastic endorsement. So I signed the check. Turns out there’s - [Big Air; Initial Public Offerings in the US](https://jeffharbaugh.com/888/) - Open on the table next to me I have the preliminary and actual prospectus for, respectively, Morrow and Ride Snowboards initial public offerings. As of December 13th, 1995, my broker assures me, Morrow is not public yet. Ride’s prospectus is dated May 6, 1994 and those of you who bought their stock at the time of - [Hard Choice Time; Strategies for Success in the Snowboard Industry](https://jeffharbaugh.com/hard-choice-time-strategies-for-success-in-the-snowboard-industry/) - It all kind of came together for me at the industry conference at Banff, though I couldn’t say if it was on the lift, in the spa or at the bar. Probably at the bar. The time is over when a small or medium sized independent player in this industry can just focus on getting from one - [SIA’s Numbers Through January: The Silver Lining](https://jeffharbaugh.com/sias-numbers-through-january-the-silver-lining/) - Like me, you probably got the SIA press release this morning with the snow sport industry’s numbers through January. And, if you’re like me, you know that SIA always cherry picks the good news and leads with those numbers, so you immediately clicked through to the Leisure Trends web site where, as an SIA member, you - [A Minor Mind Dump](https://jeffharbaugh.com/a-minor-mind-dump/) - I’ve had a few ideas lately and come across some information I wanted to share. None of them seemed worthy of its own article, so I thought I’d just spew them out as they sprang into my mind. I have no idea how this is going to turn out. First, a housekeeping issue. I know that Quiksilver, Zumiez - [Trying to Think About the Junction of Retail, Brands and the Internet.](https://jeffharbaugh.com/trying-to-think-about-the-junction-of-retail-brands-and-the-internet/) - The more I think about it, the less I feel I know for sure. I know the internet and brick and mortar are changing each other, that brands are becoming retailers and retailers brands, that easy information and product availability is making most products commodities at some level, that brands are really pushing product extensions, and - [The IASC Skate Industry Conference](https://jeffharbaugh.com/the-iasc-skate-industry-conference/) - The International Association of Skateboard Company’s conference week was, as usual, well attended by the people you want to see there. That’s a lot of what makes it worth attending for me. I enjoyed the Hall of Fame awards. It was great to see and hear some of these people I’ve only read about. I left before the bitter - [Learning from JC Penney: Their Transparent Pricing Debacle (So Far)](https://jeffharbaugh.com/learning-from-jc-penney-their-transparent-pricing-debacle-so-far/) - As you are probably aware JC Penney, struggling to find a sustainable market position, hired a high powered Apple executive as CEO. He got rid of all their sales and started offering everyday low prices in an attempt to regain some customer attention and loyalty. Based on their recent earnings release, it’s not working, though I hope - [Retail Evolution and Industry Conferences: What’s the Connection?](https://jeffharbaugh.com/retail-evolution-and-industry-conferences-whats-the-connection/) - Maybe ten days ago, I wrote this article that talked about JC Penney’s new pricing policy and strategy and referred you to an article on that strategy and why it might not work. I thought that article had some implications for our industry and I discussed them. Now, my ultra-sophisticated research department (thank you dear) has - [Zumiez Releases More Information on Blue Tomato](https://jeffharbaugh.com/zumiez-releases-more-information-on-blue-tomato/) - Life is so not fair. Here I am on vacation, vowing to just get the Zumiez analysis done. I do that, I send it out and now I can relax, right? Nah. Literally 20 minutes later, along comes an 8K/A from Zumiez filed with the SEC giving us the Blue Tomato financial statements. Let’s try and keep this short. First, - [The Possible Rip Curl Deal](https://jeffharbaugh.com/the-possible-rip-curl-deal/) - A couple of readers were thoughtful enough to send me articles on the possible sale of Rip Curl. You can read them here and here. What’s intriguing from my perspective is that the offers came along at the same time as the conditional TPG offer for Billabong. As you know, that’s in due diligence right now, though there’s - [Miscellaneous Stuff; Not Your Typical Market Watch](https://jeffharbaugh.com/miscellaneous-stuff-not-your-typical-market-watch/) - I read a lot of stuff. From time to time I come upon something I want to share with you. Often I hold on to it until it fits into something I’m writing. But at this point, I’ve got a few articles I’ve been saving that it’s just time to spring on you in the hope you might - [Let’s Review; Lessons for Being in the Winter Sports Business](https://jeffharbaugh.com/lets-review-lessons-for-being-in-the-winter-sports-business/) - Well, here we are in the middle of a new snow season. Among the things people are probably thinking about are: “It can’t be any worse than it was last season.” That seems statistically likely to be correct. “What am I going to do with last year’s product?” Probably something brands and retailers are both still thinking - [Some Lessons From Zara; How Fast Fashion Fits Today’s Economy](https://jeffharbaugh.com/some-lessons-from-zara-how-fast-fashion-fits-todays-economy/) - Zara has 5,900 stores in 85 countries. Only 45 are in the United States. I’ll get back to why that is. I’ve been aware of Zara for a while of course, but when my ever vigilant research department sent me this article, I decided there were some lessons we could all learn. Because I don’t want to rehash - [Paul Naude Explores Billabong Leveraged Buyout](https://jeffharbaugh.com/paul-naude-explores-billabong-leveraged-buyout/) - I suppose you have all heard that Billabong Director and President of the Americas Paul Naude has stepped aside from his duties for six weeks to try and pull together a leveraged buyout of Billabong. You can see the Billabong announcement and the conditions under which he is working here at Billabong’s investor web site. It’s the - [Another Possible Retail Future](https://jeffharbaugh.com/another-possible-retail-future/) - We’ve all been watching for a while now as online and brick and mortar retail have collided and converged. We know it’s here to stay and that there’s a lot of evolving left to do. None of us know what the end product will look like (though maybe it’s better to acknowledge that there is no end - [Winter Resorts Targeting Baby Boomers: I’m a Little Worried.](https://jeffharbaugh.com/winter-resorts-targeting-baby-boomers-im-a-little-worried/) - Well, you know me. I’m always a little worried about something. But hopefully, the fact that I have a tendency to bring up issues people wish would just go away is part of the reason you read me. We’ve all known that winter resorts tend to be dependent on the baby boomers for a big chunk of - [My Wife’s Cosmetics and Skateboarding](https://jeffharbaugh.com/my-wifes-cosmetics-and-skateboarding/) - My wife uses Bobbi Brown cosmetics and I doubt most of you really care. Like me (and I’m guessing all the guys who read this), until right now, you’ve probably never heard of Bobbi Brown. Maybe some of my women readers know it. I care that my wife looks great but not what brand she chooses. - [More on Winter Resorts Targeting Baby Boomers: I’m Not the Only One Who’s Worried](https://jeffharbaugh.com/more-on-winter-resorts-targeting-baby-boomers-im-not-the-only-one-whos-worried/) - You may recall (or not) that about a month ago I wrote an article expressing some concern that winter resorts were targeting baby boomers. My point was that dependence on high income baby boomers couldn’t be an exclusive, long term strategy because, inconveniently, those people are going to get older sooner and stop snow sliding. When that - [What’s Going on With Rip Curl?](https://jeffharbaugh.com/whats-going-on-with-rip-curl/) - I don’t generally have a way to get good information on Rip Curl, but somebody sent me the interview below with Rip Curl co-founder and owner Brian Singer. Why don’t you read it, then I’ve got a comment for you. Rip Curl co-founder and owner Brian Singer speaks exclusively to the Surf Coast Times about Rip - [Aunt Jenny’s Egg Beater, Hoodies, and Water Heaters; The Evolution of Manufacturing, the Future of Fast Fashion and the Impact of the Internet](https://jeffharbaugh.com/aunt-jennys-egg-beater-hoodies-and-water-heaters-the-evolution-of-manufacturing-the-future-of-fast-fashion-and-the-impact-of-the-internet/) - My Aunt Jenny died maybe 12 years ago at the age of like 97. I helped clean out her house and one of the things I saved was her egg beater. It was made by the Dazey Manufacturing Company in St. Louis. I don’t know if it’s 60 or 90 years old. The company is out of business. I - [Some Interesting Numbers](https://jeffharbaugh.com/some-interesting-numbers-2/) - I was lucky enough last week to be at IASC’s Skateboard Industry Conference. I was sorry to have to leave early, but among the things I enjoyed doing while there was making a presentation. As part of that presentation I showed some numbers provided by Snowsports Industries of America and I wanted to share them with you. Here - [K-Swiss Acquisition of OTZ Shoes: There’s More Here than Meets the Eye](https://jeffharbaugh.com/k-swiss-acquisition-of-otz-shoes-theres-more-here-than-meets-the-eye/) - When I first read about this deal, I thought “Good for the team at OTZ. I hope K-Swiss does well by them” and kind of let it go. Then at a reader’s urging, and through a few clicks on the internet, I decided there might be something to write about here. I don’t have any information that isn’t - [Whether to Laugh or Cry; Tommy Hilfiger Debuts Surf Line](https://jeffharbaugh.com/whether-to-laugh-or-cry-tommy-hilfiger-debuts-surf-line/) - It’s Friday evening, my wife is out of town, and a friend sent me this article from May 20 announcing the debut referenced in the title. I’ve had a glass of wine and think I’m going to break a rule and have another one as I write this. Or more. God knows what I’ll end up saying. If you - [Tilly’s Quarter; Income Down on Higher Sales.](https://jeffharbaugh.com/tillys-quarter-income-down-on-higher-sales/) - For the quarter ended May 4, Tilly’s sales were $109 million. In last year’s quarter ending April 28, 2012, sales were $96.5 million. That 13% sales growth. But further down the income statement, we find that income before taxes fell 35% from $5.9 to $2.3 million. What went on? NOTE: Net income fell even more, from $5.9 to $2.3 - [The Dilemma of Growth in Action Sports](https://jeffharbaugh.com/the-dilemma-of-growth-in-action-sports/) - Help me out here. Name me one company that (1) has its roots in action sports, (2) has grown to have revenues greater than, say, $200 million, (3) has gone public, (4) hasn’t been acquired and, (5) is continuing to grow and prosper. In retail, I’d name Zumiez though I imagine some people won’t like that. - [A Quart of Paint](https://jeffharbaugh.com/a-quart-of-paint/) - If you’re a homeowner, you know that you can never complete your project list. All you can do is try to keep it from getting longer. At our house, outside projects are my job and in the Northwest, that means get them done in the summer. In the spirit of shortening the list, I stopped by a - [A Tale of Two Retailers](https://jeffharbaugh.com/a-tail-of-two-retailers/) - A recent trip to the East coast found me in a mid-sized, somewhat economically depressed city that’s undergoing quite a revival in its downtown core. I had the chance to walk the downtown with one of the people intimately involved in that development as he explained the vision and showed me the construction. Part of what - [Rip Curl Financial Results](https://jeffharbaugh.com/rip-curl-financial-results/) - Thanks to an alert from a reader, and a follow-up with a journalist who wrote about their results, I was able to come up with a copy of Rip Curl’s financial statements for the year ended June 30. There’s no discussion of operations or breakdown of what’s selling and where like we’d have if they were - [Lululemon Appoints Laurent Potdevin as New CEO; Founder Chip Wilson Steps Down.](https://jeffharbaugh.com/lululemon-appoints-laurent-potdevin-as-new-ceo-founder-chip-wilson-steps-down/) - Okay, so really short article. I don’t have much to say. One could say I’m speechless. Anyway, here’s the link to the press release announcing the appointment. If you want more info, here’s another link where you can find additional information and listen to this morning’s conference call. Laurent, as you know, spent a lot of years at Burton Snowboards - [Why Crocs Might Go Private](https://jeffharbaugh.com/why-crocs-might-go-private/) - I’ve been holding on to this article on Crocs for a while mostly because I just didn’t have time to do anything with it. What it says is that Crocs is looking to go private because it’s just not as cool as it was. Currently, it’s traded under the symbol CROX on the NASDAQ and - [Speaking of Brand Retail Strategies…..](https://jeffharbaugh.com/speaking-of-brand-retail-strategies/) - Shortly after I posted my article on Quiksilver’s annual results, a reader of mine sent me this brief article (thanks YKW!). Here’s another article on the same subject with a little more information (don't be confused because it has the same picture). Basically, what they say is that “Nike and Adidas recently dealt an additional blow to - [What Happens If (When?) Apparel Prices Rise?](https://jeffharbaugh.com/what-happens-if-when-apparel-prices-rise/) - We sell a lot of apparel. It’s where we, as an industry, make somewhere between a lot to most of our money. We’ve benefited over many years from apparel prices that have risen slowly if at all, and certainly more slowly than inflation. This article demonstrates that. It further tells us that apparel prices have started to rise and - [The Economy, Value of Brands, and Relationship between Brick and Mortar and Online](https://jeffharbaugh.com/the-economy-value-of-brands-and-relationship-between-brick-and-mortar-and-online/) - I went to the Snowboard Industry Conference. I had fun. I learned stuff. I talked to people. I drank beer. I made a speech. Uh, I made the speech before I drank the beer just to be clear. During that speech there were three pieces of information I want to pass on to you. It’s not that the rest of the speech - [What Does the Data on Our Target Market Say About Your Business Strategy?](https://jeffharbaugh.com/what-does-the-data-on-our-target-market-say-about-your-business-strategy/) - It was a lot of years ago when I first started reminding you not to focus just on your gross margin percentage, but your gross margin dollars as well. Then, in 2009, with the recession in full swing, I got all excited about Gross Margin Return on Inventory Investment (GMRII) after Cary Allington at Action Watch - [GoPro Goes- Public, That Is. A Look at the Final Prospectus](https://jeffharbaugh.com/gopro-goes-public-that-is-a-look-at-the-final-prospectus/) - As pretty much everybody knows, GoPro went public last Wednesday. How refreshing to see a company go public that’s actually making a product and money. GoPro sold 8.9 million shares of its class A common stock at $24 a share and raised a bit less than $200 million. $110 million will go right out the door to repay - [The Sport Chalet Acquisition and Their 10K; Some Perspective](https://jeffharbaugh.com/the-sport-chalet-acquisition-and-their-10k-some-perspective/) - Sometimes we just get lucky. I guess that’s you get lucky, and I get to review something like 650 pages of small print- the estimated total (so far) of documents filed by Sport Chalet between their 10K and the deal. I’m not going to do quite the typical review of a public company’s financials that I - [$800 Sneakers](https://jeffharbaugh.com/800-sneakers/) - My research department sent me “The Key to Selling an $800 Sneaker” from the Wall Street Journal. Personally, I’m not in the market for any of those, but I thought the article said a few interesting things. The first interesting thing is that there is such a thing as an $800 pair of sneakers. Even more - [Vestis Retail Acquisition of Sport Chalet to Move Forward](https://jeffharbaugh.com/vestis-retail-acquisition-of-sport-chalet-to-move-forward/) - As you know, Vestis Retail Group has been in the process of doing a tender offer for the shares of Sport Chalet. We learn this morning that they've acquired enough shares for the deal to go forward. Here's a link to a press release making the announcement. And here's a link to my original article explaining the - [The Great Deformation: The Corruption of Capitalism in America](https://jeffharbaugh.com/the-great-deformation-the-corruption-of-capitalism-in-america/) - If you finish The Great Deformation: The Corruption of Capitalism in America, by David Stockman, you should get a t-shirt saying you made it through. At 700 pages, it’s a journey. It tells you things about what’s gone on since the Federal Reserve was created, and right through 2012, that you won’t find anywhere in the - [As If Running a Winter Resort Wasn't Hard Enough](https://jeffharbaugh.com/as-if-running-a-winter-resort-wasnt-hard-enough/) - The top and bottom of Park City are owned by two different companies. They are in a fight over, naturally, money and it has the potential to mean the resort won't open this winter. I hope it doesn't come to that. They might find that keeping loyal customers is way easier than getting back - [U.S. Labor Market; What Shape is it Really In?](https://jeffharbaugh.com/u-s-labor-markets/) - Here's a good, short article on where we really stand. - [The Future of Malls and Impact on Industry Retailers](https://jeffharbaugh.com/the-future-of-malls-and-impact-on-industry-retailers/) - I have in front of me the pleasant task of reviewing the quarterly fillings of a bunch of our favorite retailers. But before I get to that, I thought I might point you at this article that talks about the future of malls in the U.S. It may have something to do with the evolution - [Et Tu, Nordstrom?](https://jeffharbaugh.com/et-tu-nordstrom/) - Okay, I don’t precisely feel like Julius Caesar when he was stabbed by Brutus (Hey, at least his problems were over!). But I was initially kind of surprised by what my ever vigilant research department fed me from Nordstrom’s web site. I’ve written about the tough retail environment. Among the topics I’ve highlighted are how - [Learn to Ski and Snowboard Month; Can’t We All Do Just One Thing?](https://jeffharbaugh.com/learn-to-ski-and-snowboard-month-cant-we-all-do-just-one-thing/) - Last week or so, SIA President David Ingemie sent out an appeal for support for the Learn to Ski and Snowboard Month bring a friend initiative. Check out the web site. Look under “The Challenge.” While I’d love to say something strategically brilliant about the program and give you some blinding insights into its value, - [Rents Versus Income: How Does It Impact Your Customer?](https://jeffharbaugh.com/rents-versus-income-how-does-it-impact-your-customer/) - Thought you might be interested to see what’s happened to rents compared to average incomes in recent years. Take a look at this link. Anybody with kids trying to get started on their own probably won’t be surprised by this. While this is for all employees, I’m pretty sure it’s especially impactful on our target - [Possible West Coast Port Strike or Slowdown.](https://jeffharbaugh.com/possible-west-coast-port-strike-or-slowdown/) - I trust you've all been following this. Some companies in their conference calls are acknowledging that they've brought in some inventory early in case things go south in the negotiations. I would imagine that unions feel they have the most leverage now during the holiday shopping season. Most of you have product that arrives in - [Peak Resorts IPO; If, At First, You Don’t Succeed……………](https://jeffharbaugh.com/peak-resorts-ipo-if-at-first-you-dont-succeed/) - Peak Resorts has filed to do an initial public offering again. Here’s the link to the new S1. They first filed back in April of 2011. After a serious of amendments to their S1 filing, they withdrew it due to poor market conditions for IPOs. I analyzed their situation and initial filing back in October - [Lowe’s New Customer Service Representatives and the Minimum Wage](https://jeffharbaugh.com/lowes-new-customer-service-representatives-and-the-minimum-wage/) - Lowe’s new in store service representatives won’t need bathroom breaks, vacations, or retirement account. They won’t get sick. Hell, you don’t even have to pay them a salary. And what’s even better, or maybe worse- I’m not quite sure- is that they may be able to help me find the esoteric piece of hardware I - [The Cult of Your Brand?](https://jeffharbaugh.com/the-cult-of-your-brand/) - What's a brand? These days, what makes brands strong or not strong? I've been thinking and writing about that a bit, but I don't think I've ever quite conceptualized it as well as Derek Thompson does in this article in The Atlantic. We're all talking about the importance of "community." The article describes a couple - [Altamont Acquisition of Hybrid; the Plot Thickens](https://jeffharbaugh.com/altamont-acquisition-of-hybrid-the-plot-thickens/) - When Altamont bought Fox Head in early December, I wrote this article, reporting what little we knew about the deal and speculating on what Altamont was up to strategically, if anything. Here’s, in part, what I said. “Altamont now owns or at least has investments in Brixton, Dakine, Fox Head, HUF and Mervin Manufacturing. That - [Mobile- That's What Matters](https://jeffharbaugh.com/mobile-thats-what-matters/) - Last week at Surf Expo, I made a speech where one of the things I highlighted was the importance of mobile. I said, "How mobile influences brick-and-mortar sales is more important than what you sell online." I get back home and, low and behold, come across a presentation on just how dominant mobile is becoming - [The Evolution Of Marketing & The Future Retail Model](https://jeffharbaugh.com/the-evolution-of-marketing-the-future-retail-model/) - Recently, some companies have said some intriguing things about the omnichannel and the relationship between brick and mortar and online (for the record, when I say “online” I’m including mobile devices). I’ve also read some interesting things about generational behavior that made me think about the future of brands and retail structure. It’s no surprise - [Mobile! Mobile! Mobile!](https://jeffharbaugh.com/mobile-mobile-mobile/) - In some recent speeches and articles, I’ve been highlighting the growing importance of mobile to brands and retailers. I thought I’d been pretty aggressive in suggesting how important it has become (and is increasingly becoming), but I think I’ve probably been understating the case. Now, I’ve stumbled (thank you fabled research department) on an article/presentation - [The Abercrombie & Fitch Story. What Went Wrong?](https://jeffharbaugh.com/the-abercrombie-fitch-story-what-went-wrong/) - You have heard me say from time to time that companies get into trouble due to denial and perseverance in a period of change. I’ve also noted that it’s typically not the founder or executive who’s been in charge for a long time who can fix the problems. Their perception of the organization, relationships with - [Berrics Consumer Report](https://jeffharbaugh.com/berrics-consumer-report/) - You know, I always assumed/took for granted that skateboards you bought at Walmart or other large discount chains were not too good. I have to admit though that sometimes I thought to myself that maybe they weren’t a bad idea for a first deck if somebody was starting out. To be clear, I’m way too - [Interview with Blue Montgomery](https://jeffharbaugh.com/interview-with-blue-montgomery/) - Some people up in Canada decided, for whatever reason, to start an action sports industry news magazine called The BoardPress. Their sanity in trying to do this can be questioned, but they sent me a copy of their first print magazine, which came out some months ago. Probably hoping I’d write something about them. It - [Some Insight from Rip Curl](https://jeffharbaugh.com/some-insight-from-rip-curl/) - A reader sent me the article below that was published in the Australian on March 12th. I’d love to just provide you with a link, but The Australian would want you to sign up for an account and pay them money. I don’t blame them, but I doubt you’re going to do it and I - [What’s It Like Out There in the Real Skateboarding World?](https://jeffharbaugh.com/whats-it-like-out-there-in-the-real-skateboarding-world/) - The Board Press published a really good interview with Ultimate Distribution founder Kevin Harris. It’s his description of what he learned visiting 55 skate shops in Western Canada. I didn’t know there were 55 skate shops in Western Canada. Kevin’s description of what he learned reminds us, or at least reminds me, is how important - [The Sneaker Resale Market: Should Nike Maximize Its Profit?](https://jeffharbaugh.com/the-sneaker-resale-market-should-nike-maximize-its-profit/) - We are all aware that Nike releases smaller quantities of limited production sneakers that are sold at pretty typical retail prices then resold for big markups. The interesting question is why Nike doesn’t price them higher and take at least some of that retail profit for themselves. The guy profiled in this article called You - [An Interesting Point of View on the Future of Retail](https://jeffharbaugh.com/an-interesting-point-of-view-on-the-future-of-retail/) - Once again, my research department has come through. They’ve presented me with a paper from PwC and Kantar Retail that talks in some detail about where they see retail going between 2013 and 2020. It’s a little dated, but still very relevant. If you’re already seen it, never mind. I suppose one of the reasons - [Speaking of Technology……](https://jeffharbaugh.com/speaking-of-technology/) - We all give lip service to the speed of technological change. I imagine most of you have heard that the first driverless 18 wheel trucks are on the highways in Nevada. For the time being, they’ve got a driver accompanying them, but I don’t expect that to last. Here’s a link to the story in - [Why It Pays to be a Jerk](https://jeffharbaugh.com/why-it-pays-to-be-a-jerk/) - A gentleman named Jerry Useem wrote an article with this title for the June 2015 issue of The Atlantic. You can read the whole article here. It reviews research on how behavior in the work place impacts your success or failure. I would urge you to read the whole thing, but I particularly want to - [Further Information on Elizabeth Dolan Resignation from Quiksilver Board](https://jeffharbaugh.com/further-information-on-elizabeth-dolan-resignation-from-quiksilver-board/) - Here’s an article that contains additional information on why she resigned. I might not normally choose to post this, but it may provide some additional insight into Quiksilver’s turnaround efforts. You can decide for yourself what significance it has or does not have. Here’s the link to the article. - [Terrain, Lifts, and Gravity: Advantages in Summer Activities; Thoughts on survival and what used to be the off season for winter resorts.](https://jeffharbaugh.com/terrain-lifts-and-gravity-advantages-in-summer-activities-thoughts-on-survival-and-what-used-to-be-the-off-season-for-winter-resorts/) - Summer has been a hot topic in resort circles for years. I’ve run a couple of snowboard companies so understand what extreme, snow dependent, seasonality means. I’ve visited resorts, written about resorts, but never worked for one. SAM, I think, thought I was the right balance of insider and outsider for this assignment. At the - [GoPro’s Quarter. What Kind of Company is This Anyway?](https://jeffharbaugh.com/gopros-quarter-what-kind-of-company-is-this-anyway/) - Isn’t it interesting that I’m writing about GoPro at all? In 1995 I wrote my first column for Transworld Snowboarding Business and now, somehow, I’m writing about a consumer electronics company. Relax GoPro people. I know you aren’t really a consumer electronics company. Or at least, you don’t want to be even though right now - [What the Hell Happened? A Look Back to When the Federal Reserve Did Its Job](https://jeffharbaugh.com/what-the-hell-happened-a-look-back-to-when-the-federal-reserve-did-its-job/) - We’ve all heard the phrase, “Taking away the punch bowl.” As far as I know, it originated in the 1955 speech of Fed Chairman William McChesney Martin, which is presented below in its entirety. I suspect that most people, if they take the time to read it and have just a little knowledge of current - [Light at the End of the Tunnel – But it’s Not a Short Tunnel; Billabong’s Annual Report](https://jeffharbaugh.com/light-at-the-end-of-the-tunnel-but-its-not-a-short-tunnel-billabongs-annual-report/) - What we have here is progress, but still a long way to go. That’s how Billabong’s management characterizes their results, and I agree. I’ll take a look at the financials as reported and with the impact of divestures and certain “significant items” removed. Regular readers know I’m not quite comfortable with some of the stuff - [What’s “Bankruptcy” and How Does it Work?](https://jeffharbaugh.com/whats-bankruptcy-and-how-does-it-work/) - What exactly is a Chapter 11 bankruptcy filing and how does the process work? A Chapter 11 is a “reorganization” bankruptcy. That is, it is filed with the assumption that the filer will use the protection of the court to reorganize its finances so that it can continue as a going concern. That doesn’t always - [What Great Brands Do by Denise Lee Yohn](https://jeffharbaugh.com/what-great-brands-do-by-denise-lee-yohn/) - What Great Brands Do by Denise Lee Yohn was published in 2014. I met Denise when I was in the San Diego area to make a speech and talk to a company about some consulting. Honestly, I don’t read business books as often as I used to (which explains why this page isn’t updated more - [Why Are Millennials Still in the Basement?](https://jeffharbaugh.com/why-are-millennials-still-in-the-basement/) - While I’m quite sure you should no longer be segmenting your customer group strictly by age, it’s still true that somewhere between a lot to many or even most of them are coming from the so called millennial generation. So what think and how they’re doing matters to us. For many of them, the Great - [Kohl’s New Retail Experiment](https://jeffharbaugh.com/kohls-new-retail-experiment/) - My family has a beach house on Long Beach Island, New Jersey. I’ve been going there since I was a kid and still try to get back most summers. It’s where I learned to surf (I know- New Jersey surf? We work with what we’ve got). Anyway, I was back there in September and as - [Camp Chairs as a Game Changer; Supporting Your Customer’s Experiences](https://jeffharbaugh.com/camp-chairs-as-a-game-changer-supporting-your-customers-experiences/) - So, in a market where your customer may value the experience more than the product, how do you know that your product improves their experience? How do they find out it will? Why should they associate your product with the experience? What, exactly, is the experience you are improving? Let me tell you a story - [The Challenge Hasn’t Changed: GoPro’s September 30 Quarter](https://jeffharbaugh.com/the-challenge-hasnt-changed-gopros-september-30-quarter/) - On the face of it, GoPro had a pretty good quarter and, as usual, we’ll take a look at the numbers. The stock closed at $30.21 on October 28th. They released their earnings after the market closed. The next day, the stock closed at $25.62, down 15.2% on by far the biggest trading volume since - [This Should Get Your Attention: Amazon Opens Its First Brick and Mortar Store](https://jeffharbaugh.com/this-should-get-your-attention-amazon-opens-its-first-brick-and-mortar-store/) - Unfortunately, I didn’t write that just to get your attention. It’s true. You can read all about it in this article. As you read it, please focus on what it says about Amazon’s goal in having the store. It’s all about gathering and using data, says the author. Retail today is about getting the right - [“Forget Shopping. Soon You’ll Download Your New Clothes”](https://jeffharbaugh.com/forget-shopping-soon-youll-download-your-new-clothes/) - Television was first demonstrated back in the 1920s. But it was really wasn’t until the late 1950s that it took off. I don’t think breakthrough technologies take 30 plus years to make it into the mainstream any more. Maybe it’s better to say that once they reach their tipping point, their adoption accelerates dramatically. Why? - [The Role of Store Brands](https://jeffharbaugh.com/the-role-of-store-brands/) - I came across this short article recently talking about the ongoing improvement in store brands and their importance to retailers. Now, it’s not our industry but I thought everything they said applies to us. I guess the standard explanation for store brands is that they give the retailer some more margin. True, and that margin - [GoPro Gives Us Some Preliminary Financial Results](https://jeffharbaugh.com/gopro-gives-us-some-preliminary-financial-results/) - On January 13th, GoPro filed an 8-K with the SEC. In the press release it included, they announced expected fourth quarter revenue of $435 million and $1.6 billion for the year and a projected gross margin of 34.5% to 35.5%. The annual number represents 16% year over year revenue growth. By way of comparison, in - [Just When You Least Expect It- The Onewheel](https://jeffharbaugh.com/just-when-you-least-expect-it-the-onewheel/) - I just saw what I guess passes for a hover board in action. But it had a single wheel, rather than the two I’ve seen before. It seemed like more of a kind of skateboard, but let’s not call it that. Let’s call it a rideable, which is the term the company uses in this - [Retail and Brand Strategy: Cycles or Long Term Trends?](https://jeffharbaugh.com/retail-and-brand-strategy-cycles-or-long-term-trends/) - Could this time really be different? Recently, a couple of retail CEOs have been pointing out, or maybe bemoaning, the lack of a strong retail trend. They’ve noted how in the past they’ve been able to rely on such trends for big sales boosts and have explained their worse than expected performance partly by the - [Many Unhappy Returns](https://jeffharbaugh.com/many-unhappy-returns/) - Actually, that’s the title of the article I just finished that I want to pass along to you. It’s about how retailers, and ultimately brands, deal with returns and how much they costs. That returns are a pain in the ass and cost a lot of money is something we all already know. But some - [3D Printing the Mattel Way](https://jeffharbaugh.com/3d-printing-the-mattel-way/) - On several occasions, I’ve discussed 3D printing or directed you to some discussion of it. I’m here to do it again. I’ve gotten some feedback that it wasn’t practical or wasn’t going to happen quickly, but as far as I can tell it’s moving forward. Mattel has announced a $300 3D printer that will allow - [The Sports Authority Bankruptcy: Symptom of a Perfect Storm and How You Can Benefit](https://jeffharbaugh.com/the-sports-authority-bankruptcy-symptom-of-a-perfect-storm-and-how-you-can-benefit/) - TSA’s filing for bankruptcy on March 2nd wasn’t a surprise. It had missed a $20 million bond interest payment in mid-January. It reached an agreement with the bond holder to file and try to sell assets to pay down debt. We’ll see how that works out and if they can avoid liquidation. A couple of - [Some Numbers on Online Retail and Perspective on the Teen Market](https://jeffharbaugh.com/some-numbers-on-online-retail-and-perspective-on-the-teen-market/) - Moss-Adams Capital is the mergers and acquisitions, capital raising, strategic advising arm of Moss-Adams LLC, which does accounting, wealth management and taxes. As you may be aware, they’ve been pretty active in our industry, whatever industry we’re now in. For some time, they’ve published a report that provides information on which deals have been recently - [More Declines in Department Store Locations?](https://jeffharbaugh.com/more-declines-in-department-store-locations/) - The Wall Street Journal had an article this morning on how many locations certain department stores needed to close if they wanted to get their sales per square foot back to 2006 levels. While they may not (mostly) be the retailers we (hopefully) expect to sell to, the discussion of the dynamics leading to the - [Amazon, the Omnichannel, and the Impact of Retailers’ Brick and Mortar Legacy](https://jeffharbaugh.com/amazon-the-omnichannel-and-the-impact-of-retailers-brick-and-mortar-legacy/) - On April 24th, the Seattle Times ran an article called “Amazon’s Imitation Game.” It starts by describing how Amazon has knocked off an aluminum laptop stand by Rain Design that had been selling on Amazon for 10 years at a price of $43.00. Amazon started selling a similar product last July for around half that - [GoPro’s Quarterly Results: They Have to Create Other Revenue Sources. How?](https://jeffharbaugh.com/gopros-quarterly-results-they-have-to-create-other-revenue-sources-how/) - GoPro released the 10-Q for their quarter ended March 31st last Thursday. The company’s net income dropped from a profit of $16.8 million in last year’s quarter to a loss of $107.5 million in this year’s. The balance sheet remains very solid, though not quite as solid as a year ago. We’ll have our usual - [Online Advertising: Is the Bubble Bursting?](https://jeffharbaugh.com/online-advertising-is-the-bubble-bursting/) - It has been an element of faith that the days of print advertising were ending and we’d all be making our advertising and promotion buys online. I still expect print to be in a long term decline, but I just read a pretty persuasive article that talks about the decline of online advertising and the - [Let’s Not Just Blame Amazon](https://jeffharbaugh.com/lets-not-just-blame-amazon/) - The Amazon Effect is given a lot of blame for the lousy and, some say, deteriorating retail environment. I gather it was a topic of conversation at the recently completed Surf Industry Summit at Cabo. And I guess you can blame Amazon, if by blame you mean come up with a business model that’s attractive - [Is Claire’s Stores Our Next Bankruptcy Candidate?](https://jeffharbaugh.com/4428-2/) - Teen focused jewelry and fashion accessory retailer Claire’s Stores has more than 2,800 stores in Europe and the U.S. It was the “beneficiary” of a leveraged buyout (LBO) back in the giddy days of 2007. The debt it acquired in that process, along with the over retailed, soft economy, online selling environment has pushed it - [The Potential Downside of Successful Brand Building in an Online World?](https://jeffharbaugh.com/the-potential-downside-of-successful-brand-building-in-an-online-world/) - Branding, they tell me, is all about building a relationship between a customer and a brand. That customer, theoretically, will have a bias towards your brand that encourages less consideration of alternatives, more purchases and, hopefully, less price sensitivity. That’s the theory anyway. It was, most of us would probably agree, a pretty good theory. - [GoPro’s Quarter: Tactics VS Strategy](https://jeffharbaugh.com/gopros-quarter-tactics-vs-strategy/) - Just what kind of company is GoPro exactly? Well, obviously, in spite of its recent difficulties, it’s a huge success. How else can you characterize a founder and a company that recognized and created a new market, took the lead in it and built a billion-dollar business? But having accomplished that, it now has to - [Some Perspective on GDP Growth](https://jeffharbaugh.com/some-perspective-on-gdp-growth/) - Here I go again- telling you stuff I think you need to know but that’s kind of unpleasant to hear. I’d love to help you ignore it (come to think of it, I’d love to ignore it too), but it’s just not in my DNA. As you know, every quarter the markets and the press - [Minimum Raise Increases: They Do Have an Impact- and Not Just on the People Who Get Paid More](https://jeffharbaugh.com/minimum-raise-increases-they-do-have-an-impact-and-not-just-on-the-people-who-get-paid-more/) - I was reading Zumiez’s 10-Q and conference call and came across a question from an analyst (Sharon Zackfia from William Blair) on labor scarcity and wage pressures. Here’s what she asked: “I guess I’m curious from a labor standpoint kind of as labor gets scarcer and scarcer and wages are going up, how -- what - [A Lesson from a Related Industry](https://jeffharbaugh.com/a-lesson-from-a-related-industry/) - I love golf. That’s because I have an uncanny ability to only remember the good shots and to believe, in spite of all evidence to the contrary, that there’s no reason I shouldn’t play well next time. This, of course, is one popular definition of insanity- but perhaps I should move on. I mention golf - [Robots Invade Retail](https://jeffharbaugh.com/robots-invade-retail/) - I’ve stolen that title from the article I want you to read. It’s of particular interest to me because I live in the Northwest. More precisely, in Bellevue across the lake from Seattle. As an aside, the really good thing about living in the great state of Washington (regardless of your political affiliation) during this - [Growing Snowboard Brand Revenue; the Active Outdoor Market and Year Around Resorts](https://jeffharbaugh.com/growing-snowboard-brand-revenue-the-active-outdoor-market-and-year-around-resorts/) - There has been much ringing of hands and gnashing of teeth around the subject of snowboard participation and what to do about it. Studies have been done and programs implemented. What has their impact been? Hard to know, because we don’t know what things would look like if they hadn’t happened. SIA reports there were - [The Wallons and Skate Longboards](https://jeffharbaugh.com/the-wallons-and-skate-longboards/) - I want to talk about taking a long term perspective, unforeseen consequences, not learning from history and maybe confirmation bias. A couple of things have serendipitously come across my desk as the same time that made me renew by thinking on these issues. I seem to find my best business lessons everywhere but in business - [The Same Old Competitive Conundrum: GoPro’s September 30 Quarter](https://jeffharbaugh.com/the-same-old-competitive-conundrum-gopros-september-30-quarter/) - I like GoPro’s strategy. Or at least, I don’t know what other strategy I could choose to pursue as a public company in their space. Here’s how they describe its evolution in the 10-Q for September 30. “What began as an idea to help athletes document themselves engaged in sport, GoPro has become an end-to-end - [The Shape of Brick and Mortar to Come?](https://jeffharbaugh.com/the-shape-of-brick-and-mortar-to-come/) - I like to characterize a sudden good idea as getting whacked on the side of the head by a two by four. Today, I got whacked by a lily. My wife’s birthday is tomorrow and I walked into a convenient florist to order some flowers. Except what I walked into was a little café. Quite - [Why Did The Great Recession Happen?](https://jeffharbaugh.com/why-did-the-great-recession-happen/) - Why Did The Great Recession Happen? If you’ve ever looked at the suggested reading list on my web site, you know that I read some stuff that’s not related to business and certainly not to our industry. Not directly that is. But I think it helps me understand the environment we operate in and perhaps - [Internet Related Issues for Retailers and Brands to Think About](https://jeffharbaugh.com/internet-related-issues-for-retailers-and-brands-to-think-about/) - I wouldn’t quite characterize this as an article as much as random musing about some internet experiences I’ve had. I can’t wait to see what I write. My microwave broke. Not so much broke. The door wouldn’t latch so I couldn’t use it unless I stood there and held the door closed. Not particularly practical. - [GoPro Announces a Restructuring](https://jeffharbaugh.com/gopro-announces-a-restructuring/) - As part of a press release entitled “Solid Holiday Demand in the U.S. for GoPro HERO5,” GoPro announced, further down the press release, that its board of directors had “…approved a restructuring of the Company’s business. The restructuring includes a global reduction-in-force, the closure of the Company’s entertainment division and the consolidation of certain leased - [Some Waypoints in the Evolution of Retail](https://jeffharbaugh.com/some-waypoints-in-the-evolution-of-retail/) - During the last couple of weeks, I’ve come across a number of articles that speak to the evolution of retail. Here they are for your consideration in no particular order. Amazon’s new convenience store won’t have checkouts or cashiers. Is this an improvement in customer service, or does it mean customers don’t need any service? - [What Is the Value of Advertising?](https://jeffharbaugh.com/what-is-the-value-of-advertising/) - I read with some amusement as well as concern this article about an apparently still ongoing and massive online advertising fraud. I imagine you’re all aware of it. Meanwhile, back in this article, I mentioned the increasing use of ad blockers, especially by millennials. And within the last week or so, I questioned, as I - [The Impact of Demographics on the Active Outdoor Industry](https://jeffharbaugh.com/the-impact-of-demographics-on-the-active-outdoor-industry/) - I’ve just finished reading a book called The Methuselah Effect, by Patrick Cox. As I’ve said, I often get intriguing business ideas from non-business books. This is one of those times. I really recommend this book. The trouble is, it doesn’t seem to be on Amazon, which I’ve never seen before. Anyway, the book is - [What Will Retail Be Like in Five Years and How Will You Prosper?](https://jeffharbaugh.com/what-will-retail-be-like-in-five-years-and-how-will-you-prosper/) - That was the question asked at a meeting last week at the Agenda trade show. The meeting was attended by various invited brands and retailers and by me. This meeting has been going for maybe four shows now and has generally been thoughtful and productive. That’s a welcome improvement from the larger group meetings that - [An Analysis of Free Trade](https://jeffharbaugh.com/an-analysis-of-free-trade/) - I’ve been sitting on this for a while trying to figure out whether or not offer it up. It’s certainly not action sports or active outdoor focused. And, in our current environment, it’s inevitably going to be perceived as having a particular bias. I’d say it reaches a solid conclusion based on the data - [Trade Shows, the Buy/Sell Cycle, and Changing Consumer Habits](https://jeffharbaugh.com/trade-shows-the-buysell-cycle-and-changing-consumer-habits/) - Over the last months or maybe a year, I’ve watched the trade show discussion as dates have changed, unchanged, and we’ve all tried to figure out the role of trade shows. We agree, I think, on the following: We need some trade shows Right now, there are too many Face time is a primary benefit - [Nordstrom is Struggling with the Same Issues All Retailers Have](https://jeffharbaugh.com/nordstrom-is-struggling-with-the-same-issues-all-retailers-have/) - Last week was spent in Arizona on an annual excursion with old friends playing golf. In my case, bad golf. There may also have been a cocktail or two involved. Anyway, as I left, GoPro came out with its 10K annual report and, while I was gone, Billabong reported its half yearly numbers. So I’m - [Here It Comes; 3D Printing for Apparel](https://jeffharbaugh.com/here-it-comes-3d-printing-for-apparel/) - It was, I think, a couple of years ago when I said, 3D printing of various products is on its way. I suggested maybe getting a 3D printer for a few thousand bucks and experimenting with it. Maybe print some key chains or stuff like that. The responses were along the lines of “Oh, sure, - [GoPro’s Year and Quarter: Doing the Right Things, But……..](https://jeffharbaugh.com/gopros-year-and-quarter-doing-the-right-things-but/) - Let’s just jump right to a comment CEO Nick Woodman made during the conference call. “I would say that we are more focused on revenue and margin and less focused on volume on a unit basis.” That sounds to me like GoPro is more interested in the higher end of the market. And they should - [Amazon’s Retail Plans](https://jeffharbaugh.com/amazons-retail-plans/) - It’s all the Lydians’ fault. The Lydians were a people who lived in what’s now Eastern Turkey in the second millennium BC. Herodotus, writing around 450 BC, tells us this about them: “…the Lydians lived their lives in a way not dissimilar to the Greeks. So far as we know they were the first people - [An Intriguing Transaction: GoPro Wants to Sell Some Debt.](https://jeffharbaugh.com/an-intriguing-transaction-gopro-wants-to-sell-some-debt/) - GoPro’s press release of yesterday had the following title: “GoPro to Offer $150 Million of Convertible Senior Notes due 2022.” Well, okay, they’ve run through a lot of cash lately. That they might want to raise some makes sense. We don’t yet know anything about the terms. “The interest rate, conversion rate, offering price and - [Projected Retail Closings and Job losses for the Year](https://jeffharbaugh.com/projected-retail-closings-and-job-losses-for-the-year/) - People don't like people who make them uncomfortable. And when I do it, like now, I'm pretty sure it makes it less likely I get calls for consulting. But I'm all about trying to help you to run your businesses better and think you need the bad news as well as the good. Probably you - [Retail, Technology, Consolidation, and Unintended Consequences](https://jeffharbaugh.com/retail-technology-consolidation-and-unintended-consequences/) - This morning, the Seattle Times featured this article telling us that REI wage hikes for store employee announced last summer will be costing the company $24 to $25 million. The company’s net income for its last complete year was $38.3 million. Meanwhile, my oldest son sent me this article from Investor’s Business Daily, telling us - [What Keeps Jeff Bezos Up at Night- And Why What He’s Doing Should Keep You Up.](https://jeffharbaugh.com/what-keeps-jeff-bezos-up-at-night-and-why-what-hes-doing-keeps-you-up/) - To my mind, Amazon’s biggest strategic advantage is that they started without brick and mortar retail. The business was built for ecommerce and then, using the systems and data they’ve developed, they could look at brick and mortar making sure to have the right number of stores in the right places configured in the right - [Retailers and Landlords. Can’t Live With Each Other, Can’t Live Without](https://jeffharbaugh.com/4713-2/) - At this point, it’s common knowledge that diminishing mall traffic is leading retailers to close stores and/or renegotiate leases with landlords. There are also some store openings going on as retailers, hopefully, find locations and configurations better suited to the fast changing brick and mortar and e-commerce world. But relationships between retailers and landlords are - [“You Just Have to Get Traffic”](https://jeffharbaugh.com/you-just-have-to-get-traffic/) - Specialty beauty retailer Sephora (2,300 stores worldwide) seems to be a bit ahead of the curve when it comes to brick and mortar retail. As this article describes, they are using technology to give control to the consumer and create a “fun” experience for them. They are reducing the role of the sales person and - [A Follow-up on Pop-ups- Popping Up in Interesting Ways](https://jeffharbaugh.com/a-follow-up-on-pop-ups-popping-up-in-interesting-ways/) - In early 2015, I wrote “The Evolution of Marketing & the Future Retail Model.” It’s held up pretty well. In describing that retail model, I hypothesized about how pop-ups might be used. “Retail presence might be in pop up tents, in vans or trucks, on blankets at beaches, in a lift at a ski resort, - [Damn- Turns Out the Customer Is Always Right- More Than Ever Before](https://jeffharbaugh.com/damn-turns-out-the-customer-is-always-right-more-than-ever-before/) - Running an active outdoor business right now feels like a game of Whack-a-Mole. There’s too much retail- right size yours. Whack! Create product that can be meaningfully differentiated from competitors. Whack! Careful on that distribution. Whack! Manage your inventory and expenses cautiously. Whack! Figure out e-commerce without cannibalizing brick and mortar. Whack! Lower growth economy. - [Why It’s Not Just Amazon’s Fault](https://jeffharbaugh.com/why-its-not-just-amazons-fault/) - I’ve spent some years now listening to everybody bemoan Amazon’s impact on retail. Sometimes, it almost sounds like they believe that if there was no Amazon, everything at retail would be fine. As I’ve written, that’s not the case. Here’s an excellent article from somebody who agrees with me. It repeats some of - [One More Comment on Trade Shows, A Perspective On the “Outdoor” Industry, and Articles on Retail.](https://jeffharbaugh.com/one-more-comment-on-trade-shows-a-perspective-on-the-outdoor-industry-and-articles-on-retail/) - Trade Shows Trade shows were created to bring buyers and sellers, that is brands and retailers, together to do business. Everything else that goes on at trade shows, beneficial as it may be, has been secondary to that goal. But there are fewer smaller retailers and fewer retailers overall. The consensus is that the number - [Why is Back to School Shopping Slow?](https://jeffharbaugh.com/why-is-back-to-school-shopping-slow/) - SGB Media published an article last week called, “What’s Causing the Delays in Back-To-School Buying?” Here’s the link to the article. If you read the article (you should- SGB does a pretty good job), you’ll find a discussion of the factors said to be causing the delays- the usual suspects. I’d like to offer - [Some New (or Not) Retails Ideas](https://jeffharbaugh.com/some-new-or-not-retails-ideas/) - In my travels, I’ve come across a few articles describing some new retail ideas. I don’t know which might turn out to be “right” or “wrong,” but it seems incumbent on us to be aware and consider whether any of the ideas might apply to our businesses. I guess this is my way to help - [More Ideas About the Future of Retail](https://jeffharbaugh.com/more-ideas-about-the-future-of-retail/) - A reader sent me this article discussing how retail seems likely to evolve. Why don’t you go and read it before I offer my comments? The author (Doug Stephens) and I are, in general, in violent agreement about the direction and speed of retail change. We further agree that if you, as a retailer are - [Retailer Plans to Go Public. Wait…Now?...A Retailer?...Really?](https://jeffharbaugh.com/retailer-plans-to-go-public-waitnow-a-retailer-really/) - Roots, a Canadian retailer, has filed a prospectus for a public offering. Here’s the link to their web site. As usual, the initial prospectus is missing a lot of key numbers, but I’ll do the best I can. Roots has been around since 1973, so they must be doing something right. “As of July 29, - [3D Printing Finally Taking Off?](https://jeffharbaugh.com/3d-printing-finally-taking-off/) - During the last couple of years, I’ve written some articles pointing to the emergence of 3D printing, urging you to at least be aware of the trends even if we agreed it wasn’t going to rock your world today. I wrote about it here, here, and here. A new technology doesn’t appear fully formed in - [Maybe Not Being a Brand Is a Brand](https://jeffharbaugh.com/maybe-not-being-a-brand-is-a-brand/) - We believe in the power of brands. We have to. In action sports/active outdoor, there are very few “moats” around products. That is, there are few distinguishing product features not based on marketing that are sustainable and even long-established brand names run into difficulties holding onto their market positions. Witness Nike’s current struggles. Years ago, - [Retail Futures: Robo Shops?](https://jeffharbaugh.com/retail-futures-robo-shops/) - So, I don’t know what’s going to happen this afternoon, much less five years from now. Without comment, I just want to direct your attention to this article/presentation by the BBC. Just go to this link, hit “TAP HERE” and start reading, scrolling and watching. I’m sure some of this is going to happen. I’m - [Scooters. Yes, Really. An Article on Scooters](https://jeffharbaugh.com/scooters-yes-really-an-article-on-scooters/) - Personal Note: “Okay Diane [my wife], I give up. We’ve been trying to find a smaller house for two years in this stupid Seattle real estate market. It ain’t happening until next spring and I’m buying the cord of wood we need for our fire place to get through the winter (along with some red - [“What If You Are a Retailer Thinking of Just a Few Collections a Year?”](https://jeffharbaugh.com/what-if-you-are-a-retailer-thinking-of-just-a-few-collections-a-year/) - Or a brand for that matter. Please find 13 minutes to watch this Ted Talk on the evolution of retail in China. If you can’t do that, at least read the transcript in six minutes or so. The trends she discusses are enabled by the fact that 90% of online sales are controlled by two - [Looks Like GoPro Might Be Up for Sale](https://jeffharbaugh.com/4861-2/) - This article on CNBC has the title, "GoPro has hired JP Morgan to put itself up for sale." Sigh. I suppose the good news is that, along with Quiksilver, Billabong, Skullcandy, Spy, Mervin Manufacturing and probably some I don’t remember, GoPro is a company that will be better positioned to succeed as a business that - [Speaking of Consolidation- Boardriders’ Acquisition of Billabong](https://jeffharbaugh.com/speaking-of-consolidation-boardriders-acquisition-of-billabong/) - Back in September of 2013, when Centerbridge and Oaktree invested in Billabong, there was some discussion/consternation about the possibility of Oaktree combining Quiksilver, which it already controlled with Billabong. Quiksilver’s name, as you know, was changed to Boardriders. It owns the Quiksilver, Roxy and DC brands. Billabong’s three largest brands are Billabong, RVCA, and Element. - [Some Ideas About the Retail Environment](https://jeffharbaugh.com/some-ideas-about-the-retail-environment/) - My research department has been coming up with interesting reads I haven’t had time to pass on. Here are three worth a few minutes of your time. “5 Ways the Future of Retail is Already Here” shouldn’t surprise anybody who’s been paying attention. But it’s interesting to see these five retail evolutions listed together and - [Retail Jobs, the Internet, and the Role of Customer Service](https://jeffharbaugh.com/retail-jobs-the-internet-and-the-role-of-customer-service/) - I want to introduce you to a web site I subscribe to called Wolf Street. It’s free and you can sign up for emails if you want. Here’s the link the chart below comes from. You don’t have to read Wolf’s article to follow what I’m discussing, but you might take a look at it. - [Quality Information on the Internet and Ecommerce](https://jeffharbaugh.com/some-quality-information-on-the-internet-and-ecommerce/) - Mary Meeker is a venture capitalist focusing on the internet and new technologies. She’s a partner at the VC firm of Kleiner Perkins Caufield & Byers. Every year, Mary offers up her Internet Trends report in the form of slides. This year, it’s 294 slides long, but I’m asking you not to be put off - [How Brick and Mortar Retail Has to Change](https://jeffharbaugh.com/how-brick-and-mortar-retail-has-to-change/) - I don’t think brick and mortar is going away. I doubt many of you think it is either. I do believe that consolidation and transformation of the space has a way to go and I further believe it will reach its climax when (not if) the next recession hits. I know this sounds kind of - [Big 5 Sporting Goods July 1 Quarter; Are They Addressing the Retailer’s Challenge?](https://jeffharbaugh.com/big-5-sporting-goods-july-1-quarter-are-they-addressing-the-retailers-challenge/) - Regular readers know I’ve had a pretty strong and, I hope, consistent opinion about how retail is evolving and what retailers/brands in our industry need to do. Most recently, I wrote about it here. It’s occurred to me that I should look at some new industry related companies to see how they are doing and - [Strategy, Housekeeping and the Numbers: VF’s June 30 quarter.](https://jeffharbaugh.com/strategy-housekeeping-and-the-numbers-vfs-june-30-quarter/) - It’s interesting to review this recently released 10-Q, as it discusses VF before the recent announcement that they will spin off the jeans business as a separate public company. With hindsight, you can see how their strategy would lead to that decision. I’ll also outline the company’s change in their business segments and, of course, - [MooseMart- the Moosejaw Store on Walmart](https://jeffharbaugh.com/moosemart-the-moosejaw-store-on-walmart/) - Moosejaw, Wikipedia tells us, “…is an online and brick and mortar retailer specializing in outdoor recreation apparel and gear for snowboarding, rock climbing, hiking, and camping. The company was founded in 1992 by Robert Wolfe and David Jaffe, two longtime friends who chose to sell camping equipment instead of becoming wilderness guides. [3] Moosejaw is - [Lessons from the Not Entirely Unexpected Sears Bankruptcy Filing](https://jeffharbaugh.com/lessons-from-the-not-entirely-unexpected-sears-bankruptcy-filing/) - Serendipitously, I hear this is also the last season of the TV show “The Walking Dead.” But while I expect that TV franchise to continue in some form, the same can’t be said for Sears. I know it’s supposed to be a restructuring, but no amount of financial engineering can compensate for Sears’ lack of - [I Believe in Cycles- Even for Retail](https://jeffharbaugh.com/i-believe-in-cycles-even-for-retail/) - I believe in cycles; there will be another recession (sooner rather than later is my personal belief). There will be another major stock market correction at the end of which will be glorious buying opportunities. We are coming to the end of another debt super cycle (see the book This Time is Different; Eight Centuries - [What’s Jeff Reading? Buying by Algorithm and Spoofing the Customer as a Marketing Tool](https://jeffharbaugh.com/whats-jeff-reading-buying-by-algorithm-and-spoofing-the-customer-as-a-marketing-tool/) - Back in July, I read an article called, “High-skilled white-collar work? Machines can do that, too.” It talked about companies (Stitch Fix among them) using algorithms to design product and decide what and how much to buy when. Here’s the link. Two days ago my research department (whom I always hear from if I don’t - [Hibbett Sports: Annual Results and Omni-Channel Progress After a Remarkably Late Start.](https://jeffharbaugh.com/hibbett-sports-annual-results-and-omni-channel-progress-after-a-remarkably-late-start/) - “At the end of the second quarter of Fiscal 2018, we successfully launched our e-commerce website,” Hibbett Sports (HS) tells us in their 10-K for the year ended February 2nd. This isn’t news. I wrote about it last October when I discussed their quarterly results. If you’re not already familiar with HS, you might review - [The New Company You Are Building as the Competitive Environment Changes (and Changes, and Changes)](https://jeffharbaugh.com/the-new-company-you-are-building-as-the-competitive-environment-changes-and-changes-and-changes/) - Over years, I’ve written various articles about the evolution of our market and how we need to change to address it. I’d decided it was time to pull all those ideas together in one, hopefully, thought provoking, insightful, action motivating piece. Then a friend sent me Robin Lewis’s outstanding article on just this issue and - [What if Our Customers Just Don’t Have as Much Money to Spend?](https://jeffharbaugh.com/what-if-our-customers-just-dont-have-as-much-money-to-spend/) - We spend an awful lot of time trying to figure out how to sell our customers more stuff. It’s been tougher lately and shows no signs of getting easier. It’s the internet. Or over supply and too much retail. The customer wants experiences. Poor distribution. No product differentiation. Too many brands. A smarter and more - [What Happens When the Apparel You Buy Fits Perfectly Every Time?](https://jeffharbaugh.com/what-happens-when-the-apparel-you-buy-fits-perfectly-every-time/) - Technology that has value tends to get better and cheaper. I can’t think of a reason that won’t be true for the Zozosuit. “Japanese retailer Zozo, which operates Zozotown, the country's largest online fashion marketplace, has developed a figure-hugging bodysuit featuring lots of uniquely patterned dots.” “As you turn slowly round, your smartphone takes photos, - [What Caused Shopko to File for Bankruptcy? Two Parts to the Puzzle.](https://jeffharbaugh.com/what-caused-shopko-to-file-for-bankruptcy-two-parts-to-the-puzzle/) - Last Wednesday Shopko, a general merchandise retailer with 333 stores, filed for chapter 11 bankruptcy. On January 17th, SGB Media published an article on Shopko and the filing by Thomas J. Ryan with the title, “Shopko Becomes Latest Casualty Of Online Disruption.” I took umbrage at the suggestion that online disruption was the primary cause - [The Evolution of Sustainability and Implications for your Business Model](https://jeffharbaugh.com/the-evolution-of-sustainability-and-implications-for-your-business-model/) - Concern with sustainability is hardly new to us. As an industry, active outdoor has increased its focus on the environment and the impact of climate change for years. I think it’s in our DNA to believe that’s the right thing to do. That doesn’t mean we aren’t aware of the impact on what we sell - [Increasing Snowsports Participation: Are We Asking the Right Questions?](https://jeffharbaugh.com/increasing-snowsports-participation-are-we-asking-the-right-questions/) - For years bordering on decades, we’ve wrung our hands over the issue of increasing participation. There’ve been programs and research and money spent. Maybe without those programs things would be worse. But so far, they don’t seem to have moved the needle the way we want. We’ve got financial, demographic, and climatic factors in the - [And Now for Something Completely Different; Some Recommended Reading with Perspective on U.S. Economic and Financial Conditions](https://jeffharbaugh.com/and-now-for-something-completely-different-some-recommended-reading-with-perspective-on-u-s-economic-and-financial-conditions/) - In 5,000 years of recorded history, there isn’t another known instance of negative interest rates. Now we’ve got about $13 trillion of securities with negative interest rates around the world. So far, that hasn’t happened in the United States, but don’t assume it won’t when we finally get a recession. Money is a commodity. It - [Machine Learning Dominates AI Use for Retailers](https://jeffharbaugh.com/machine-learning-dominates-ai-use-for-retailers/) - This is interesting. It seems to indicate that most retailers are being left behind. You might want to click through to Capgemini and sign up for some of their research. Anyway, here's the link. - [What's Wrong with Capitalism?](https://jeffharbaugh.com/whats-wrong-with-capitalism/) - Well, uh, nothing actually. Okay, not nothing. Some things- sure. There’s no perfect system. But the real problem is that what we actually have is less and less like real capitalism. Adam Smith’s invisible hand and Schumpeter’s idea of creative destruction have both taken it on the chin. Quantitative easing, low to negative interest rates, - [The Disaster of Negative Interest Rates](https://jeffharbaugh.com/the-disaster-of-negative-interest-rates/) - On October 31, I posted an article called “What’s Wrong with Capitalism?” After a couple of paragraphs of me ranting and raving there was a link to an article that described what Ben Hunt calls the “financialization of Texas Instruments. It was disturbing to a few people I heard from and, I hope, to some - [What We Can Learn from New Paint Companies?](https://jeffharbaugh.com/what-we-can-learn-from-new-paint-companies/) - I imagine it’s happened to all of us. You need to paint (or if you’re lucky, have painted) a wall/room/house. You go into the store to pick “the right” paint color and are confronted with literally an infinite number of choices- because they can match any color you want. As if the paint chips by - [Tilly’s: A Solid Quarter. What Did They Do Right?](https://jeffharbaugh.com/tillys-a-solid-quarter-what-did-they-do-right/) - In its 10Q and conference call, Tilly’s is kind of tentative in explaining what they are doing right. Let’s go through the numbers and review a few conference call comments to see if we can tease out an explanation. Revenue for the quarter ended November 2 rose 5.4% from $146.8 million in the prior year’s - [Ski INC. 2020; My Second Ever Book Review](https://jeffharbaugh.com/ski-inc-2020-my-second-ever-book-review/) - It took two guys like author Chris Diamond and his editor Andy Bigford to make this book as valuable as it is. Their combined 88 or so years in the industry means they have the knowledge, perspective and access to write this book, and the book takes full advantage. When Chris says “ski” he means - [Thoughts from Outdoor Retailer/Snow Show](https://jeffharbaugh.com/thoughts-from-outdoor-retailer-snow-show/) - The first thing you think when you walk into the show is what an incredibly great idea it was to consolidate The Snow Show with Outdoor Retailer. The second thing you think is, “What took them so long?” I imagine the answer to that is quite a soap opera. The next thing I thought was - [Fewer Brands Simplifies Management but Means Bigger Bet on Each Brand: VF Corporation’s Quarter](https://jeffharbaugh.com/fewer-brands-simplifies-management-but-means-bigger-bet-on-each-brand-vf-corporations-quarter/) - VF continues to manage its brand portfolio consistent with its strategic imperatives. Before moving onto the financials, we’ll take a look at their decision to divest their occupational work brands. It’s consistent with other brand decisions they’ve made. The Deal Once they sell, as they’ve announced they will, the occupational portion of its work segment - [Keep Calm and Carry On](https://jeffharbaugh.com/keep-calm-and-carry-on/) - The poster with the slogan was issued in 1939 by the British. We don’t have anybody bombing our cities or threatening to invade us- exactly- but the coronavirus is a national challenge with social, financial and health related impacts unlike anything most of us have experienced. I’m not sure I’m overstating it to say - [Corona- The Beer, Not the Virus](https://jeffharbaugh.com/corona-the-beer-not-the-virus/) - And you think you’ve got problems with your brand? Actually- and I say this with a certain amount of relief- apparently relatively few people are stupid enough to relate the beer to the virus. Go take a look at this article on Snopes.com that discusses what’s happened to the brand in spite of some of - [Zumiez Reports Its Year and Quarter- But Let’s Try a Different Approach for Different Times.](https://jeffharbaugh.com/zumiez-reports-its-year-and-quarter-but-lets-try-a-different-approach-for-different-times/) - Zumiez reported their results for the year and quarter ended February 1st on March 12th. Great quarter and year. But about a week after their fiscal year ended, the impact of the pandemic on the economy became apparent. For all retailers who sell directly to the consumer, in our industry or not, the world is - [Kathmandu Releases First Numbers Including Rip Curl](https://jeffharbaugh.com/kathmandu-releases-first-numbers-including-rip-curl/) - Kathmandu released its number for the six months ended January 31 and I’ve finally gotten through the statements. Maybe the first thing you should do is go read what I wrote when Kathmandu acquired Rip Curl on October 31, 2019. Here’s the link. I thought the deal could work, but I was concerned by the - [Speaking of Things That Might Change:  Trade Shows and Emerald Expositions](https://jeffharbaugh.com/speaking-of-things-that-might-change-trade-shows-and-emerald-expositions/) - When we do get through the virus and at least some of the economic disruption, I’m wondering what the trade show environment might look like. It had already been changing and it seems pretty clear those changes are going to accelerate. Emerald Expositions, owner of Outdoor Retailer, Surf Expo and other trade shows, put out - [Emerald Raising $400 Million and OR Goes Digital.](https://jeffharbaugh.com/emerald-raising-400-million-and-or-goes-digital/) - On June 10 Emerald, the publicly traded company that runs trade shows including Surf Expo and Outdoor Retailer and owns Shop Eat Surf announced they were going to issue $400 million in convertible preferred stock. Like every company in our industry, Emerald is impacted by the pandemic, and is seeing already existing trends in its - [What A Top Epidemiologist Thinks.  Consider the Business Implications](https://jeffharbaugh.com/what-a-top-epidemiologist-thinks-consider-the-business-implications/) - A friend sent me this excellent interview with Dr. Michael T. Osterholm. He’s not a medical doctor. See his background here. Seems pretty clear he’s worth listening to when it comes infectious diseases. His objectivity and willingness to say what we don’t know impressed me. I’m supposed to write about business stuff. The interview may - [Macroeconomics, Data Systems, Balance Sheets and a Changing Business Model](https://jeffharbaugh.com/macroeconomics-data-systems-balance-sheets-and-a-changing-business-model/) - As I explained in an earlier article, my usual detailed analysis of company income statements and reports for quarters ending March through May went on hiatus. It didn’t seem useful given the initial disruption caused by the virus and lockdown. Not writing doesn’t mean I wasn’t reading. In no particular order, I reviewed VF, The - [Having Your Stores Open When Others Don’t.  Is it a Long-Term Advantage?  Big 5’s June 28 Quarter](https://jeffharbaugh.com/having-your-stores-open-when-others-dont-is-it-a-long-term-advantage-big-5s-june-28-quarter/) - It’s the financial statements we’re seeing and will see in the next month or so that will begin to help us decide who might be long term winners and speculate on why. I emphasize “speculate” because it’s too soon to reach conclusions. But I begin to think that keeping the new customers you got when - [Some Interesting Things You Might Have Missed](https://jeffharbaugh.com/some-interesting-things-you-might-have-missed/) - Emerald Raised the Money As I reported in June, Emerald Expositions was raising $400 million through a convertible, preferred stock offering. Part of it was an offering to its stockholders with its majority owner, Onex, agreeing to take whatever part of the offering those smaller shareholders did not purchase. I was skeptical in the article - [Globe’s Year- And I Tease Out the Six-Month Numbers](https://jeffharbaugh.com/globes-year-and-i-tease-out-the-six-month-numbers/) - The headline is that given the pandemic, Globe had a reasonable result for the year ended June 30, 2020 and ended with a strong balance. In the press release, they say their performance held up “adequately.” That’s a fine word to describe it. Australian accounting rules only require six months statements, rather than the quarterly - [Zumiez’s Quarterly Results:  Interesting Things They Say, But Don’t Quite Say](https://jeffharbaugh.com/zumiezs-quarterly-results-interesting-things-they-say-but-dont-quite-say/) - Zumiez reported a solid August 3rd quarter, and their balance sheet remains rock solid. They had to deal with the same pandemic issues as everybody else, and their responses were similar. But what we are reminded of in the 10Q and the conference call, like for the 50th time, is Zumiez’s is confidence in their - [Fashion in Games, 3D Printing (kind of), and Some Historical Perspective](https://jeffharbaugh.com/fashion-in-games-3d-printing-kind-of-and-some-historical-perspective/) - I should really be analyzing Kathmandu and the BOA deal. I will- I’m actually ready to start writing about Kathmandu- but wanted to take a short detour. I’ve come across three articles I recommend you read. The first two are from The Robin Report and the third by a geopolitical analyst by the name of - [Sweatpants, Women Only, Vermont Resorts, Cities Like Skateparks? Four Articles Worth a Few Minutes](https://jeffharbaugh.com/sweatpants-women-only-vermont-resorts-cities-like-skateparks-four-articles-worth-a-few-minutes/) - NOTE: I recognize there are paywalls and not all of you can read these. Often though, you can get a few free articles every month. About four weeks ago I got a new shoulder so I’ve been quiet for a while. This had been coming on for decades. It’s healing fine but leaves me with - [Maybe There’s More to This Than Just Trying to Meet Demand](https://jeffharbaugh.com/maybe-theres-more-to-this-than-just-trying-to-meet-demand/) - Recently, somebody sent me a link to the split board binding company SPARK R&D. Their home page has the title “Production and Inventory Notes,” where they explain how explosive demand and having to stop and restart production (all virus related) has lead to a shortage of their products and how they are working to meet - [“Morning Boys.  How’s the Water?”](https://jeffharbaugh.com/morning-boys-hows-the-water/) - A few days ago, I posted an article called “Maybe There’s More to This Than Just Trying to Meet Demand.” Among other things, I ask you to take a little time and a deep breath and think about what the future looked like. Towards the end I repeated a Mark Twain reputed quote; “It ain’t - [Whose Customer Am I Anyway?  Amazon is a Utility- Not a Retailer](https://jeffharbaugh.com/whose-customer-am-i-anyway-amazon-is-a-utility-not-a-retailer/) - I bought something from a brand. I bought it on their Amazon store. Amazon shipped it to me. I decided not to keep it. I returned it to a Kohl's. I don’t remember who actually delivered it. When I returned it, I didn't buy anything at Kohl's. But I had to walk through the store - [The Long Term, Historical Context for Running Your Business- This Time Is Not Different.  Probably.](https://jeffharbaugh.com/the-long-term-historical-context-for-running-your-business-this-time-is-not-different-probably/) - Is this a business article? Yes. But politics, economics and history are going to rear their ugly heads. Let’s put things in the context of history none of us were around to experience, because you’re going to live this context for some years to come. In some number of months things are going to begin - [Zumiez’s Quarter: It’s Not the Numbers, It’s the Strategy](https://jeffharbaugh.com/zumiezs-quarter-its-not-the-numbers-its-the-strategy/) - Well sure, we’ll spend some time on the numbers. You can see the impact of the pandemic for both better and worse. More importantly, their data systems, the trade areas, the way they treat brick and mortar and online as one sales channel and their culture are coming together in unprecedented economic and competitive conditions - [On the Surface, It’s All About the COVID.  But Not Really:  VF’s Quarter](https://jeffharbaugh.com/on-the-surface-its-all-about-the-covid-but-not-really-vfs-quarter/) - I’m sure you’ll all be stunned to learn that VF’s financial results for its December quarter were impacted by the pandemic. We’ll take a brief look at the numbers, but I won’t review VF’s virus related adjustments. They are broadly the same as what other companies did. There are also two strategic events I see - [Deckers’ Solid Quarter:  Your Retail Strategy Had to be Right Before There Was Ever a Pandemic](https://jeffharbaugh.com/deckers-solid-quarter-your-retail-strategy-had-to-be-right-before-there-was-ever-a-pandemic/) - Deckers produced a strong result in their quarter ended December 31. I guess either because or in spite of covid. Probably both. Which is an interesting thing to say and I’ll have to explain it. Revenue rose 14.8% from $938.7 million in last year’s quarter (LYQ) to $1.078 billion in this year’s. The gross margin - [What Do You Do for An Encore? Globe’s Six Month Results](https://jeffharbaugh.com/what-do-you-do-for-an-encore-globes-six-month-results/) - When revenues rise 60.3% (from $77.8 to $124.8 million- Australian dollars of course) and net profit is up 292.9% from $3.9 to $15.3 million for the six months ended December 2020 compared to the same period in the prior year, I’m not left with much to analyze. That’s especially true with Globe. As a public - [Wait- Isn’t There a Pandemic or Something?  Zumiez's Year and Quarter](https://jeffharbaugh.com/wait-isnt-there-a-pandemic-or-something-zumiez-year-and-quarter/) - You’d think I’d be getting used to it, but I still find myself surprised when another one of our industry’s public companies reports a strong quarter or, in this case, year. The reasons are tending to be similar across reporting companies; higher gross margin, customer lust to get outdoors, ecommerce growth, expense reductions, government help - [The Water We Swim in: Don’t Stop Your Pandemic Thinking Now](https://jeffharbaugh.com/the-water-we-swim-in-dont-stop-your-pandemic-thinking-now/) - I’ve used this before. But I want to use it again; it’s increasingly relevant and I can give credit to the person who came up with it. There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. - [Kathmandu Six Months Results: Hard to Evaluate the Quality](https://jeffharbaugh.com/kathmandu-six-months-results-hard-to-evaluate-the-quality/) - The first thing to remember as we review Kathmandu’s half year results is the timing of the Rip Curl acquisition. The acquisition was completed 31 October 2019. It’s included in Kathmandu’s numbers for the full six months of the period ended 31 January 2021 but for only three months during the prior period’s six months. - [What’s Jeff Reading: Vending Machines, Off Price Retail, Ghost Franchises](https://jeffharbaugh.com/whats-jeff-reading-vending-machines-off-price-retail-ghost-franchises/) - It wasn’t that long ago (actually it was, I’m afraid) when I reported, in a somewhat sarcastic tone, about Quiksilver trying to sell surf trunks in vending machines at resorts. This was before their bankruptcy filing. I thought that if they were highlighting this effort in a conference call, they were really struggling to find - [And Now for Something Completely Different](https://jeffharbaugh.com/and-now-for-something-completely-different/) - You haven’t heard from me much. Spent the last few months trying to figure out just how I could be useful to the industry. I decided it wasn’t by analyzing publicly traded company filings. Truth be told, that wasn’t fun for me anymore. I also think covid/masks/lockdowns/caution changed my behavior. Permanently? Don’t know. How about - [Trying to Ride Two Horses with One Ass: The Federal Reserve’s Predicament and Why You Care](https://jeffharbaugh.com/trying-to-ride-two-horses-with-one-ass-the-federal-reserves-predicament-and-why-you-care/) - It started in May of 1984 when Continental Illinois Bank failed. And was rescued. People were saved from having made a bad investment. So much for moral hazard- the idea that investing is a risk, which has evolved to be not the case in “too big to fail” companies. We know what happened. More and - [There’s Never Just One Cockroach:  The United Kingdom’s Pension Funds, FTX, and Japanese Central Bank Sleight of Hand](https://jeffharbaugh.com/theres-never-just-one-cockroach-the-united-kingdoms-pension-funds-ftx-and-japanese-central-bank-sleight-of-hand/) - In August of 2007, then Federal Reserve Chairman Ben Bernanke told Congress that the subprime crisis would be contained. We went on to have the Great Financial Crisis GFC), of which the subprime crisis was just one cockroach. Now we’re facing another financial crisis- potentially worse than the GFC- caused by another 15 years or - [Debt, Inflation, Capitalism, and the Denarius.](https://jeffharbaugh.com/debt-inflation-capitalism-and-the-denarius/) - I’ve spent copious amounts of time on financial history and trying to understand how money and debt work at a granular level. Still learning. You may not care about these kinds of details but as you’ve probably noticed they care about you and there’s no escape. History offers perspective and suggests that this time is - [This Can’t Be Happening- An Online Shopping Experience](https://jeffharbaugh.com/this-cant-be-happening-an-online-shopping-experience/) - It was not supposed to be 14 degrees in Seattle. But it was and we needed an extra space heater to try and keep the pipes from freezing. Diane (my wife- 37 years. Starting to look like it might work out) ordered one from Target and had a coupon for same day delivery (the Target - [Balance Sheets and Viruses; A Long Overdue Addition to “What’s Jeff Reading.”](https://jeffharbaugh.com/balance-sheets-and-viruses-a-long-overdue-addition-to-whats-jeff-reading/) - Howard Marks is one of the two founders of Oaktree Capital Management. Oaktree is “…a leader among global investment managers specializing in alternative investments.” If the name sounds familiar it’s because they owned Boardriders (Quiksilver, DC Shoes, Roxy, Billabong, RVCA, Element, Vonzipper) after buying Quik and Billabong after their travails started. Oaktree, as you know, - [Airports and Mountain Resorts](https://jeffharbaugh.com/airports-and-mountain-resorts/) - Seattle’s main airport is surrounded by communities and has grown like a weed right along with the Seattle metropolitan area. It has no practical way to expand. Through recent technology and some clever evolution of facilities the airport authority is doing everything it can to shoehorn more passengers and flights into the same space. But - [“Our Fortress Balance Sheet:” VF’s June 30 Quarter](https://jeffharbaugh.com/our-fortress-balance-sheet-vfs-june-30-quarter/) - That’s how CEO Steve Rendle describes it in the quarter’s conference call. We’ll quickly review the numbers, but in this maximum pandemic quarter, it’s not so much about the income statement as the strategy and management response. We’ll let VF’s management explain to us what they did and how they were prepared. Yeah, I agree. - [Why is Hibbett Sports Doing so Well This Quarter?](https://jeffharbaugh.com/why-is-hibbett-sports-doing-so-well-this-quarter/) - On July 20, Hibbett Sports released a press release and held a conference call to update it’s expected quarterly results. For their quarter ending July 31st, they forecast comparable stores sales to increase more than 70%. First half comparable store sales are expected to be up 20%. It’s great to have an industry retailer reporting - [How’s the Trade Show Business? Emerald Exposition’s Quarterly Results](https://jeffharbaugh.com/hows-the-trade-show-business-emerald-expositions-quarterly-results/) - Emerald didn’t report a great September 30 quarter. However, there are some mitigating factors. I’ll discuss those results and the factors below. Before digging into the numbers, let’s focus on issues of strategy and tactics. Emerald’s previous CEO was resigned about a year ago. It happened suddenly and, to the outside world at least, unexpectedly. - [Big 5 Sporting Goods. What Should We Think About Their Solid Quarter?](https://jeffharbaugh.com/big-5-sporting-goods-what-should-we-think-about-their-solid-quarter/) - At its September 29 quarter end, Big 5 had 433 stores down from 436 a year ago. Big 5 “…provide a full-line product offering in a traditional sporting goods store format that averages approximately 11,000 square feet. Our product mix includes athletic shoes, apparel and accessories, as well as a broad selection of outdoor and - [Kathmandu Buys Rip Curl: Analysis and Questions](https://jeffharbaugh.com/kathmandu-buys-rip-curl-analysis-and-questions/) - I admit it. Before this deal, I’d never head of Kathmandu, a public company headquartered in New Zealand. If you haven’t either, you can visit their consumer facing web site or their investors web site where you can pour over all the deal related documents I’ve looked at. Mostly, though, I think you’re happy to - [An Inevitable Deal: SPY Purchased by Bolle](https://jeffharbaugh.com/an-inevitable-deal-spy-purchased-by-bolle/) - I never learned why SPY went public in the first place all those years ago. I imagine it was because a group of people who may not quite have understood the industry saw potential fast growth and a chance to make a lot of money. Those were different times. I have some experience with that - [An Agnostic Moat; Zumiez’s Most Recent Quarterly Results](https://jeffharbaugh.com/an-agnostic-moat-zumiezs-most-recent-quarterly-results/) - Zumiez had a great quarter ended August 3 (remember I don’t write until I have received and digested the 10-Q). They did it with sales that rose just 4.3% from $219.0 in last year’s quarter to $228.4 million in this year’s. But they also increased their gross margin from 33.1% in the same quarter last - [Globe Sells Dwindle and Files Its Annual Report](https://jeffharbaugh.com/globe-sells-dwindle-and-files-its-annual-report/) - Globe filed its annual report for the year ended June 30, 2019 pretty much concurrently with the announcement that it had sold Dwindle to Highline Industries Corporation. Skatewire reported that the purchase price was $1.5 million, but what the annual report says is that the carrying value of the assets was $1.5 million. I haven’t - [Consolidation and Finding New Participants; Vail Buys Peak Resorts](https://jeffharbaugh.com/consolidation-and-finding-new-participants-vail-buys-peak-resorts/) - It was July 22nd when Vail announced it had reached an agreement to purchase Peak Resorts for $11.00 a share or a total of $264 million. Peak Resorts, traded publicly under the symbol SKIS, closed at $5.19 on July 19. Hard to say “no” when somebody offers you more than double your stock price. Vail - [Hibbett Sports Says Some Interesting Things: Can They Catch Up in Ecommerce?](https://jeffharbaugh.com/hibbett-sports-says-some-interesting-things-can-they-catch-up-in-ecommerce/) - In its conference call and 10Q filing for its May 4th quarter, Hibbett said some interesting things about what it’s doing. Let’s take a brief look at Hibbett and its numbers then talk about how Hibbett is trying to adjust to the changing retail world after its very late start. Hibbett describes itself as “…a - [Is There Value in Reporting Comparable Store Sales? Zumiez’s Quarterly Results](https://jeffharbaugh.com/is-there-value-in-reporting-comparable-store-sales-zumiezs-quarterly-results/) - A couple of years ago Zumiez stopped reporting comparable store sales changes and started reporting just comparable sales changes. That is, they no longer told us how their brick and mortar stores were doing in isolation from ecommerce. They were one of the leaders in making this change. Now, it’s how most retailers report. Their - [How VF Keeps Doing It: Size, Flexibility, Diversification, Disciplined Management Processes, Balance Sheet](https://jeffharbaugh.com/how-vf-keeps-doing-it-size-flexibility-diversification-disciplined-management-processes-balance-sheet/) - VF’s secret sauce isn’t secret. It’s just hard to do. Executing the strategy takes leadership, a quality team, organizational consensus, and a certain level of confidence and perhaps willingness to fail to take advantage of uncertain times. You’ve probably realized that every company needs those things. So let’s take a deep dive into how VF - [Emerald Exposition’s Results, SIA and the Trade Show Environment](https://jeffharbaugh.com/emerald-expositions-results-sia-and-the-trade-show-environment/) - Emerald and SIA are kind of, for now anyway, joined at the hip due to their ownership/continued involvement in the Snow Show. They are both trying to respond to profound changes in the active outdoor market that are changing their business models. I thought I might kill the proverbial two birds with one stone and - [Volcom Sold by Kering to Authentic Brands Group, Kind Of.](https://jeffharbaugh.com/volcom-sold-by-kering-to-authentic-brands-group-kind-of/) - The title of the press release is “Authentic Brands Group Acquires Volcom.” Well, not exactly. The Authentic Brands Group (ABG) press release goes on: “…ABG has taken a minority stake in Liberated Brands, the newly-formed operating company for Volcom. Todd Hymel and Volcom’s current management team have taken the majority stake in Liberated Brands and - [Recession as Part of Your Strategy: Zumiez’s Results for the Year Ended February 2nd](https://jeffharbaugh.com/recession-as-part-of-your-strategy-zumiezs-results-for-year-ended-february-2nd/) - Let’s go right to something Zumiez CEO Rick Brooks says at the end of the conference call on their results. “…our goals [is to] continue to grow the profitability of the business from [an] operating profit perspective. Now of course if we have recession we'll go backwards and we'll see competitors go away across the - [“More of the Same” is Not the Way to Prosper When Change in Retail is Rampant: Big 5 Sporting Goods.](https://jeffharbaugh.com/more-of-the-same-is-not-the-way-to-prosper-when-change-in-retail-is-rampant-big-5-sporting-goods/) - I don’t cover Big 5 every quarter. However, their 10K for the year ended December 30, 2018 requires some discussion. They seem to be flailing in the emerging retail environment and seem reluctant to respond to all the changes. They are betting that their old strategy will continue to work. It appears I’m not the - [Thanks to Their Australasia Segment, Globe Has a Solid Six Months](https://jeffharbaugh.com/thanks-to-their-australasia-segment-globe-has-a-solid-six-months/) - Globe reported growth in revenue and income for the six months ended December 31 though, as usual, they don’t give us much information on how they did it. I’ll tell you what I can glean from the public documents. All numbers in Australian dollars of course. Revenues rose 11.2% from the same period the previous - [Ho Hum. Another Solid Quarter: VF Corporation](https://jeffharbaugh.com/ho-hum-another-solid-quarter-vf-corporation/) - You know, this is getting boring. So boring, though in a good way, that I think I’ve just used the same title for two quarterly reviews. For the quarter that ended December 31, VF revenues were up 8% to $3.9 billion compared to the same quarter the previous year. They got to that amount from - [Trade Shows in General, Denver, SIA, ShopTalk, and Other Random Musings](https://jeffharbaugh.com/trade-shows-in-general-denver-sia-shoptalk-and-other-random-musings/) - There is a certain level of irony in my having left the Outdoor Retailer/Snow Show in Denver last Friday as the temperature was approaching 60 degrees and come home to Seattle where, today- so far (still coming down hard)- there’s three plus inches of snow on the ground and the temperature isn’t projected to get - [Nobody Wants to Talk About Sanuk, But Deckers Has an Outstanding Quarter](https://jeffharbaugh.com/nobody-wants-to-talk-about-sanuk-but-deckers-has-an-outstanding-quarter/) - That’s not quite true. I want to talk about Sanuk, though probably for the last time. There’s not a mention of the once high-flying brand in the conference call, and it only comes up in the 10-Q because, inconveniently I imagine, they have to acknowledge its existence. For the quarter ended September Sanuk revenue was - [Emerald Expositions' Quarter and the Trade Show Environment](https://jeffharbaugh.com/emerald-expositions-events-quarter-and-the-trade-show-environment/) - It’s a hell of a time to be in the business of putting on trade shows in the active outdoor business. Reed Exhibitions has “postponed” the January Agenda show in Long Beach and is planning to evolve it towards a consumer-oriented show. After last January’s show, I wrote that I didn’t think I’d be back - [Emerald Expositions Cancels Interbike for 2019](https://jeffharbaugh.com/emerald-expositions-cancels-interbike-for-2019/) - Emerald issued a press release today announcing that the Interbike show scheduled for September 2019 was a no go. Here’s the press release. I excluded the part at the end describing who Interbike and Emerald Expositions are. Interbike to Research Alternatives; Announces Show Will Not Take Place in 2019 SAN JUAN CAPISTRANO, Calif., – December - [Looks Like Amer Sports is Going Private](https://jeffharbaugh.com/looks-like-amer-sports-is-going-private/) - Back in October, there was some speculation that somebody wanted to buy Amer Sports and Amer said, “Yup, it’s true. We’re talking.” I wrote a short article about it at the time. On December 7th, they confirmed that there is, in fact, a cooperative tender offer coming beginning around December 20th. Here’s the link to - [Attacking the Retail Challenge: Zumiez’s Quarterly Results](https://jeffharbaugh.com/5136-2/) - I’ve decided that my best recent article was “How Brick and Mortar Retail Has to Change,” written last June. I was surprised it got so little feedback. Probably because the list of what customers don’t need us to do anymore is a little intimidating, and we aren’t sure how to respond. Even if, like Zumiez, - [Popups, Extra Week, Higher Costs; Tilly’s Quarter](https://jeffharbaugh.com/popups-extra-week-higher-costs-tillys-quarter/) - Tilly’s sales for the quarter ended October 28th were down 3.9%, or $6 million, to $146.8 million from last year’s quarter. However, the decline was due to “…the calendar shift impact of the 53rd week in fiscal 2017's retail calendar, which caused a portion of the high sales volume back-to-school season to shift into the - [It Probably Wasn’t the Plan; Abercrombie & Fitch’s November 3rd Quarter.](https://jeffharbaugh.com/it-probably-wasnt-the-plan-abercrombie-fitchs-november-3rd-quarter/) - Back in 2012 A&F had 946 U.S. stores. They ended the most recent quarter with 684 (plus 195 international stores). In the immortal words of Gary Schoenfeld in his first earnings conference call as CEO of Pac Sun however many years ago it was, “Nobody needs 900 Pac Sun stores.” Nobody needed 946 A&F stores - [Ho Hum- Another Strong Quarter for VF. And a Few Thing to Make You Think](https://jeffharbaugh.com/ho-hum-another-strong-quarter-for-vf-and-a-few-thing-to-make-you-think/) - It’s not my purpose to simply report earnings. That’s why you don’t see an article every time an industry public company reports. By waiting for the actual publicly filed document, I hope to glean a few pieces of information that might make you think-bring you up short even- and perhaps help you run your business - [In Touch with Reality? Big 5 Sporting Goods Quarter](https://jeffharbaugh.com/in-touch-with-reality-big-5-sporting-goods-quarter/) - For its September 30 quarter, 436 store Big 5 reported a small decline in revenue and a larger decline in net income. More significant to me are comments in the conference call that suggest a very traditional retail focus, rather than one acknowledging the massive changes required to succeed at retail. Revenue in the quarter - [Somebody Wants to Buy Amer Sports](https://jeffharbaugh.com/somebody-wants-to-buy-amer-sports/) - Back on September 11, due to some speculation in the media, Amer Sports confirmed that it had “…received a non-binding preliminary indication of interest…from a consortium comprising ANTA Sports Products Limited and the Asian private equity firm FountainVest Partners…” to buy all of Amer Sports’ shares at a cash price of forty Euros per share. - [Hibbett Sports, Inc: “At the end of the second quarter of Fiscal 2018, we successfully launched our e-commerce website.” Wait- What? That Can’t Be Right.](https://jeffharbaugh.com/hibbett-sports-inc-at-the-end-of-the-second-quarter-of-fiscal-2018-we-successfully-launched-our-e-commerce-website-wait-what-that-cant-be-right/) - From time to time, just for fun, I review public filings of companies I haven’t written about. Hibbett Sports, with 1059 stores in 35 states at the end of their August 4th quarter, is one of those companies. The quote in the title got my attention, to put it mildly. It’s not quite as bad - [Vans Investor Day: Can They Really Do This-$3 Billion to $5 billion in Five Years? Maybe They Can.](https://jeffharbaugh.com/vans-investor-day-can-they-really-do-this-3-billion-to-5-billion-in-five-years-maybe-they-can/) - On September 12, VF’s management team made a lengthy presentation to the investment community outlining Van’s expected future growth. In the accompanying press release they stated, “Over the next five years, the Vans® brand expects diversified and balanced growth across all product categories, channels of distribution and geographies, driven by disciplined execution and investment to - [Zumiez’s Strong Quarter; Stores, Stash, Expansion, Strategies, Shrinkage, Wayward, the Numbers](https://jeffharbaugh.com/zumiezs-strong-quarter-stores-stash-expansion-strategies-shrinkage-wayward-the-numbers/) - That’s a lot to cover. I had some hope this would be short. Let’s start with strategy and quote CEO Rick Brooks from the conference call. "Our top and bottom line results…are a direct result of our relentless commitment to winning with today’s empowered consumer. Our success continues to be driven by the strength of - [“A Destination Retailer.” Tilly’s August 4 Quarter](https://jeffharbaugh.com/a-destination-retailer-tillys-august-4-quarter/) - In its 10-Q Tilly’s describes itself as “…a leading destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls with an extensive assortment of iconic global, emerging, and proprietary brands rooted in an active and social lifestyle.” We all know what a destination retailer is; a store that - [Globe Had a Good Year- But It’s Hard to Tell How They Did It](https://jeffharbaugh.com/globe-had-a-good-year-but-its-hard-to-tell-how-they-did-it/) - I like Globe. They’ve always had a good attitude, have been able to spot opportunities, and have acknowledged and moved to correct mistakes when they happened. They are, as a result, a company I want to write about because I think we might all learn something. Unfortunately, their required statutory report for the year ended - [Deckers Has Strong Quarter- Sanuk Feels Like an Afterthought](https://jeffharbaugh.com/deckers-has-strong-quarter-sanuk-feels-like-an-afterthought/) - With its restructuring expenses largely behind it ($55.3 million since February 2016) and net sales up 19.5% for the quarter ended June 30 compared to the same quarter last year, Deckers reported a good result. Sanuk continues to be the laggard, and I still won’t be surprised to see Deckers management sell the brand, though - [VF to Spin Off Denim Business as Separate Public Company](https://jeffharbaugh.com/vf-to-spin-off-denim-business-as-separate-public-company/) - Yesterday, VF Corporation, owner of Vans, Reef, The North Face and a lot of other brands announced that it was spinning off its jean business (it owns Lee and Wranglers) into a separate public company with 100% of shares to be distributed to existing VF shareholders. It also announced that VF would be moving its - [A Look at Zumiez’s April 29 Quarter: I Take the Lazy Approach](https://jeffharbaugh.com/a-look-at-zumiezs-april-29-quarter-i-take-the-lazy-approach/) - I see no reason to spend time explaining what’s going on at Zumiez when CEO Rick Brooks has done me the favor of laying it out in his introductory conference call remarks. Read them, then I’ll offer short discussions. “Our top priority is to stay consistent and relevant with our customers in order to expand - [Deckers’ Results for the Year; Sanuk Continues in Cleanup Mode](https://jeffharbaugh.com/deckers-results-for-the-year-sanuk-continues-in-cleanup-mode/) - For the year and quarter ended March 31, Deckers improved its results as discussed below. Related to that improvement is the progress of its restructuring and operating profit improvement plans. As we review these results, we’ll see that Deckers is confronting the same issues other brands/retailers are confronting as the internet changes the role of - [Defying Gravity: VF’s Quarter and Van’s Results](https://jeffharbaugh.com/defying-gravity-vfs-quarter-and-vans-results/) - I’ve been opinionating for some time now that careful control of distribution was a requirement of brand building in a world of products very similar to competitors. I’ve further said that it might be a good idea to give up some sales and build the bottom line at some expense to the top line. I’m - [No Store Growth; Perhaps a Good Decision, But What’s the Strategy? The Buckle Annual Report](https://jeffharbaugh.com/no-store-growth-perhaps-a-good-decision-but-whats-the-strategy-the-buckle-annual-report/) - The Buckle ended its February 3rd fiscal year with 457 retail stores and expects to end the current year with the same number. These days, that may be exactly the right decision; the days of open more stores, automatically earn more money, are gone. So what’s the strategy? Over three years, revenues have fallen from - [A Brief Remembrance of SPY CEO Seth Hamot](https://jeffharbaugh.com/a-brief-remembrance-of-spy-ceo-seth-hamot/) - This isn’t the kind of thing I usually choose to write about. After some thought, I wanted to express how sad I was to hear about the recent passing of SPY CEO Seth Hamot. For years before I met Seth, I gave him a hard time. As a public company, SPY was a valuable source - [Zumiez’s Annual Results; And Tales from its Conference Call](https://jeffharbaugh.com/zumiezs-annual-results-and-tales-from-its-conference-call/) - My favorite part of a Zumiez’s conference call is when CEO Rick Brooks apparently decides the analyst has asked the wrong question or doesn’t quite understand the implications of what’s been asked. Two plus pages of transcript later, sometimes ably supported by CFO Chris Work, we may have forgotten the original question, but we’ve always - [VF’s Management Process and Strategy: Thoughts on Their Annual Report](https://jeffharbaugh.com/vfs-management-process-and-strategy-thoughts-on-their-annual-report/) - I’ve spent some time on VF’s 10-K filing for the year ended December 31, 2017. It was a thought provoking read (yes, I know I’m the only one who would say that about a 10-K) that left me thinking about how VF tries to derive its competitive advantage. There are some lessons in it for - [Revenues Flat, But Strong Bottom Line Performance; Globes Half Year Results](https://jeffharbaugh.com/revenues-flat-but-strong-bottom-line-performance-globes-half-year-results/) - Globe’s report for the six months ended 31 December 2017, as usual, gives us very little information. The only 17 page report makes just one incomplete mentions of their brands and tells us exactly nothing about how any of them are doing individually. Perhaps I’ll start by reminding you of their brands. They own are - [One Last Time! Billabong Reports Its Half Yearly Earnings.](https://jeffharbaugh.com/4905-2/) - Thursday’s earnings call by Billabong for the six months ended 31 December 2017 was its last unless something unexpected happens. With an anticipated late April closing of the acquisition of Billabong by Boardriders for $1.00 a share, with Billabong ending up private, we won’t be seeing any more of the company’s numbers. Everybody knows that - [Insights on the Sale of Billabong to Boardriders](https://jeffharbaugh.com/insights-on-the-sale-of-billabong-to-boardriders/) - On February 14th, Billabong released a 194 page document explaining the deal under which Boardriders (formerly Quiksilver and owned by Oaktree) will buy it for $1.00 a share (all number in Australian dollars unless otherwise noted). You can go to this page and click on “Court Orders Convening of Scheme Meeting” to download the document - [Billabong and Rip Curl; A Tale of Two Surf Companies and Their Interesting Juxta Positioning](https://jeffharbaugh.com/billabong-and-rip-curl-a-tale-of-two-surf-companies-and-their-interesting-juxta-positioning/) - A few weeks ago, you no doubt saw the reports that Billabong (which would mean Oaktree Capital Management- the controlling investor in Billabong) was doing due diligence on Rip Curl as a possible acquisition. Oaktree, of course, is also a major investor in Quiksilver. When Oaktree invested in Billabong, there were some rumblings about combining - [Billabong Receives an Offer to be Taken Private](https://jeffharbaugh.com/billabong-receives-an-offer-to-be-taken-private/) - Well, it appears I’ve done it again. After having published just this morning an article in which I said, “Billabong would be better off as a private company, but I don’t see a path to privatization that makes sense to Oaktree,” Billabong has received an offer to have its outstanding shares acquired for $1.00 each - [Deckers Has a Strong Quarter; Sanuk Shows More Signs of Life](https://jeffharbaugh.com/deckers-has-a-strong-quarter-sanuk-shows-more-signs-of-life/) - A revenue increase of 6.6% from $760 to $810 million for the quarter ended December 31st compared to last year’s quarter is a pretty good result these days. When you couple that with gross margin rising from 50.5% to 52.2% and reduce your SG&A expense 30.3% from $330 to $230 million, you get a pretax - [Trade Shows and Scooters](https://jeffharbaugh.com/trade-shows-and-scooters/) - I’m back from the first combined Outdoor Retailer/Snow Show trade show in Denver. The most impactful thing I brought back from the show was the flu. You guys who had dinner with me Thursday night- let me know if you got it. You know, last year I came home from Denver with what turned out - [Agenda Was Kind of Slow Last Week](https://jeffharbaugh.com/agenda-was-kind-of-slow-last-week/) - In the past, I’ve been more than willing to criticize trade shows, suggest changes, and express our mutual uncertainty as to what the role of trade shows should be and how they should perform that role. Even recognizing that the winter Long Beach Agenda typically has lower attendance than summer, I was surprised at the - [Sales Go Nowhere, But Profits Rise- A Poster Child? Tilly’s Quarter Ended October 28th](https://jeffharbaugh.com/sales-go-nowhere-but-profits-rise-a-poster-child-tillys-quarter-ended-october-28th/) - How, when you increase your sales less than half of one percent (compared to the prior year’s quarter) from $152.1 to $152.8 million, do you manage to increase your net income 36.5% from $6.42 to $8.76 million even though tax expense rose by $1.38 million while operating with five less stores (220 total)? Simple actually. - [Brands, Staffing, and Stores; Zumiez’s Quarterly Results](https://jeffharbaugh.com/brands-staffing-and-stores-zumiezs-quarterly-results/) - Zumiez increased revenues and profits in their October 29 quarter compared to the same quarter last year. The more interesting strategic question is how (if a single quarter is indicative of longer terms trends) and I’d like to highlight three factors that I see working together, though they are typically discussed separately. Zumiez keeps pointing - [Core Versus More; A History of the Surf Industry](https://jeffharbaugh.com/4810-2/) - Perhaps I bring the most value to the industry when a reader sends me something they think is important but that they don’t want to be directly associated with. And they figure, “Send it to Jeff! He’ll publicize anything.” Most of the time, they’re right and this is one of those times. We watched them - [The Details We Don’t See; Zumiez’s July 29 Quarter](https://jeffharbaugh.com/the-details-we-dont-see-zumiezs-july-29-quarter/) - During the quarter, Zumiez increased its sales and reduced its loss compared to the same quarter last year. It continued to follow its strategy and its balance sheet remains solid- perhaps a bit stronger than a year ago. I’ve generally been a supporter of Zumiez’s strategy. It’s not that they necessarily know any better than - [Not Too Bad, But Not Too Good. And Generally Uninformative. Globe’s Annual Results](https://jeffharbaugh.com/not-too-bad-but-not-too-good-and-generally-uninformative-globes-annual-results/) - Globe is no more immune to economic conditions than any other company. But what I’ve always liked about them is they seem to be in touch with reality and have a positive attitude about it. They haven’t always been right (me neither) but they’re not slow to realize when something should change and in making - [More of the Same; Billabong’s Results for the Year](https://jeffharbaugh.com/more-of-the-same-billabongs-results-for-the-year/) - Here’s what I said six months ago about Billabong: “Six months ago [talking about a year ago], reporting on Billabong’s results for the whole year, I said this was a challenging turnaround, Billabong was doing things right, they were starting to see results, but the market was tough, and implementing their plan was taking longer - [As the Trade Show Proposition Changes, Would You Want to Own More of Them? Emerald Expositions’ Quarterly Results](https://jeffharbaugh.com/as-the-trade-show-proposition-changes-would-you-want-to-own-more-of-them-emerald-expositions-quarterly-results/) - As you probably know, Emerald Expositions (EE) is the owner and manager of Surf Expo, Outdoor Retailer, and now what was formerly SIA’s Snow Show. Overall, they operate over 50 shows as well as other events. They’ve grown by acquisition, and expect to continue to do so. Their shows are in many industries and include - [To Have or Not to Have Stores; That is the Question. Deckers’ June 30 Quarter](https://jeffharbaugh.com/to-have-or-not-to-have-stores-that-is-the-question-deckers-june-30-quarter/) - The 10-Q reads this way: “…in light of the recent and continuing changes in the retail environment, we also believe it is prudent to further reduce our global brick and mortar footprint. We expect to continue to reduce our footprint through a combination of store closures and the conversion of owned stores to partner retail - [Advantage Big Guys with Solid Processes and Cash Flow: VF’s Quarter](https://jeffharbaugh.com/advantage-big-guys-with-solid-processes-and-cash-flow-vfs-quarter/) - Before I dive too deep into the financial weeds, let’s look at VF’s overall strategy as explained by CEO Steve Rendle and Chief Financial Officer Scott Roe in their conference call discussing the results for the quarter ended June 30, 2017. Strategy Stuff Steve: “…while we expect the retail landscape to remain uncertain, we will - [Agenda’s Got a Consumer Agenda](https://jeffharbaugh.com/agendas-got-a-consumer-agenda/) - As usual, the Agenda trade show, Long Beach version, was held July 13 and 14. What was unusual was that it was followed, on Saturday the 15th, in the same space with the same brands attending, by its first consumer show. Having no intention of spending three whole days in the Long Beach Convention Center, - [Deckers Under Pressure from Outside Investor](https://jeffharbaugh.com/deckers-under-pressure-from-outside-investor/) - Marcato Capital Management has taken what is now a 6% position in Deckers’ common stock. That Marcato was buying Deckers’ shares first became public knowledge towards the end of May. Partly in response to this and, apparently, to growing unhappiness on the part of other large shareholders, Deckers has undertaken a strategic review process to - [More Retail Perspective; Zumiez’s Quarterly Report](https://jeffharbaugh.com/more-retail-perspective-zumiezs-quarterly-report/) - The conference calls get shorter and shorter as Wall Street and its analysts decide the retail sector just isn’t worth their attention. I don’t and won’t invest in anything I write about but damn, this feels like one piece of putting in a bottom in the retail sector. Maybe it will take the recession to - [A Discussion of Retail Prompted by Deckers’ 10-K](https://jeffharbaugh.com/a-discussion-of-retail-prompted-by-deckers-10-k/) - When I report on a public company’s results, it’s always important to review the numbers. But the more I do that the more I realize my focus needs to be on how companies are trying to transition to the new retail environment in circumstances of high uncertainty. That is, they must transition to something they - [More of the Same: Tilly’s April 29th Quarter](https://jeffharbaugh.com/more-of-the-same-tillys-april-29th-quarter/) - These quarterly reports from retailers are getting kind of repetitive. It’s not just Tilly’s; they are all controlling inventory, slowing store openings (or closing stores), negotiating with landlords, trying to reduce operating expenses, doing omnichannel things and being generally grateful for anything that improves traffic and generates some incremental sales. Tilly’s conference call printed out - [Tilly’s Has a Great Quarter, But I’m Not Sure They Completely Know Why](https://jeffharbaugh.com/tillys-has-a-great-quarter-but-im-not-sure-they-completely-know-why/) - You can’t fault the numbers. Sales grew 7.4% for the quarter ended October 29th compared to the same quarter last year. That got them to $152.1 million in revenue for the quarter. Comparable store sales rose 4.4%, accounting for $6 million of the revenue increase. “Store comps were up low-single digits and e-commerce continued to - [Some Positive Trade Show News; Emerald Exhibitions to Acquire the SIA Show](https://jeffharbaugh.com/some-positive-trade-show-news-emerald-exhibitions-to-acquire-the-sia-show/) - Finally, some positive movement in the trade show space. I’ve hung back on writing about this for a few days but SIA President Nick Sargent sent out an email to all SIA members announcing and describing the deal, which is subject to approval by SIA’s premium members. The email from Nick was labeled “CONFIDENTIAL: DO NOT - [“Sacrifice a Little Growth…for Quality.” VF’s March 31st Quarter](https://jeffharbaugh.com/sacrifice-a-little-growthfor-quality-vfs-march-31st-quarter/) - Well, there you have it. At some level, it is that simple. But let me complete CFO Scott Roe’s comment in the conference call. “…we are sharply focused on fundamentals and willing to sacrifice a little growth in the near term for quality. Our efforts are clearly paying off in the gross margin line. And - [Zumiez’s Annual Report and Some Questions I’d Ask if I were an Analyst.](https://jeffharbaugh.com/zumiezs-annual-report-and-some-questions-id-ask-if-i-were-an-analyst/) - I’m always grateful when a company has a short 10K and conference call. I’m efficient at spotting the meat in a 10K, but it’s easier when it’s 77 pages, as Zumiez’s was, instead of 177 pages. Though when it’s 177 pages, there’s usually some really interesting stuff. Zumiez doesn’t need more than 77 pages. They - [Zumiez’s New Concept Store](https://jeffharbaugh.com/zumiezs-new-concept-store/) - Zumiez has been telling us for some time now, correctly I think, that they are approaching the number of Zumiez stores the U.S. market can support. They ended their January 31 year with 603 U.S. stores. No doubt they will continue to selectively open (and close) stores and there is certainly no exact number of - [Emerald Exhibitions- Owner of Surf Expo, Outdoor Retailer, Interbike and Others- Going Public. Why?](https://jeffharbaugh.com/emerald-exhibitions-owner-of-surf-expo-outdoor-retailer-interbike-and-others-going-public-why/) - Last Week Emerald Exhibition (EE) filed the S-1 that includes the first draft of its prospectus to go public. Because it’s the first draft a lot of information (like price per share and number to be sold) is missing. Still, it’s worth a review. We’ll summarize the company’s history and activities, look at the financial - [How Was VF’s Year?](https://jeffharbaugh.com/how-was-vfs-year/) - It’s accurate to say that VF ran into the same issues and economic dislocations as other brands and retailers. During their fourth quarter, ended December 31, 2016, revenues fell 2.7% from $3.41 billion to $3.32 billion in the quarter ended December 31, 2015 (the prior calendar period- PCP). Net income was also down from $312 - [The U.S. is Tough on Another Company: Globe’s Half Yearly Results](https://jeffharbaugh.com/the-u-s-is-tough-on-another-company-globes-half-yearly-results/) - Globe published its results for the six months ended December 31st on February 21st and I missed it. Better late than never I guess. Happily for Globe, its largest market in Australasia was strong because revenues in Europe and North American (NA) were down pretty dramatically. Total revenues fell 10.6% from $79.1 in the six - [It’s Not All About the Omnichannel? Could That Be Okay? The Buckle’s Annual Report](https://jeffharbaugh.com/its-not-all-about-the-omnichannel-could-that-be-okay-the-buckles-annual-report/) - The way The Buckle 10K and conference call come across, you can’t quite decide, at first read, if they’ve made a specific decision to focus on brick and mortar or if they are just way, way behind in online. I think it’s the former given how they describe their business and how they compete. The - [Billabong’s Six Month Report: The More Things Change, the More They Stay the Same](https://jeffharbaugh.com/billabongs-six-month-report-the-more-things-change-the-more-they-stay-the-same/) - Six months ago, reporting on Billabong’s results for the whole year, I said this was a challenging turnaround, Billabong was doing things right, they were starting to see results, but the market was tough, and implementing their plan was taking longer and costing more (perhaps because it’s taking longer) than they’d initially expected. That’s all - [Trade Shows: Can’t Live with Them, Can’t Live Without Them](https://jeffharbaugh.com/trade-shows-cant-live-with-them-cant-live-without-them/) - Life was simpler when I wrote my first article on trade shows in the mid-90s. We went to trade shows because it was the only place to see, and to make, complete product presentations, and discover new, meaningful, features and products. There were also a lot more specialty retailers. The shows were the only place - [Deckers’ Quarter: More Sanuk Travails and the Public Company Conundrum.](https://jeffharbaugh.com/deckers-quarter-more-sanuk-travails-and-the-public-company-conundrum/) - I’ve reviewed Deckers’ 10Q for the three months ended December 31, 2016 and their conference call. The company earned $41 million on sales of $760 million in the quarter, which isn’t bad. But that’s down from net income of $157 million on revenues of $796 million in the same quarter last year. The problem? I’m - [The Buckle Has a Lousy Quarter- Kind of. Well, Not Exactly. Can the Outsized Returns Continue?](https://jeffharbaugh.com/the-buckle-has-a-lousy-quarter-kind-of-well-not-exactly-can-the-outsized-returns-continue/) - As I’ve recently written, Tilly’s and Zumiez were kind of caught by surprise by their very positive end of October quarterly results. But because the surprise was of the positive kind, nobody seemed to care. Though perhaps they should. The Buckle, on the other hand, reported a 14.6% decline in revenues from $280 million in - [Zumiez Has a Good Quarter Too](https://jeffharbaugh.com/zumiez-has-a-good-quarter-too/) - Zumiez’s 10-Q for its quarter ended October 31 reported an increase in sales and profits. I used the word “Too” in the article title because it sounds a bit like the Tilly’s results I reported a few days ago. Zumiez, like Tilly’s, would like to point to all the good things it’s doing as being - [We’re All in This Together: Things to Think About from VF’s Quarterly Report](https://jeffharbaugh.com/were-all-in-this-together-things-to-think-about-from-vfs-quarterly-report/) - We’re All in This Together: Things to Think About from VF’s Quarterly Report VF’s 10-Q for the quarter ended September 30 showed up last week. As usual, I’ll look at the numbers. But I want to focus on several statements and action VF highlights in their conference call and 10-Q. They highlight the extent to - [Finally, a Sign of Life at Sanuk: Deckers’ September 30 Quarter](https://jeffharbaugh.com/finally-a-sign-of-life-at-sanuk-deckers-september-30-quarter/) - Deckers, as you know, owns Ugg, Teva, and Hoka as well as Sanuk and some other smaller brands. Their second quarter kind of reflected the economic and competitive conditions we’re seeing as most companies report their results. However, Deckers is making a solid overall profit. Total revenue at $485.9 million didn’t change much. It was - [Billabong’s Annual Meeting: The Future’s Still Coming](https://jeffharbaugh.com/billabongs-annual-meeting-the-futures-still-coming/) - Billabong held its annual meeting on November 22. Back in August, I reported on Billabong’s results for the year ended June 30. Here’s the link to that article. The headline numbers then (all numbers in Australian dollars) were revenue from continuing operations of $1.10 billion and a net loss after tax of $23.7 million. I - [My Farewell to PacSun as a Public Company](https://jeffharbaugh.com/my-farewell-to-pacsun-as-a-public-company/) - It was a couple of weeks ago that PacSun finally released its year end financials for January 30, 2016. Arguably, nobody cares given the time that’s passed, the bankruptcy filing and the fact that they’ve now emerged from bankruptcy. But a brief review of the numbers tells us something about how the company deteriorated to - [What All Retailers Are Doing: A Short Note on Tilly’s July 30 Quarter](https://jeffharbaugh.com/what-all-retailers-are-doing-a-short-note-on-tillys-july-30-quarter/) - Tilly’s has the same issues all retailers are facing, and their response isn’t really different. But at least they grew their sales and net income a bit. Revenue in the quarter ended July 30 rose 4.9% to $136.4 million from $130.0 million in last year’s quarter that ended August 1, 2015. They also managed to - [Zumiez Quarter and Some Interesting Conference Call Comments](https://jeffharbaugh.com/zumiez-quarter-and-some-interesting-conference-call-comments/) - Zumiez is one of the public companies I follow that I hold up as doing most things right, but that doesn’t make them invulnerable to a tough economic environment. Revenues for the quarter ended July 30 were down 0.86% from the same quarter ended last year on August 1. They declined from $179.8 to $178.3 - [Globe Reports Annual Results. How Was the Second Half of the Year?](https://jeffharbaugh.com/globe-reports-annual-results-how-was-the-second-half-of-the-year/) - Well, how nice to be reporting the results of an Australian company that’s making money. Life was not as good for Globe in the second half of the year as in the first. Still, it feels like they are doing most things right. I suppose I should confess that they sent me a copy of - [VF’s June 30 Quarter: It’s Not Easy Out There for Anybody](https://jeffharbaugh.com/vfs-june-30-quarter-its-not-easy-out-there-for-anybody/) - After the results we’ve seen from VF in previous quarters and years, this quarter’s can only be characterized as disappointing. Just goes to show you how difficult the market is right now. They’ve got lots of company. Total revenue rose just 0.75% to $2.445 billion. VF ended the quarter with 1,461 brick and mortar stores - [Deckers’ June 30 Quarter; Continuing Problems with Sanuk](https://jeffharbaugh.com/deckers-june-30-quarter-continuing-problems-with-sanuk/) - This is the first earnings release and conference call since Dave Powers, who was previously President, took over as CEO from Angel Martinez at the end of May. He steps into the position at a time when Deckers, as well as other brands and retailers, are suffering from general economic conditions and the continuing growth - [The Future Isn’t Here Yet: Billabong’s Results for the Year](https://jeffharbaugh.com/the-future-isnt-here-yet-billabongs-results-for-the-year/) - Billabong published its results for the year ended June 30th last week. The headline numbers (all numbers in Australian dollars) are revenue from continuing operations of $1.10 billion and a net loss after tax of $23.7 million. The numbers for last year (pcp- prior calendar period) were revenue of $1.06 billion and a profit of - [SurfStitch Annual Results- Wow! And Not in a Good Way.](https://jeffharbaugh.com/surfstitch-annual-results-wow-and-not-in-a-good-way/) - I’ve been encouraged by a couple of readers to pay attention to SurfStitch, which I haven’t typically covered. But now I am. Turns out, it’s way too interesting not to. SurfStitch (SS for short) is an ecommerce retailer through the three sites SurfStitch.com, Surfdome.com, and Swell.com. It also has three sites it calls media platforms; - [Skullcandy Files It’s 10-Q in the Middle of Going Private](https://jeffharbaugh.com/skullcandy-files-its-10-q-in-the-middle-of-going-private/) - Skull filed its 10-Q for the June 30 quarter on August 9th. As you are probably aware, there are a couple of dueling offers to take the company private out there. At this point, I’d be surprised if they didn’t end up private- I’m just not sure of the price or who the owner will - [Vail Buys Whistler; A Good Deal For Everybody?](https://jeffharbaugh.com/vail-buys-whistler-a-good-deal-for-everybody/) - You know, I always try to write things that identify a valuable business lesson. The valuable business lesson here I guess is do what Vail did. While I think there are a couple of interesting industry considerations, I can’t strategically fault this deal. Vail by no means got a great deal with a price of - [Good Things Happening at Spy.](https://jeffharbaugh.com/good-things-happening-at-spy/) - You may remember that until a few months ago Spy, as a public company, was releasing the usual filings and I was analyzing them. But they stopped releasing them and, though still public, its shares are now traded on the OTC pink sheets under the symbol XSPY. As I wrote every quarter, I always liked - [Billabong Sells Sector 9 and Lets Fly with a Press Release](https://jeffharbaugh.com/billabong-sells-sector-9-and-lets-fly-with-a-press-release/) - Well, the press release was back on June 3rd. And the sale of Sector 9 was, I guess, a week ago. Happily, it’s not my job to be timely, but to give you things to think about with the goal of maybe helping you do better business. So let’s think about Billabong. Back when CEO - [Fun Times at Other Industry Retailers](https://jeffharbaugh.com/fun-times-at-other-public-retailers/) - At almost the same time Abercrombie & Fitch (owner of Hollister), Tilly’s, The Buckle, and Genesco (owner of the Journeys chain) released, in early June, 10-Qs for their quarters that ended April 30th. I was going to do my usual thing and review each one separately. But I was busy, too much time passed and - [Agenda- Trade Shows, Brands I Saw and Possibly Random Thoughts](https://jeffharbaugh.com/agenda-trade-shows-brands-i-saw-and-possibly-random-thoughts/) - What I most liked about Agenda this time was how refreshingly inviting it was. Lots of open space and perhaps wider aisles. Maybe lighter? Especially on Wednesday, there appeared to be a lot of traffic and people seemed upbeat. Apparently that might have had something to do with getting a few days of sun after - [IASC Skateboarding Summit - Have We Found a More Valuable Way to Talk With Each Other?](https://jeffharbaugh.com/iasc-skateboarding-summit-have-we-found-a-more-valuable-way-to-talk-with-each-other/) - So there I was sitting in the conference room of the Embassy Suites for day one of the IASC Skateboarding Summit waiting for the dreaded retailer panel to start. You all know the panel I mean. They have one at every industry trade show and conference I’ve ever been to. Three or four retailers sit - [VF’s Quarter: It’s Not Easy for Anybody Out There](https://jeffharbaugh.com/vfs-quarter-its-not-easy-for-anybody-out-there/) - VF filed its 10-Q for the quarter ended April 2nd on May 10th. The results, while in line with expectations, showed VF under the same kind of pressure other public companies are dealing with. Even their action sports segment, where most of their growth has been coming from, experienced very modest sales growth and reduced - [Skullcandy Founder Rick Alden Considering Transaction to Take Skullcandy Private](https://jeffharbaugh.com/skullcandy-founder-rich-alden-considering-transaction-to-take-skullcandy-private/) - Skullcandy filed a form 13D today with the Securities and Exchange Commission announcing that founder Rick Alden was going to explore a transaction to take the company private. To be clear, that doesn’t mean it will go private. Here’s the relevant section of the 13D. “On June 6, 2016, representatives of an investment entity controlled - [The Impact of Market Consolidation](https://jeffharbaugh.com/the-impact-of-market-consolidation/) - We’re all watching the continuing rationalization of our retail space. I suppose “rationalization” is a way too benign sounding word for a process that includes bankruptcies, store closings, job losses, margin hits, too much inventory, and struggles to increase sales and even to stay in business. As ugly as this continues to be, there are - [Another Tender Offer for Skullcandy- It Will Be Good to See the Brand Private](https://jeffharbaugh.com/another-tender-offer-for-skullcandy-it-will-be-good-to-see-the-brand-private/) - I imagine you are all aware that Incipio reached an agreement with Skullcandy on June 23rd to make a tender offer for the company’s common stock at a price of $5.75 representing a price of approximately $177 million. That agreement allowed Skullcandy some time (until July 23rd) to see if it could find a better - [Preparing for Long Term Market Ambiguity; Zumiez’s April 30th Quarter](https://jeffharbaugh.com/preparing-for-long-term-market-ambiguity-zumiezs-april-30th-quarter/) - I’ve generally been a supporter of Zumiez’s strategy and believe they’ve done most things right. So when I see them suffering right along with everybody else in a difficult (not nearly a strong enough word) retail environment, it really brings home to me just what we’re dealing with. The numbers first, then the strategic issues. - [Is Everybody Pursuing the Same Strategies? Deckers’ Year and Quarter](https://jeffharbaugh.com/is-everybody-pursuing-the-same-strategies-deckers-year-and-quarter/) - The quarter and year ended March 31st weren’t great for Deckers. Mostly, you’ve probably noticed, they haven’t exactly been great for companies I’ve written about in general. What somehow got my focus as I read Deckers’ 10-K was the continued and, indeed, increasing sameness of what all the public companies are saying. Let’s start with - [The News is Good, But the Loss is Higher? Skullcandy’s March 31 Quarter](https://jeffharbaugh.com/the-news-is-good-but-the-loss-is-higher-skullcandys-march-31-quarter/) - Skull’s loss for the quarter ended March 31 rose 27.9% from $3.7 to $4.9 million. Sales rose just 1.4% to $46.3 million while the gross profit margin dropped from 40.9% in last year’s quarter to 37.5% in this year’s. The pretax loss rose 50% from $4.6 to $6.9 million. The balance sheet remains as strong - [Skullcandy’s Strategic Positioning and Annual Results](https://jeffharbaugh.com/skullcandys-strategic-positioning-and-annual-results/) - Somehow, I didn’t see Skull’s 10-K with their results for the December 31, 2015 year when it came out and then I found myself busy with a couple of clients. But it’s not so much that I want to give you a deep dive on the financials, but that I want to talk about their - [The PacSun Bankruptcy](https://jeffharbaugh.com/the-pacsun-bankruptcy/) - Nobody who’s followed PacSun or my analysis of it was very surprised by yesterday morning’s filing of a Chapter 11 bankruptcy. We’ve had a number of retail bankruptcies and I expect more. Somebody suggested to me that the filing might occur around this time because their 10-K with audited financials would be due to be - [Zumiez’s Year and Quarter; What Are They Preparing For?](https://jeffharbaugh.com/zumiezs-year-and-quarter-what-are-they-preparing-for/) - Like most industry retailers, Zumiez has been impacted by a slow growth economy, reduced and redirected spending on the part of its primary customer group, and the internet’s ability to make consumers powerful, product differentiation harder, and the brand cycle shorter. There’s no news there and nothing unique as far as its impact on Zumiez - [Consignments to Sports Authority; Well, This is Awkward](https://jeffharbaugh.com/consignments-to-sports-authority-well-this-is-awkward/) - Just for fun, let’s say you’re a brand that has some product at The Sports Authority (TSA) on consignment. When TSA filed for bankruptcy, your finance and credit people probably high fived each other out of the sheer joy of knowing that they could expect to be paid for that product when it was sold - [Globe’s Half Year Results- Serious Improvement, But It's Hard to Figure Out Just What They Did Better](https://jeffharbaugh.com/4327-2/) - This is going to be a short article. On February 23rd, Globe reported solid improvement for the half year ended December 31, 2015. But I don’t have much to tell you in terms of what they did better or how because it wasn’t in the public information. Let’s go with what we’ve got. The numbers - [Good and Bad- Billabong’s Six Month Results](https://jeffharbaugh.com/good-and-bad-billabongs-six-month-results/) - Billabong presented its results on February 26th, which is a day before I took off for a week in Scottsdale to golf and have a drink or two with old friends. As usual, a lot seems to have happened while I was gone, and I’m working to catch up. I agree with Billabong CEO Neil - [What Does Snowboarding Need? Perhaps the Wrong Question?](https://jeffharbaugh.com/what-does-snowboarding-need-wrong-question/) - I’ve almost shoveled my desk off after the always enjoyable SIA show in Denver. That shoveling process always includes reviewing the various catalogs and magazines I’ve picked up during trade show season and, as always, one of those was Transworld Business. I’d had it since Agenda, but hadn’t finished reading it. I particularly liked Annie - [Deckers’ (and Sanuk’s) Results](https://jeffharbaugh.com/deckers-and-sanuks-results/) - Deckers published its 10-Q for the quarter and nine months ending December 31 a couple of days ago. In the environment we’re in, where general expectations seem low, being a company with a solid balance sheet (though inventory was up 26% over a year ago) that’s nicely profitable and more or less holding its level - [Quiksilver’s Annual Results and a Bankruptcy Update](https://jeffharbaugh.com/quiksilvers-annual-results-and-a-bankruptcy-update-the-end-is-near-of-the-bankruptcy/) - Quik filled its 10-K for the year ended October 31, 2015 on January 27th. Meanwhile, as you probably know, the bankruptcy court has confirmed the company’s reorganization plan and it may be out of bankruptcy by the time you read this. Doing my usual detailed review of the year doesn’t seem all that productive as - [The SIA Show: Dates, Data, Skate, Change, Burton and a Business Model I Like](https://jeffharbaugh.com/the-sia-show-dates-data-skate-change-burton-and-a-business-model-i-like/) - Well, I guess we might as well get right to it. The date change for the SIA show to three week days in early December starting in 2017 was a major topic of conversation at the show. I got a point of view. Several, actually. The New Dates First, I’ve been through this twice before. - [Fulfilling the Omnichannel Imperative](https://jeffharbaugh.com/fulfilling-the-omnichannel-imperative/) - On December 28th, Zumiez filed an 8-K with the SEC. I don’t think they were required to file it because the amount of money involved ($1.3 million in the 4th quarter) wasn’t really “significant” as defined by the SEC for a company the size of Zumiez. But they filed it anyway. How come? I’m sure - [An Artificially Intelligent Digital Commerce Platform](https://jeffharbaugh.com/an-artificially-intelligent-digital-commerce-platform/) - You’re probably going to read this if only to find out what that title means. We’re all going to find out together as the online shopping experience continues to evolve. The North Face has worked with a company called Fluid to develop an online shopping assistant powered by IBM’s Watson Cognitive Computing Technology (I say - [Skullcandy Revises its Forecast for the Quarter](https://jeffharbaugh.com/skullcandy-revises-its-forecast-for-the-quarter/) - A couple of days ago, Skullcandy decided that the prospects for its fourth quarter had changed enough that they needed to disclose it. They filed an 8K with the SEC to accomplish that. You might want to read the press release that’s part of it. Skull said it expects fourth quarter sales to be the - [A Brief Review of The Buckle’s Quarter](https://jeffharbaugh.com/a-brief-review-of-the-buckles-quarter/) - The Buckle didn’t say anything unusual or intriguing in its conference call or 10-Q. I guess that’s good. But at the moment, this is the last retailer I haven’t reported on, and it appeals to my sense of order to get it done before settling in for Christmas and the holidays. What we can learn - [Tilly’s Offers Us Some Thoughts on Retail Stores.](https://jeffharbaugh.com/tillys-offers-us-some-thoughts-on-retail-stores/) - It used to be way easier to grow a retail chain. You found a good location, made a deal with the landlord, made improvements, and brought in some inventory and some experienced management to train the new group of employees. If you did this mostly right, a year later (maybe sooner) you had a cash - [Where do They Go from Here? PacSun’s Quarter](https://jeffharbaugh.com/where-do-they-go-from-here-pacsuns-quarter/) - It’s my belief that PacSun CEO Gary Schoenfeld has mostly done the right things since he joined the company. But so far PacSun hasn’t been able to reclaim the competitive position in the market it used to have. Maybe, if this wasn’t a brutally competitive, over supplied, retail environment, things would be different. But they - [SPY Ceases to be a Public Company](https://jeffharbaugh.com/spy-ceases-to-be-a-public-company/) - SPY filed a form 15-12G with the Security and Exchange Commission on December 11th. The press release that accompanied the filing stated, “As a result of this filing, the Company ’ s obligations to file certain reports with the SEC, including annual, quarterly and current reports on Form 10-K, Form 10-Q and Form 8-K, respectively, - [Perspective from Zumiez’s Conference Call on the Retail Environment. Oh, and Their Results for the Quarter.](https://jeffharbaugh.com/perspective-from-zumiezs-conference-call-on-the-retail-environment-oh-and-their-results-for-the-quarter/) - As with most industry retailers, it’s not exactly a great time for Zumiez. Their October 31st quarterly numbers were disappointing. We’ll talk about those. But I want to spend most of this discussion on where, exactly, Zumiez’s is in the market and how CEO Rick Brooks describes and projects what’s happening in retail. The funny - [Abercrombie & Fitch's October 31 quarter; Will it Be Enough to Try the Same Things as Everybody Else?](https://jeffharbaugh.com/abercrombie-will-it-be-enough-to-try-the-same-things-as-everybody-else/) - A&F (owner of the Hollister brand) had a pretty good quarter. I’m thrilled that their sales fell a bit and want to start by reminding you why I’d think like that (though they tell us it was mostly caused by exchange rates). Here we sit over retailed as an industry and a country with a - [The Quiksilver Bankruptcy: Where Should We Be Focused?](https://jeffharbaugh.com/the-quiksilver-bankruptcy-where-should-we-be-focused/) - As we go through the process of watching Quiksilver try to resurrect itself what issues should have our attention? Certainly not the endless pages of bankruptcy court filings. Not even I’m reading all of those. The process will grind through to its conclusion. The secured creditors will come out more or less intact, the common - [Billabong Holds Its Annual Meeting; Progress and Headwinds](https://jeffharbaugh.com/billabong-holds-its-annual-meeting-progress-and-headwinds/) - At Billabong’s annual meeting a couple of days ago, CEO Neil Fiske and Global Billabong Brand Manager Shannan North made presentations describing the company’s progress and challenges since the results for the year ended June 30 were announced in July. Let’s see what they said. It’s only been four months since the year’s results were - [Sell the Experience, Not the Product: The Wavestorm Board](https://jeffharbaugh.com/sell-the-experience-not-the-product-the-wavestorm-board/) - I knew about this article on the Wavestorm $100 surfboard before it ever came out. In some ways, it’s old news. Less expensive surf boards of various constructions and materials have been popping up for years now, and the Wavestorm isn’t new. I guess the genie was out of the bottle around the time Clark - [Marketing and Positioning Matter. So Do Other Things. Skullcandy’s September 30 Quarter](https://jeffharbaugh.com/marketing-and-positioning-matter-so-do-other-things-skullcandys-september-30-quarter/) - The thing is, I really like Skullcandy’s marketing. There is some commonality of message and attitude among their sponsored people (notice I don’t just say team riders) even when those people come from very different places and perspectives. I like it is because while they have, for example, sponsored surfers the message isn’t just about - [More of the Same: Spy’s September 30 Quarter](https://jeffharbaugh.com/more-of-the-same-spys-september-30-quarter/) - I’m going to try and keep this pretty short. Nothing has really changed strategically. Spy is still in business only because its major shareholder has lent the company around $20 million. In terms of operations and expense management, they’ve done everything that I can see they can do. They tried to stake out a differentiable - [Kering Reports on Volcom and Electric, Kind Of](https://jeffharbaugh.com/kering-reports-on-volcom-and-electric-kind-of/) - Kering’s report for the quarter ended September 30 included almost no information on Volcom and Electric. No analysts asked questions about either brand, but that’s pretty standard. Historically, there’s been enough in the slides and prepared remarks that I can use some simple math to figure out things are going, but not this time. Here’s - [Not Much Happened But That’s Not So Bad; The Buckle’s Quarter](https://jeffharbaugh.com/not-much-happened-but-thats-not-so-bad-the-buckles-quarter/) - In the retail and economic environment we’ve got right now and given the results of some of its competitors it’s kind of hard to complain about a company that put 10% of revenue to the net income line in the quarter that ended August 1st. Revenues were pretty much the same as in last year’s - [Another Industry Turnaround Continues; Abercrombie & Fitch’s Quarter](https://jeffharbaugh.com/another-industry-turnaround-continues-abercrombie-fitchs-quarter/) - It was last December when A&F’s long time CEO was “resigned” by its board of directors. I posted a link last winter to an article about how that came to happen. Here’s that link. That’s not to say he had complete responsibility for what went wrong at A&F. But, as the article made clear, it’s - [PacSun’s August 1 Quarter; Expense Cuts and Debt Restructuring Doesn't Create Customers](https://jeffharbaugh.com/pacsuns-august-1-quarter-expense-cuts-and-debt-restructuring-doesnt-create-customers/) - For the quarter ended August 1, PacSun’s revenues fell 7.6% to $195.6 million from $211.7 million in the same quarter last year. Comparable store sales, including ecommerce, were down 6%. The gross margin fell from 29.1% to 25.8%. 1.1% of the gross margin decline was due to a decrease in their merchandise margin. 2.1% was - [Zumiez’s Quarterly Report and Retail Market Conditions](https://jeffharbaugh.com/zumiezs-quarterly-report-and-retail-market-conditions/) - By their standards, Zumiez didn’t have much of a quarter in the three months ended August 1. Revenue rose just 1.76% from $176.7 million in last year’s quarter to $179.8 million in this year’s. Net income fell from $7.46 to $3.21 million. Here what CEO Rick Brooks says happened. “For the second quarter and back-to-school - [Globe’s Results for the Year; Good, but What's Going on in North America?](https://jeffharbaugh.com/globes-results-for-the-year-good-but-whats-going-on-in-north-america/) - I’m kind of late writing about this, but Quiksilver inconveniently filed for bankruptcy right before I went on vacation and I was focused there. The headline is that Globe improved its performance. However, there isn’t much to analyze. Basically they tell us, “We did good and think we can do better.” Hope so. Anyway, here’s - [Quiksilver’s 10Q; Not Really a Surprise](https://jeffharbaugh.com/quiksilvers-10q-not-really-a-surprise/) - In the aftermath of Quik’s bankruptcy filing, the 10Q feels like an afterthought. Still, it’s worth a brief review. There was no conference call. Hell, what’s left to say? In the quarter ended July 31, revenues fell 11.1% to $336 million from $378 million in the same quarter last year. Gross margin didn’t do much - [Quiksilver's Bankruptcy Filing: And the Beat Goes On](https://jeffharbaugh.com/quiksilvers-bankruptcy-filing-and-the-beat-goes-on/) - As pretty much everybody knows, Quiksilver filed for Chapter 11 Bankruptcy on September 9th. This is another step in a long process that’s been going on for years now and that we’ve followed together on these pages and in other places. This will not be an explanation of bankruptcy or a discussion of why companies - [Article on Quiksilver Bankruptcy Filing](https://jeffharbaugh.com/article-on-quiksilver-bankruptcy-filing/) - A reader forwarded this article, published in Australia, to me. I thought it had some good information. I'm particularly intrigued by the short discussion about how Quiksilver and Billabong will or will not be combined or work together. Here's the link. - [Market Evolution; Things to Think About from Quik CEO Mooney and My Spin on Them](https://jeffharbaugh.com/market-evolution-things-to-think-about-from-quik-ceo-mooney-and-my-spin-on-them/) - I wrote about Quiksilver’s quarter maybe a month ago. In the conference call, CEO Andy Mooney had some really interesting things to say about how the market is changing. I set them aside to think about. I felt they were comments that were appropriate to a general discussion of market evolution, rather than the particulars of Quik’s situation, - [The Quiksilver Conundrum; There Has to be a Deal](https://jeffharbaugh.com/the-quiksilver-conundrum-there-has-to-be-a-deal/) - I’ve resisted writing this, but with the recent article in Bloomberg highlighted by Boardistan and Shop-Eat-Surf reporting, also based on a Bloomberg, that Quik had hired a restructuring firm, I guess there’s no reason not to. What I want to do is take you through Quik’s circumstances and choices based on their most recent balance - [Deckers June 30 Quarter and Some Perspective on Sanuk](https://jeffharbaugh.com/deckers-june-30-quarter-and-some-perspective-on-sanuk/) - It wasn’t a great quarter for Deckers, the owner of UGG and Teva as well as Sanuk, though let me start out by reminding you that seasonality means this is always Deckers’ worst quarter. Sales rose 1.1% from $211.5 to $213.8 million. The gross profit margin fell slightly from 41% to 40.5%. SG&A expenses rose - [SPY’s June 30 Quarter; Kind of More of the Same](https://jeffharbaugh.com/spys-june-30-quarter-kind-of-more-of-the-same/) - As usual, I’ll start off my discussion of SPY by saying how much I like the brand and how I think they’ve done most of the right things in terms of operations and brand positioning. But then I move on to the financials (the June 30 quarter in this case) and bemoan, as I have - [The Beat Goes On- Skullcandy’s Results for the June 30 Quarter](https://jeffharbaugh.com/the-beat-goes-on-skullcandys-results-for-the-june-30-quarter/) - Since right after he joined the company, Skull CEO Hoby Darling has been pushing the same five pillar strategic plan as the company works through its issues and out of turnaround mode. I’ve reviewed those five pillars every quarter since he presented them, and I think I’m done. You can go read one of my - [VF’s June 30 Quarter: Damn This Strong Dollar!](https://jeffharbaugh.com/vfs-june-30-quarter-damn-this-strong-dollar/) - VF reported a 4.62% revenue increase in the quarter that ended June 30 compared to the same quarter last year (prior calendar period- PCP). The increase was from $2.402 to $2.514 billion. As usual, we’ll focus on the Outdoor & Action Sports (OAS) segment, as that’s where most of the action seems to be. Below - [Volcom and Electric Results for the Quarter and Half Year](https://jeffharbaugh.com/volcom-and-electric-results-for-the-quarter-and-half-year/) - Let’s review. Volcom and Electric are in Kering’s sport and lifestyle (S&L) division which includes PUMA. In 2014, Kering had consolidated revenue of 10.038 billion Euros. The S&L division’s revenue was 3.245 billion Euros. Of that, PUMA was 2.99 billion Euros and “other brands” in S&L had revenue of 255 million Euro and operating profit - [What I Saw at Agenda](https://jeffharbaugh.com/what-i-saw-at-agenda/) - The first thing that happened when I walked in the door was I got lost. They’d reorganized a bit and it took me a minute to get oriented. My problem- not Agenda’s. When I saw they had finally opened up the Berrics and included it in the flow of the show I was happy and - [Reading Between the Lines: Zumiez’s May 2nd Quarter](https://jeffharbaugh.com/reading-between-the-lines-zumiezs-may-2nd-quarter/) - It seems a hard time to be retailer in our space- at least that’s my general perception as I pour through conference calls and SEC filings. It’s not that Zumiez had a bad quarter. Both sales and earnings rose. But it wasn’t up to their standards or what they expect, as they make clear. I’ll - [Quiksilver’s April 30 Quarter; Where is Sales Growth Going to Come From?](https://jeffharbaugh.com/quiksilvers-april-30-quarter-where-is-sales-growth-going-to-come-from/) - Quiksilver reported a loss of $37.6 million for the April 30 quarter compared to $60.9 million in last year’s quarter. Last year’s quarter included a loss of $23 million loss on discontinued operations. Ignoring that, the net losses are almost identical. Net revenue fell 16.1% from $397 to $333 million. The revenue results by operating - [Abercrombie & Fitch’s May 2nd Quarter: Another Turnaround in Progress](https://jeffharbaugh.com/abercrombie-fitchs-may-2nd-quarter-another-turnaround-in-progress/) - I guess what I’d like to do is start with the list from their 10-Q of where the company will be focusing their turnaround efforts. “• Putting the customer at the center of everything we do Defining a clear positioning for our brands in a rapidly changing and highly competitive marketplace Delivering a compelling and - [PacSun's Quarterly Results: More of the Same](https://jeffharbaugh.com/pacsuns-quarterly-results-more-of-the-same/) - There wasn’t that much to say in either the 10-Q for May 2nd or the conference call. Bottom line is we’re all kind of hanging out waiting to see if PacSun can get further traction with its strategy before the continuing losses take too big a toll on the balance sheet and some more dramatic - [Deckers' Annual Report: Can Niche Brands Become Global Lifestyle Brands?](https://jeffharbaugh.com/deckers-annual-report-can-niche-brands-become-global-lifestyle-brands/) - Deckers (owner of Sanuk) has gone and changed their year end from December 31st to March 31st. So the recently released 10K reports on the year that ended March 31st, 2015 compares it to the year ended December 31st, 2013 as well as reporting on the quarter that ended March 31st 2015. I’ll compare the - [The Surf Industry and Bob McKnight’s Conference Speech: Points of Contact](https://jeffharbaugh.com/the-surf-industry-and-bob-mcknights-conference-speech-points-of-contact/) - Most of you are probably aware that the Surf Industry Summit took place in Cabo starting about 10 days ago. The keynote speaker on the first night was Quiksilver founder and Chairman Bob McKnight. His speech was somewhat controversial. The text is available on Shop Eat, Surf, but only if you’re an Executive Member. I’m - [Quiksilver Director Resigns- and She Doesn’t Sound Happy.](https://jeffharbaugh.com/quiksilver-director-resigns-and-she-doesnt-sound-happy/) - Quik filed an 8K today announcing that a director, Elizabeth Dolan, had resigned from the board effective immediately. Here’s what she said in her resignation letter. Dear fellow Quiksilver Directors: It is with regret that I inform you that I am resigning from the Quiksilver board effective immediately. I joined this board with a strong - [Skullcandy’s March 31st Quarter; Confronting the New Retail Environment](https://jeffharbaugh.com/skullcandys-march-31st-quarter-confronting-the-new-retail-environment/) - I’ve been writing, talking and thinking a lot lately about the evolution of the retail market; about HOW YOU SELL STUFF TO PEOPLE and WHY THEY BUY IT. Skullcandy CEO Hoby Darling has a plan, and he sure talks pretty about how the company is making it happen. I recommend you read his opening statement - [SPY’s March 31 Quarter; Curious About the Inventory](https://jeffharbaugh.com/spys-march-31-quarter/) - I have admired SPY for the organizational, strategic positioning, and expense control changes they’ve implemented in the last couple of years. But there’s a limit to how far you can reduce expenses. After that, SPY has to find ways to increase sales or its gross margin to find a way out from under its $21.5 - [What it Takes to Succeed in Retail; Some Ideas from The Buckle’s 10-K](https://jeffharbaugh.com/what-it-takes-to-succeed-in-retail-some-ideas-from-the-buckles-10-k/) - The Buckle’s results for the year ended January 31st are certainly not news at this point, but I do think they have a few things to tell us about retail. There are some commonalities emerging among retailers in the active outdoor/fashion retailers that I want to highlight. The Buckle is a retailer I think does - [Volcom/Electric’s 2014 and First Quarter 2015 Results; Plus Some Interesting Market Data](https://jeffharbaugh.com/volcomelectrics-2014-and-first-quarter-2015-results-plus-some-interesting-market-data/) - Kering, as you know, owns Volcom and Electric. Because the two brands represent a very small piece of Kering’s annual revenue, we don’t get much information on them. But I’ll give you what we’ve got and I also want to point you to some market data Kering provides in one of its documents. Let’s start - [The Amer Sports Sale of Bonfire and Nikita](https://jeffharbaugh.com/the-amer-sports-sale-of-bonfire-and-nikita/) - I thought I’d wait until I commented because I was hoping for some more details from Amer Sports. I asked them, but all I got was the comment you’ve seen from their interim report published on April 23rd. “In March, Amer Sports divested Nikita and Bonfire brands to CRN Pte Ltd. The combined net sales - [Abercrombie & Fitch at the Beginning of a Restructuring. A Look at Their Results and Plans.](https://jeffharbaugh.com/abercrombie-fitch-at-the-beginning-of-a-restructuring-a-look-at-their-results-and-plans/) - Well, as you know, A&F is having some troubles. You may recall that they fired their long time CEO late last year and have retained seven new board of director members and two new brand presidents, all with significant retail experience. They are in the process of finding a new CEO. If you want to - [PacSun’s Results for the Year; The Good and the Bad](https://jeffharbaugh.com/pacsuns-results-for-the-year-the-good-and-the-bad/) - It’s always the same conversation around PacSun. They are doing a lot of things right, and you see progress in the income statement (though there’s still a net loss). But you worry about the turnaround advancing far enough and fast enough before liquidity becomes an issue. As usual, we’ll dive into the financials, but I - [Zumiez’s Annual Report and Their Approach to the Omni Channel](https://jeffharbaugh.com/zumiezs-annual-report-and-their-approach-to-the-omni-channel/) - Zumiez ended its fiscal year on January 31st with 603 stores; 550 in the U.S., 35 in Canada and 18 in Europe. How many stores do they expect to ultimately have? In the past, they’ve opined that 600 to 700 might be about the limit in the U.S. Obviously, they’ve got some head room in - [Changes at Quiksilver](https://jeffharbaugh.com/changes-at-quiksilver/) - I’m assuming you’ve all seen the Quiksilver press release. Andy Mooney “...is no longer with the company.” President Pierre Agnes, the President has been promoted to CEO. Bob McKnight has returned as Chairman of the Board and APAC region president Greg Healy is now President of Quik. Former CFO Richard Shields has resigned, but will - [Vail Figures Out How to Generate Summer Revenue During the Winter](https://jeffharbaugh.com/vail-figures-out-how-to-generate-summer-revenue-during-the-winter/) - It figures. Over the weekend I finished up a long article for SAM (Ski Area Management) on winter resorts generating summer revenue. I think it included some interesting approaches to the issue, but apparently I missed one. Today Vail Resorts announced that it’s acquiring Perisher Ski Resort in New South Wales, Australia. Here’s the link - [Quiksilver’s Quarter: Right for its Brands, Hard for a Public Company?](https://jeffharbaugh.com/quiksilvers-quarter-right-for-its-brands-hard-for-a-public-company/) - At the risk of sounding like a broken record….oh, damn, do I need to explain that outdated cultural reference? You see, back in the day when there was something called a record…never mind. Anyway, I’ve said this a lot. It can be hard to do the right thing for the brand and still meet the - [Skullcandy’s Quarter and Year: Good Results, Same Strategic Issues and Opportunities](https://jeffharbaugh.com/skullcandys-quarter-and-year-good-results-same-strategic-issues-and-opportunities/) - You recall that Skullcandy found itself in turnaround mode when it sold too much poor quality product in low priced distribution that wasn’t consistent with its preferred branding and market positioning. I suppose that happened when the newly public company tried to meet Wall Street growth expectations. CEO Hoby Darling came in and put a - [Globe’s Half Year; The Plan Seems to be Coming Together](https://jeffharbaugh.com/globes-half-year-the-plan-seems-to-be-coming-together/) - Back in 2002, Globe bought Kubic Marketing, the holding company for World Industries and Dwindle. It turned out that their timing couldn’t have been worse in terms of the skateboarding industry cycle. Just about the time they dug their way out of that glitch, the Great Recession hit and had the same kind of impact - [SPY’s Results for the Year and Some Thoughts on Their Market Position](https://jeffharbaugh.com/spys-results-for-the-year-and-some-thoughts-on-their-market-position/) - As I’ve written before, I have a lot of respect for how SPY has restructured and repositioned itself. There seems to be an alignment of their corporate culture and market positioning that not only has the potential to differentiate the brand (in their market), but to save money and increase the efficiency of the organization. - [Billabong Turns a Profit; But There’s More Work to Do](https://jeffharbaugh.com/billabong-turns-a-profit-but-theres-more-work-to-do/) - Wow, this is going to be way shorter than most of my previous Billabong articles. Where’s the drama, the kind of hard to get your head around accounting, the recapitalizations and explanations thereof, the endless list of “significant items” I always complain about? Gone. Mostly. Well, not all the significant items. Billabong is implementing their - [Kering's Annual Report and Some Thoughts on Volcom's Role.](https://jeffharbaugh.com/kerings-annual-report-and-some-thoughts-on-volcoms-role/) - Kering, the owner of Volcom and Electric, presented its annual results for 2014 last week and held the usual conference call. As regular readers know, I was impressed at the job Volcom did selling itself to Kering (then PPR) both in terms of the price they achieved and their timing. The deal happened almost four - [Deckers Has a Pretty Good Quarter. Sanuk, Not So Much.](https://jeffharbaugh.com/deckers-has-a-pretty-good-quarter-sanuk-not-so-much/) - The overall numbers for Deckers for the quarter look pretty good. But some of the comments left me a bit perplexed. Meanwhile, Sanuk is still not performing the way Deckers must have expected when they bought it. Overall Results In the quarter ended December 31, Deckers’ revenue rose 6.6% from $736 to $785 million. The - [Intrawest's Quarter; Business as Usual. Mostly In a Good Way](https://jeffharbaugh.com/intrawests-quarter-business-as-usual-mostly-in-a-good-way/) - You may recall that Intrawest got in an avalanche of unmanageable debt when the Great Recession took down the resort real estate market. They solved the problems of an unpayable interest bill by getting their primary debt holder to convert a big chunk of its debt to equity and taking Intrawest public. I wrote about - [Tradeshows, Millennials and Other Hopefully Related Topics](https://jeffharbaugh.com/tradeshows-millennials-and-other-hopefully-related-topics/) - SIA’s show in Denver last week was the third trade show I’ve been to this year (the only three I’ve been to, and that’s quite enough) where the millennial generation was discussed and analyzed and their importance acknowledged. You should know I was one of the people discussing them at a speech I made in - [Trade Shows, My Mother, and Generational Cycles; Ideas About Your Customer](https://jeffharbaugh.com/trade-shows-my-mother-and-generational-cycles-ideas-about-your-customer/) - Okay, I’m back from Agenda and Surf Expo. I feel bad I didn’t go to the Zumiez 100K event even though it’s not, exactly, a trade show. I’ll make it to Denver for SIA, but am not going to OR, though I should. They wanted me to pay to get in, but in the best - [Quiksilver’s 2014 Results; Still a Work in Progress. Work Faster.](https://jeffharbaugh.com/quiksilvers-2014-results-still-a-work-in-progress-work-faster/) - Quik filed their 10K last week, but the holidays kept me from any serious analysis until now. The best thing I heard in the conference call was CEO Andy Mooney saying, “The organizational restructuring of the company is now complete and the management team focused singularly on execution.” We’ve learned, as we’ve watched other industry - [Abercrombie & Fitch’s Quarter: Now You See Him, Now You Don’t](https://jeffharbaugh.com/abercrombie-fitchs-quarter-now-you-see-him-now-you-dont-3/) - When CEO Michael Jeffries is on the conference call on December 3rd, then “retires” on December 8th, you kind of figure out there are issues. The 10-Q can be viewed here. On page 24 you can read some of the details of his retirement, though not the reason for it. The recent financial performance of - [The Buckle’s November 1st Quarter; Little Financial Change](https://jeffharbaugh.com/the-buckles-november-1st-quarter-little-financial-change/) - For the quarter ended November 1, 2014, The Buckle’s revenues rose a little from $286.8 to $292.2 million. That’s a 1.9% increase over last year’s quarter. The gross profit margin fell a little from 44% in last year’s quarter to 43.7%. In dollars it went up a little from $126.2 to $127.8 million. Selling, General - [Net Income Down 17% But It’s All Part of the Plan? Tilly’s Quarter](https://jeffharbaugh.com/net-income-down-17-but-its-all-part-of-the-plan-tillys-quarter/) - In the quarter ended November 1, Tilly’s grew its sales 6.1% to $131.3 million compared to the same quarter last year. But net income fell 17% from $6.15 million in last year’s quarter to $5.11 million. Meanwhile, in the conference call, President and CEO Daniel Griesemer’s first statement about the result is as follows: “We’re - [A Long Term Plan; Zumiez’s Quarter](https://jeffharbaugh.com/a-long-term-plan-zumiezs-quarter/) - Well, Zumiez had a pretty good quarter. Net sales rose 11.6% to $213.3 million from $191.1 million in last year’s quarter. “The increase reflected the net addition of 54 stores…and a comparable sales increase of 3.7% for the three months ended November 1, 2014.” Those numbers include ecommerce sales, which rose 15.7% and represented 11.2% - [Press Releases from Altamont and Pete Fox on the Acquistion of Fox Head by Altamont](https://jeffharbaugh.com/press-releases-from-altamont-and-pete-fox-on-the-acquistion-of-fox-head-by-altamont/) - Here are the 2 presses releases from today on the deal. Altamont Capital Partners Leads Majority Recapitalization of Fox Head, Inc. Palo Alto, Calif., Dec. 10, 2014 – Altamont Capital Partners (Altamont) today announced it is leading a majority recapitalization of Fox Head, Inc. (Fox), the number one global motocross equipment, apparel and accessory brand. - [Altamont Capital Partners Acquires Fox Head](https://jeffharbaugh.com/altamont-capital-partners-acquires-fox-head/) - You may recall that back in September this article told us that Fox Head was for sale. Fox, as you know, sells action sports and motocross apparel and accessories. You probably also recall that former DC Shoes Global President Nick Adcock, who was on the board of directors at Fox, took over as CEO on - [Retail Positioning and PacSun’s Quarter](https://jeffharbaugh.com/retail-positioning-and-pacsuns-quarter/) - For the quarter ended November 2nd, PacSun reported its 11th straight quarter of positive comparative store sales growth. They grew sales 4.7% to $212.4 million compared to $202.8 million in the same quarter last year. $7.1 million came from the increase in comparable store sales. The gross profit margin rose from 25.2% to 26.7%. 1.1% - [The Elements of a Turnaround; Billabong’s Shareholder Meeting](https://jeffharbaugh.com/the-elements-of-a-turnaround-billabongs-shareholder-meeting/) - Billabong Chairman Ian Pollard and CEO Neil Fiske both spoke at the Billabong shareholder meeting on November 21. Billabong, like Skullcandy, is an acknowledged turnaround in process. Both are using the fact that the public markets designate them as such to approach their turnarounds in what I consider to be the right way. I would - [Deckers Turns in an Impressive Quarter (Except for Sanuk)](https://jeffharbaugh.com/deckers-turns-in-an-impressive-quarter-except-for-sanuk/) - Deckers, the owner of Sanuk, not to mention UGG and Teva, had a great quarter. Revenue rose 24.2% to $480.3 million from $386.7 million in last year’s quarter. The gross margin was up from 43.2% to 46.6%. The acquisition of their brand distributor in Germany and a decline in the cost of sheep skin had - [Hints of a New Business Model; Skullcandy’s Quarter](https://jeffharbaugh.com/hints-of-a-new-business-model-skullcandys-quarter/) - I love it when a plan starts to come together. Especially when it’s a plan I’ve endorsed and follows an approach I’ve been recommending for many companies since about 2008. As you know, I’ve been concerned that public companies have pressures on them to grow that make it hard to be brand builders because getting - [SPY’s September 30 Quarter: Not Bad](https://jeffharbaugh.com/spys-september-30-quarter-not-bad-2/) - Last time I wrote about SPY (see it here) in August, they had reported a quarter over quarter sales decline of 18.1% from $10 million to $8.2 million. They told us their largest retail sunglass customer had stopped carrying their brand in the quarter that ended June 30. But in that quarter’s 10Q they said - [Losing a Big Customer Sucks: SPY’s Quarter](https://jeffharbaugh.com/losing-a-big-customer-sucks-spys-quarter/) - Long time readers have been through the saga of Spy with me. But for the last couple of years, they’ve pretty much done things right. They’ve cleaned up inventory, managed expenses down, focused on a niche they can compete in, strengthened the management team, done some innovative product things, gotten out of products that weren’t working, and - [Portfolio Theory at Work at VF; Their Quarterly Results.](https://jeffharbaugh.com/portfolio-theory-at-work-at-vf-their-quarterly-results/) - VF’s 10Q for the quarter ended September showed another strong result. You can see the 10Q here. However, as with recent quarters, the good news was pretty much limited to their outdoor and action sport segment (OAS). I want to talk a bit about what that might mean, but first, let’s lay out the numbers. - [Quiksilver Gets a Letter from an Unhappy Investor](https://jeffharbaugh.com/quiksilver-gets-a-letter-from-an-unhappy-investor/) - A reader sent me an article I imagine most of you have already seen, though I haven’t seen it covered in industry media. It tells us that Ryan Drexler of Consac, an owner of 2 million Quiksilver shares, has sent a letter to Quik Chairman Bob McKnight and CEO Andy Mooney stating that the company’s - [Show Trends and the Business of Snowboarding; "It's Deja Vu All Over Again!"](https://jeffharbaugh.com/show-trends-and-the-business-of-snowboarding-its-deja-vu-all-over-again/) - In 1903, 57 companies were started to make cars. 32 left the business. I recently heard it on National Public Radio, so it must be true. Snowboarding, of course, is going to be different. In your dreams. They say that when you die, your finger nails and hair keep growing for about three weeks. In Las Vegas I - [SIA 1996; It’s Just Business](https://jeffharbaugh.com/sia-1996-its-just-business/) - Business. It was all business. Well, maybe not quite all. The ladies and gentlemen at Mervin Manufacturing were dressed in all white outfits (they claimed not to be angels) and Mike Olsen was shooting money out of a cannon at irregular intervals. But the snowboard side of this year’s SIA show in Las Vegas showed that - [Orders; I Got to Get Some Orders! The View From Las Vegas](https://jeffharbaugh.com/orders-i-got-to-get-some-orders-the-view-from-las-vegas/) - Many snowboard companies came to Las Vegas this year knowing in their heads it could be tough to get orders, but hoping in their hearts that oversupply in all product areas wouldn’t stifle retailers’ demand for new, branded product. There are prominent exceptions, but a month after the show, it looks like some heads were right - [I Feel a Whole Lot More Like I Do Now Than I Did a Little While Ago; My Take on ASR](https://jeffharbaugh.com/i-feel-a-whole-lot-more-like-i-do-now-than-i-did-a-little-while-ago-my-take-on-asr-2/) - I’m not entirely sure what the title of this article means, but I’m pretty certain it applies to the skateboard industry. Conditioned as I am by the snowboard industry consolidation, I went to ASR expecting to observe a similar process. Subjectively, it seemed like the show wasn’t quite so crowded, and things were more business like, but - [Reality Bites; The View from ASR](https://jeffharbaugh.com/reality-bites-the-view-from-asr/) - There was a keg at the IASC hospitality suite at ASR the first evening of the show, and I was drinking a beer with Miki Vuckovich of Transworld Skate and Jim Fitzpatrick of IASC. Into this fairly typical trade show experience walks the comedian Gallagher with his entourage of one. He sits down with his own beer - [Fat Lady Sings. K2 Buys Ride](https://jeffharbaugh.com/fat-lady-sings-k2-buys-ride/) - K2’s purchase of Ride, announced on July 22 and expected to close within 100 days, is as close as we’ll ever get to a capstone on consolidation. We all were intellectually aware of consolidation, but this makes you aware in your gut. Burton and K2 now control what I’d estimate to be 65 percent of the - [Chasing the Demographics; Pacific Sunware Focuses on Youth](https://jeffharbaugh.com/chasing-the-demographics-pacific-sunware-focuses-on-youth/) - There’s got a way to make this story exciting. Oh the injustice of making me write about a company with a strong balance sheet, growing revenue and earnings, no meaningful litigation, and an experienced management team with a clear strategic focus. I’ve got to stir up some drama somewhere if there’s to be any hope that people - [What I Learned at ASR: Products, Movies, Cooperation, Culture and Hype](https://jeffharbaugh.com/what-i-learned-at-asr-products-movies-cooperation-culture-and-hype/) - I spent three days walking and talking. I suffered through the usual distraction and traffic jam at the Reef booth (why is it that no matter which way you try and go, you end up there?). In no particular order, I noted the following things: No major new products Snowboarders trying to do skate tricks in - [After the Gold Rush; The Internet’s Role in the Surf Industry, One Year Later](https://jeffharbaugh.com/after-the-gold-rush-the-internets-role-in-the-surf-industry-one-year-later/) - Just about a year ago, I asked here in Surf Biz what it took to make money on the internet in the surf business. I said that if you were exclusively an etailer, and had to be both a merchant and journalist, it cost a lot of money just to operate, and you had the added - [Swell Raises $2 Million](https://jeffharbaugh.com/swell-raises-2-million/) - Almost as soon as my article on surf industry internet models was finished, Swell shut down its Crossrocket site and then, on May 3rd, announced it had raised $2 million in bridge financing. I hate it when that happens. Rather than just throw up a press release that created more questions than it answered (see it - [Can’t Live With Them, Can’t Live Without Them; Trade Shows, That Is](https://jeffharbaugh.com/cant-live-with-them-cant-live-without-them-trade-shows-that-is/) - It feels to me like more trade shows are being better produced at exactly the time when we don’t need them in quite the same way we use to. Or maybe there’s the same number of trade shows, but we don’t feel the need to go to as many. Or maybe retailers, who don’t make their living - [Another ASR. Anything to Learn](https://jeffharbaugh.com/another-asr-anything-to-learn/) - Lousy time for a deadline. What am I going to say about ASR that seems relevant when what’s left of the World Trade Center towers is still burning? The most talked about issue at ASR seemed to be conjecture about what was holding up the girls’ low riser pants, and it suddenly doesn’t seem so compelling. - [Well, I Guess It’s a Recession; Perspective on an Economic Downturn.](https://jeffharbaugh.com/well-i-guess-its-a-recession-perspective-on-an-economic-downturn/) - It has been a while—ten years actually—since we endured the lastr ecession back in ’90/91. But business cycles are pretty much immutable. What goes up must come down. “Regression to the mean” they call it in statistics. Two things have me especially concerned about our current situation. First, the economic rubber band is stretched - [Well, At Least It Can’t Be Any Worse Next Year; The Trade Show Schedule](https://jeffharbaugh.com/well-at-least-it-cant-be-any-worse-next-year-the-trade-show-schedule/) - The box on this page contains, as most of you are no doubt painfully aware, this year’s trade show schedule. Pretty intimidating. But of course it doesn’t include any key account presentations suppliers might have to make. Or regional shows. Or shoe shows, or bike shows, or toy shows or whatever other shows some suppliers and retailers might need - [Death By Purple Wrist Band; Reflections on The Surf Industry Conference](https://jeffharbaugh.com/death-by-purple-wrist-band-reflections-on-the-surf-industry-conference/) - I'm glad, I guess, that I’ve gotten to the age where I don’t feel completely compelled to take too much advantage of these “all inclusive, drink at much as you want of anything for free” conference packages. Because if I were so inclined, I suspect all the worrying going on at the conference might have driven - [Trade Shows Again, Kind of](https://jeffharbaugh.com/trade-shows-again-kind-of/) - Following Vegas, in the last issue for the season of TransWorld Snowboarding Business, I wrote about trade shows and the issues we have with them. To make a long article short, I basically said, “We’re screwed!” Lot of people agreed with that, which was hardly a surprise. But I was bothered all spring and into early summer - [Three Business Models That Might Work; Ideas From Vegas](https://jeffharbaugh.com/three-business-models-that-might-work-ideas-from-vegas/) - You might have thought I could have gotten around to this before now, but there were no more SnowBiz issues after Vegas, and I kind of forgot about this for a while. Sorry. As we’ve watched snowboarding evolve, we’ve noticed how closely products of different brands resemble each other. Differentiation is based largely on marketing and making - [Hype, Technology And Trade Shows; Not Enough of Some, too Much of the Other.](https://jeffharbaugh.com/hype-technology-and-trade-shows-not-enough-of-some-too-much-of-the-other/) - Slowing growth, or a decline in year over year sales if that’s what your company is experiencing, was inevitable in skateboarding. Sure, we would rather it didn’t happen. But since we all knew it was going to happen, it might as well be sooner rather than later so it’s less painful. What I didn’t see - [Hey! Look at All the Retailers! Good News From Vegas](https://jeffharbaugh.com/hey-look-at-all-the-retailers-good-news-from-vegas/) - Flying in from ASR in Long Beach, where the consensus was that the number of retailers was down significantly, it was a relief to get to the SIA show in Vegas and see the place jumping. It was simply the best show since some time in the mid 90s. Not just by energy level but, in my - [China, Small Brands, Inventory; Visions from Vegas](https://jeffharbaugh.com/china-small-brands-inventory-visions-from-vegas/) - Purposeful. In a word, that’s how I'd describe the show. There was the quiet hum of business being done and if the aisles weren’t as full as I’ve seen them in the past, and the noise level was somewhat subdued, it was because the booths were full of people focused on doing business. Sure, I miss the good - [Self Help for Core Retailers; The Coastline Model](https://jeffharbaugh.com/self-help-for-core-retailers-the-coastline-model/) - Hi, I'm back. This was just too interesting not to inflict myself on. And I imagine O’Brien couldn’t find anybody else willing to touch it. From the last issue of TransWorld Biz, you may remember that our hero, Sean Kennedy of New Zealand, had started a company called Coastline owned by, so far, 42 core surf shops - [Hard Truths about the Action Sports Business; Use Them to Make Lemonade from Lemons](https://jeffharbaugh.com/hard-truths-about-the-action-sports-business-use-them-to-make-lemonade-from-lemons/) - As I said in the last issue of Boardsport Source, the way companies choose to compete in the action sports industry and, I suppose, in most industries, is largely responsible for the maturing and consolidation of fast growth industries. Ask the skate and snow people. People way smarter than I have acknowledged that surf’s time will come. - [Volcom's Quarterly Conference Call: It Didn't Sound 29% Bad to Me](https://jeffharbaugh.com/volcoms-quarterly-conference-call-it-didnt-sound-29-bad-to-me/) - I’m just back from two years In Ireland, where I made a futile attempt to have one pint in every pub in Dublin. I’ve missed a bit, but I did hear about Volcom’s quarterly conference call last Friday, the 29.4% decline in its stock that followed, the industry discussion that has ensued about the - [PacSun's Quarter Ended 7/29/06; Numbers and Industry Implications](https://jeffharbaugh.com/pacsuns-quarter-ended-72906-numbers-and-industry-implications/) - I guess if you’re going to talk about a quarterly earnings release, you have to mention the numbers. Okay, fine. PacSun’s net income for the quarter ended July 29, 2006 was $0.14 a share compared to $0.28 a share for the same quarter the previous year. For the six months ended the same date, it was $0.30 a - [The Last Intrawest Annual Report: One Benefit of Being Bought](https://jeffharbaugh.com/the-last-intrawest-annual-report-one-benefit-of-being-bought/) - I’ve always admired Intrawest’s ability to combine and coordinate its real estate activities with the development and management of its mountain resorts. It always seemed like they managed to choreograph the two to maximize the value of both. That didn’t mean, however, that I looked forward to reading their annual Form 40-F filing with Security and Exchange - [Globe Annual Report and the Pacific Brands Deal](https://jeffharbaugh.com/globe-annual-report-and-the-pacific-brands-deal/) - Being traded on the Australian Stock Exchange, Globe doesn’t have to file the usual reports with the Securities and Exchange Commission here in the U.S. But they did file an annual report (109 pages, but happily for me full of pretty pictures and big type) and, in conjunction with the announcement of the pending sale of - [PacSun Quarter and 9 Months Ended 10/28/06- Good Tactics. What's the Strategy?](https://jeffharbaugh.com/pacsun-quarter-and-9-months-ended-102806-good-tactics-whats-the-strategy/) - Pacific Sunwear’s (NASDAQ: PSUN) official SEC filing isn’t out yet (I’m writing this November 26 because I love working Sundays), but I’ve read the press release, reviewed the associated financial statements for the quarter and nine months ended October 28, and listened to the conference call. Let’s look at the numbers first, and then - [Make Love, Not War; Blanks and the Park and Recreation Convention. What's a Skate Brand to Do?](https://jeffharbaugh.com/make-love-not-war-blanks-and-the-park-and-recreation-convention-whats-a-skate-brand-to-do/) - First time I’ve ever had two subtitles. That must be meaningful. Either I’ve been thinking a lot about this, or I’ve got nothing to say and am desperate to use up space. I suppose each reader will decide which it is. Not long after I read Cullen Poythress’s article “The War on Blanks” in the September issues of - [Zumiez's 10/31/06 Quarterly Report: Pretty Much Nothing But Good News](https://jeffharbaugh.com/zumiezs-103106-quarterly-report-pretty-much-nothing-but-good-news/) - Well hell, this is a lot more fun when there’s something negative or at least controversial to gossip about. All I’ve got to go on is the 10-Q for the quarter ended October 28th and things seem awful solid. No executives fired. Sales growing, margins holding up, no interesting litigation. You might as well go read another article. Net - [Billabong’s Half Year Results- 12/31/06; The Impact of Acquisitions](https://jeffharbaugh.com/billabongs-half-year-results-123106-the-impact-of-acquisitions/) - I love reading Billabong’s reports. No, wait, I hate it. Actually I’m hopelessly conflicted. On the one hand, being traded in Australia, they don’t have to comply with the U. S. Security and Exchange Commissions filing requirements. There’s less small print and less mind numbing and sometimes superfluous information. But there’s also less information in general. Still, though they are allowed - [K2's 2006 Annual Report](https://jeffharbaugh.com/k2s-2006-annual-report/) - For the longest time, I thought about K2 as a ski and snowboard company. But that’s ancient history. They call themselves a “premier branded consumer products company” and divide their business into four segments: Marine and Outdoors ($407.6-million in 2006 sales), Action Sports ($421.4-million), Team Sports ($383.4-million), and Apparel and Footwear ($182.3-million). That’s a bit - [Spy Optics' 3/31/07 Quarterly Report: Lemonade Out of Lemons](https://jeffharbaugh.com/spy-optics-33107-quarterly-report-lemonade-out-of-lemons/) - Until recently, it’s been kind of a tough road for Spy Optics (publically traded under the corporate name of Orange 21). Though sales grew from $22.3 million in 2002 to $42.4 million in 2006, profits of $911,000, $500,000, and $807,000 in 2002 through 2004 gave way to losses of $1.7 and $7.3 million respectively in 2005 - [Here’s a Chart Worth Seeing](https://jeffharbaugh.com/heres-a-chart-worth-seeing/) - After my post on SIMA’s 2008 retail study yesterday, I got curious about the percentage changes quarter over quarter it implied. The Media Highlights gave me total core sales for the year and the percentage of sales in each quarter. SIMA gave me the same information for 2006. The rest of the calculations are mine and I used - [Boardshorts from a Vending Machine](https://jeffharbaugh.com/boardshorts-from-a-vending-machine/) - If you read this http://www.nbcnewyork.com/blogs/the-thread/Swimsuit-Vending-Machines-to-be-Stocked-in-Hotel-52089002.html you’ll see that Quik has partnered with Standard Hotels to sell cobranded swim suits at boutiques and poolside vending machines for $75 a pair. I’m not writing this to express an opinion (though I’m usually not loathe to do that) but just to let you know it’s happening and to - [Volcom’s Quarter Ended June 30, 2009](https://jeffharbaugh.com/volcoms-quarter-ended-june-30/) - Volcom filed their 10Q in the last couple of days. There’s some good news here, though of course Volcom’s income statement for the quarter and six months reflects the impact of the recession. And the issue of how to manage their PacSun business is an interesting one. Let’s start with the balance sheet. The filing includes balance sheets - [Billabong’s Annual Report for Year Ended June 30, 2008](https://jeffharbaugh.com/billabongs-annual-report-for-year-ended-june-30-2008/) - I’m supposed to crunch a bunch of numbers when I do these things, but first I’d like to highlight Billabong’s Operating Principles from its Corporate Governance Statement. There are eight of them and they are: 1. Lay solid foundations for management and oversight. 2. Structure the board to add value. 3. Promote ethical and responsible decision - [A Tale of Two Surf Shops. Kind Of.](https://jeffharbaugh.com/a-tale-of-two-surf-shops-kind-of/) - I grew up spending all my summers on Long Beach Island, New Jersey. That’s where I learned to surf. And just before anybody makes the comment yes, the surf is generally lousy and for anything really good we have to pray for hurricanes and a change in the prevailing south winds. We still have a family beach - [Trade Shows. There Can Be Only One?](https://jeffharbaugh.com/trade-shows-there-can-be-only-one/) - So let me see if I understand this. At a time when economic conditions are leading us to fewer brands and fewer shops and consumers spending fewer bucks, and those brands and retailers that are left want to spend less money and send fewer people to trade shows, we have more trade shows. Will somebody please - [Zumiez’s Fireside Chat](https://jeffharbaugh.com/zumiezs-fireside-chat/) - Rick Brooks, Zumiez’s CEO and CFO Trevor Lang held a half hour question and answer session today at the Thomas Weisel Partners Consumer Conference in New York. Previously, Zumiez had announced on September 2nd that “…total net sales for the four-week period ended August 29, 2009 decreased 2.9% to $51.7 million, compared to $53.2 million for - [Volcom Quarter & Nine Months Ended 9/30/09](https://jeffharbaugh.com/volcom-quarter-nine-months-ended-93009/) - Volcom’s Quarter and Nine Months Ended September 30 Back on October 29th Volcom released a press release with its third quarter results and hosted a conference call on those results. Everybody read, and listened, and analyzed, and wrote stuff. On November 9th, with no press release, they filed their 10Q for the same time period. Nobody seems - [Spy Optics (Orange 21) Sept. 30 Quarter and 9 Month Results](https://jeffharbaugh.com/spy-optics-orange-21-sept-30-quarter-and-9-month-results/) - I always look forward to Orange 21’s filings. It’s just about the only chance we get to see the numbers from a smaller company in this industry, because there just aren’t many of this size that are public and required to show us their results. I also like them because since their change in management, when - [What Does the Skate Industry Want From Trade Shows? I Think I Know.](https://jeffharbaugh.com/what-does-the-skate-industry-want-from-trade-shows-i-think-i-know/) - Transworld is trying to get an on line discussion of this topic going, and that’s a good idea. So far, it hasn’t generated much discussion and that’s too bad. Maybe the problem is that they’ve asked the wrong question by focusing on the skate industry. If they’d just asked, “What does a company- any company in any industry- - [PacSun Oct. 31 Quarter Results: New Strategic Focus From New CEO](https://jeffharbaugh.com/pacsun-oct-31-quarter-results-new-strategic-focus-from-new-ceo/) - Okay, so I finally hold in my hand both the transcript of the conference call and the actual quarterly report filed with the Securities and Exchange Commission. I’ve read them and cogitated on their meaning and finally have a couple of things to say that maybe somebody besides me will find interesting. The most interesting stuff - [ASR and Crossroads Make a Deal; What a Surprise!](https://jeffharbaugh.com/asr-and-crossroads-make-a-deal-what-a-surprise/) - This is good news because it makes things easier for the retailers, which I may have said a time or two is what trade shows need to be about. Crossroads needed retailers, which ASR can help supply, and Jamie Thomas doesn’t want to have to manage the logistics that will be required if Crossroads grows. ASR needs - [Zumiez's Nov. 2009 Sales Results- A Couple of Comments](https://jeffharbaugh.com/zumiezs-nov-2009-sales-results-a-couple-of-comments-2/) - Yesterday, Zumiez reported that sales for the four week period ended November 28th, 2009 decreased 1.8% compared to the same period the previous year. For the same period, they reported that comparable store sales fell 8.5% compared to a decline of 15% in the same period the previous year. In the first place, I want - [Quiksilver’s Annual Report](https://jeffharbaugh.com/98/) - In the middle of December, when Quik came out with its quarterly and fiscal year results and held aconference call, I pretty much ignored it. I glanced at the release and read the conference call transcript, but I had no idea how to evaluate the results of a company that was highly leveraged without a - [Notes From the SIA Show in Vegas, Uh, I Mean Denver](https://jeffharbaugh.com/notes-from-the-sia-show-in-vegas-uh-i-mean-denver/) - The beer is a lot cheaper in Denver, assuming you don’t actually consider the beers they handed you at the gambling tables in Vegas to be free. The hotels are more expensive and getting to said hotels from the airport takes longer. Most of the people I talked with (by no means a scientific sample) would - [Billabong's Semi-Annual Report](https://jeffharbaugh.com/billabongs-semi-annual-report/) - Billabong released its numbers for the six month ended December 31, 2009 last week and held a conference call. Though clearly not immune to a tough economy, the company’s raising of capital to strengthen the balance sheet, long term focus on brand equity, willingness to lose some sales rather than become too promotional, realism as to - [Genesco’s Take on The Retail Business](https://jeffharbaugh.com/genescos-take-on-the-retail-business/) - Genesco, the owner of Journey’s, reported its results for the quarter and year ended January 10th in early March. A couple of days later they made an investor presentation that discussed these results. I’ll talk briefly about their numbers, but what really caught my attention was their discussion of the retail environment and their retail strategy. Genesco - [Zumiez’s 10K for Year Ended Jan. 30, 2010; The Strategy’s the Thing](https://jeffharbaugh.com/zumiezs-10k-for-year-ended-jan-30-2010-the-strategys-the-thing/) - In my analysis of Billabong and Genesco, I have spent some time talking about their retail strategies and the possible impact on the action sports retail market, especially on the core retailers. Zumiez’s 10K has me thinking about this again. I would first like to thank Zumiez for keeping their 10K to only 75 pages, - [Quik’s Quarter Ended Jan. 31, 2010; Great Tactics- What’s the Growth Strategy?](https://jeffharbaugh.com/quiks-quarter-ended-jan-31-2010-great-tactics-whats-the-growth-strategy/) - A sales decline of 2.4% for the quarter ended Jan. 31, 2010 compared to the same quarter the prior year, from $443.7 to $432.7 million isn’t what you’d like to see. Then you notice that their gross margin percentage rose from 46.7% to 51.3% and that their gross profit was up by 7.2% even with - [Vail 2nd Quarter Results- Watching Real Estate Will Be Interesting](https://jeffharbaugh.com/vail-2nd-quarter-results-watching-real-estate-will-be-interesting/) - Given that Vail says the snow up to about Christmas was the worst in 30 years, you have to say that they really did okay. But I think the most interesting thing in the whole 10Q was the disclosure that 13 holders of contracts to purchase Ritz-Carlton Residences had sued to get out of the contracts - [What Are Big Brands Doing in Retail? It's a Bit Scary](https://jeffharbaugh.com/what-are-big-brands-doing-in-retail-its-a-bit-scary/) - Below is the handout I distributed at IASC's Skateboard Industry Summit at the end of April where I talked about the evolving retail environment. These are quotes from recent fillings and conference calls by Billabong, Genesco (owners of Journeys), Nike and Zumiez about how they see the retail environment and their involvement in it. Except - [Orange 21's Results for Quarter Ended March 31](https://jeffharbaugh.com/orange-21s-results-for-quarter-ended-march-31/) - Orange 21 (Spy Optic) has been through a lot. The recession and resulting economic conditions were enough, I’m sure we’d all agree, for any company to deal with. But since CEO Stone Douglass came in, they’ve also settled a dispute with former CEO Mark Simo and No Fear, done a rights offering (they raise about $2.5 million - [Quik's Quarter Ended April 30, 2010- Sales Down, Profits Up.](https://jeffharbaugh.com/quiks-quarter-ended-april-30-2010-sales-down-profits-up/) - As usual, we’re dealing with the numbers in the June 3 press release and the comments in the conference call rather than the actual quarterly filing with the Security and Exchange Commission that’s full of details. That just drives me crazy, and I want to explain why and what I think the result is in this - [How's Volcom Doing? Their Quarterly Results](https://jeffharbaugh.com/hows-volcom-doing-their-quarterly-results/) - I swear I wrote as fast as I possibly could during the conference call and hope I got all the good stuff. The press release was pretty much lacking in detailed management discussion and there were no footnotes to the financial statements. I know probably nobody will care by the time the actual quarterly report is filed - [VF’s Quarter Ended June 30- Good Numbers, China, and Retail Strategy](https://jeffharbaugh.com/vfs-quarter-ended-june-30-good-numbers-china-and-retail-strategy/) - VF Corporation, the owner of Vans, Nautica, North Face, Reef and a whole lot of other brands released their results last week for the quarter ended June 30. They also held a conference call I listened to. They had a strong quarter and we’ll get to the numbers. Oh hell, let’s start with a summary - [Nike's Annual Report- A Few Interesting Facts](https://jeffharbaugh.com/nikes-annual-report-a-few-interesting-facts/) - Nike came out with their 10K annual report maybe 10 days ago. Because we’re in the habit of focusing on the press release and the conference call which happens much sooner, nobody seems to have paid any attention to this 145 page document. But never fear, I’m a glutton for punishment and there were a few interesting - [I Wonder if PacSun Might Carry Hard Goods; And What Would Zumiez Think?](https://jeffharbaugh.com/i-wonder-if-pacsun-might-carry-hard-goods-and-what-would-zumiez-think/) - Just for a moment, hypothetically, let’s think about PacSun’s turnaround strategy, whether it might make sense for them to start carrying hard goods, and how other companies might react. PacSun’s Strategy That PacSun is in the middle of a turnaround is hardly disputable, if only because their management has characterized it that way. And in my - [Orange 21's (Spy Optics) June 30 Quarter; What Doesn't Kill You Makes You Strong](https://jeffharbaugh.com/orange-21s-spy-optics-june-30-quarter-what-doesnt-kill-you-makes-you-strong/) - Orange 21 turned a profit of $408,000 in the quarter ended June 30 after losing $254,000 in the same quarter last year. For six months, a loss of $1.058 million was reduced to $529,000. For the quarter, they did it by increasing sales 4.5% and increasing their gross profit margin from 45.9% to 57.8%. And they did it - [Billabong's Annual Report; Why Their Retail Strategy is a Match to the Economic and Industry Environment](https://jeffharbaugh.com/billabongs-annual-report-why-their-retail-strategy-is-a-match-to-the-economic-and-industry-environment/) - Billabong’s annual report and associated documents released around it contain a wealth of information. Some of the questions asked by the analysts in the conference call, and the answers provided, were particularly interesting. But equally important, there are some insights into general market conditions, the evolution of the retail environment and issues with Chinese production. It’s a lot - [Zumiez's Quarter; Other Stuff is More Interesting than the Numbers](https://jeffharbaugh.com/zumiezs-quarter-other-stuff-is-more-interesting-than-the-numbers/) - The Numbers In the quarter ended July 31st, Zumiez showed some improvement over the same quarter last year. Sales grew 14.7% from $85.2 million to $97.7 million. Comparable store sales were up 9.3% and 24 new stores (net of closings) have been opened since August 1, 2009. “The increase in comparable stores sales was primarily driven - [Globe Makes a Profit. It's Good to Make a Profit, But There Are Some Unanswered Questions](https://jeffharbaugh.com/globe-makes-a-profit-its-good-to-make-a-profit-but-there-are-some-unanswered-questions/) - Initially, I was relieved. There was no conference call to listen to and try to take notes faster than they could talk. The press release was one page. The Appendix 4E was only 60 pages and the Investor Presentation power point didn’t really add anything to it. I thought I’d get off easy on this one. Turns out it’s - [Quiksilver's July 31st Quarter: Sales Down, But Profits Up and Balance Sheet Stronger](https://jeffharbaugh.com/quiksilvers-july-31st-quarter-sales-down-but-profits-up-and-balance-sheet-stronger/) - Quik is the poster child of a company that’s done what it needed to do following the twin blows of the Rossignol acquisition and the recession. As somebody who’s done a bit of turnaround work, I can tell you it’s no fun, for either management or employees, to be dealing with negative stuff month after month. Quik - [Nike's First Quarter; Strong. The Integration of Brand and Retail is Particularly Interesting](https://jeffharbaugh.com/nikes-first-quarter-strong-the-integration-of-brand-and-retail-is-particularly-interesting/) - Normally, I prefer to wait for the actual quarterly filing to be available before doing this kind of analysis, but I trust you can all appreciate what a monumental waste of time it would be to really dig into Nike’s balance sheet. They’ve got $4.7 billion in cash and short term investments and $9.7 billion in - [An Insider's History of the Surf Industry; Good Reading!](https://jeffharbaugh.com/an-insiders-history-of-the-surf-industry-good-reading/) - Part of my weekend was spent reading Phil Jarratt’s excellent book, Salts and Suits; How a bunch of surf bums created a multi-billion dollar industry…and almost lost it. Phil has worked in surf publishing and the surf industry for more than 35 years, including five years as the head of marketing in Europe for Quiksilver. He seems - [Vail's Annual Report; What's the Future of Resort Real Estate?](https://jeffharbaugh.com/vails-annual-report-whats-the-future-of-resort-real-estate-2/) - This 10K was filed a couple of weeks ago for the year ended July 31. There are about 760 ski areas in North America. Vail owns five major ones that accounted for 7.7% of skier visits (about six million) during the last season. We don’t get many chances to see individual data from many of them, so taking - [Action Sports Market Evolution as Reflected in VF's Quarterly Results](https://jeffharbaugh.com/action-sports-market-evolution-as-reflected-in-vfs-quarterly-results/) - VF released its earnings and held the quarterly conference call yesterday at 8:30 Eastern time. I’m not quite dedicated enough to listen to it at 5:30 AM on the West coast, but I did listen to the replay later in the morning. You can see the press release here. Remember, we don’t have the SEC filing on the - [Billabong's Annual General Meeting](https://jeffharbaugh.com/billabongs-annual-general-meeting/) - On October 26th, Billabong Chairman Ted Kunkel and CEO Derek O'Neill made speeches at the company's annual meeting. Together they only run to to seven pages of big, easy to read, type. You should read them, and you can read them here. There's a lot of good, succinct information on why fiscal 2011 is a - [The End of an Era (In a Good Way!) at Quiksilver](https://jeffharbaugh.com/the-end-of-an-era-in-a-good-way-at-quiksilver/) - I don’t think anybody else noticed this (or at least I didn’t see anybody else mention it) but on October 27th, Quik got a $20 million term loan from Bank of America. Along with some cash on hand, they used it to pay off the last $24.5 million (including accrued interest) of their original term loan - [Requiem for the ASR Show. Now What?](https://jeffharbaugh.com/requiem-for-the-asr-show-now-what-2/) - At the moment you hear about it, it’s kind of a surprise. But when the initial shock passes, it’s not. I thought The Editors over at Boardistan put it best. Back in 2009, referring to ASR, they said; “We have to wonder what happens to the entire trade show business model when they have to pay retailers to - [Volcom's Quarter Ended Sept. 30 and Some Strategic Industry Issues](https://jeffharbaugh.com/volcoms-quarter-ended-sept-30-and-some-strategic-industry-issues/) - Those of you who read my stuff know I never try to be the first published. When Volcom did their press release I reviewed it. I listened to the conference call and read its transcript and thought about it. Then I reviewed their 10Q when it was finally released. Then I thought about it some more. Now, I’ve thought - [Making Changes in a Difficult Market; Orange 21’s Sept. 30 Quarter and Nine Months](https://jeffharbaugh.com/making-changes-in-a-difficult-market-orange-21s-sept-30-quarter-and-nine-months/) - Orange 21 (Spy Optic) is one of my favorite brands for a couple of reasons. First, over the last couple of years they’ve worked themselves through some really tough issues, making difficult decisions when required. And they’ve had to do it during the recession. Second, for better or worse they’re public. We get to see the numbers, actions, and - [Zumiez’s October 30 Quarter and Its Position in the Market](https://jeffharbaugh.com/zumiezs-october-30-quarter-and-its-position-in-the-market/) - This shouldn’t take long. The balance sheet has more cash than a year ago, no long term debt, and is solid. The inventory increase of 8.8% since a year ago is a lot less than the 20% sales increase for the quarter (but remember that inventory is at cost and revenue at retail price). Zumiez indicated in the - [What's Up with Quiksilver? The Stock Was up Huge Today](https://jeffharbaugh.com/whats-up-with-quiksilver-the-stock-was-up-huge-today/) - Quiksilver’s stock jumped 22.7% today (December 9th) from 4.75 to 5.68 on the biggest volume since last March. These kinds of moves don’t happen in a vacuum, so I thought I’d check around a bit. An investment banker I know was kind enough to alert me, and I found the following reported on Bloomberg: “PPR SA has - [PacSun’s October 30 Quarter; Big Changes Take Time](https://jeffharbaugh.com/pacsuns-october-30-quarter-big-changes-take-time/) - PacSun released their earnings and had a conference call on November 22nd. So why am I just getting around to writing about it? It’s because they didn’t file their 10Q until December 9th. I’m funny like that- I like to have the most complete information I can before doing much analysis. What I was hoping for, but not - [Billabong’s Announcement and the Industry Strategic Issues Underlying It.](https://jeffharbaugh.com/billabongs-announcement-and-the-industry-strategic-issues-underlying-it/) - On December 15th, Billabong revised its projected results for the six months ending December 31, 2010. Here’s what they said: “The Company’s previous guidance….indicated net profit after tax (NPAT) for the first half year ended December 31 2010 would be slightly lower than the prior year in constant currency terms. The Company now anticipates that first half - [Quiksilver’s Focus Goes From Balance Sheet to Income Statement; Their Quarterly and Annual Results](https://jeffharbaugh.com/quiksilvers-focus-goes-from-balance-sheet-to-income-statement-their-quarterly-and-annual-results/) - Quiksilver continued to improve its balance sheet over the year and quarter, and this conference call is the first in a while where I’ve gotten a sense of where some growth might really come from. We’ll talk about that. But first, I thought some of you might actually want to know how much Quiksilver earned for - [Accidental Encounters with Two Magazines and Market Evolution](https://jeffharbaugh.com/accidental-encounters-with-two-magazines-and-market-evolution/) - The other day I was reading Vanity Fair. That’s a little weird. But my wife gets it, and one of the highlighted cover stories was “Surfing the World’s Giant Waves.” I enjoyed it and learned a little more about surfing history. Still, I was a bit surprised to find the story there. The mag was full of high end fashion - [Quiksilver Files Its 10-K for the Year](https://jeffharbaugh.com/quiksilver-files-its-10-k-for-the-year/) - Last week, Quik filed its’ annual 10-K report with the SEC covering the quarter and year ended October 31, 2010. They announced their earnings by press release and held a conference call back in December. I’m not going to reanalyze their financials. I did that last month and you can read it here. But the north of 100 pages - [Billabong’s Half Yearly Report; A Consistent Strategic Approach](https://jeffharbaugh.com/billabongs-half-yearly-report-a-consistent-strategic-approach/) - Billabong management told us at least six months ago that 2011 would be a “transition year” and it is. But the strategy they started to tell us about a few years ago remains intact and they continue to pursue it. As I’ve written before, I generally agree with that strategy and my experience is that companies that - [A Couple of Things to Think About from VF Industries](https://jeffharbaugh.com/a-couple-of-things-to-think-about-from-vf-industries/) - With a different company I’d probably do what I usually do; get down and dirty in the financial statements. Some of you like that. Some hit the delete key early in the article. A few tell me they fall asleep. VF released its results for the quarter and year ended December 31, 2010 the week before last. I spent - [Thoughts on a Longboard Trade Show](https://jeffharbaugh.com/thoughts-on-a-longboard-trade-show/) - Concrete Wave sent out a press release February 21 announcing the first longboard tradeshow in New York City on March 11. I didn’t think about it much at first, but as some time passed, a few questions occurred to me. The first was, “Why does longboarding need its own trade show?” Maybe it doesn’t need it, but - [Billabong Purchase of West 49 and Implications for the Industry- Questions, Questions, Questions](https://jeffharbaugh.com/billabong-purchase-of-west-49-and-implications-for-the-industry-questions-questions-questions/) - Billabong’s acquisition of West 49 was the biggest retail expansion by a brand so far. We’ll see more brands buying more retailers and opening more stores. This article is about why. What are the motivations and the industry impacts? And what are some of the conflicts and contradictions companies will face as they pursue this strategy? Some of this is - [Jarden Corporation; Remember Them?](https://jeffharbaugh.com/jarden-corporation-remember-them/) - Whenever VF comes out with its earnings, we all gather around to see if we can find anything about how Vans and Reef are doing. But when Jarden, who owns a winter lineup of brands that includes Atlas, Full Tilt, K2, Ride, Line, Little Bear, Madshus, Marker, Morrow, Tubbs, Volkl and 5150, we don’t even notice. Wonder - [Some Comments on Quiksilver’s Quarterly Report](https://jeffharbaugh.com/some-comments-on-quiksilvers-quarterly-report/) - Quik came out with its quarterly results last week and filed the 10Q with SEC all at the same time so I’ve got that and the conference call to work with. I know Volcom and Zumiez have also released their results for the quarter and year, but so far they haven’t filed their 10Ks for me - [Billabong Reduces Guidance Due to Japanese Disaster.](https://jeffharbaugh.com/billabong-reduces-guidance-due-to-japanese-disaster/) - Billabong announced yesterday that its Net Profit after Taxes in constant currency would be lower this fiscal year than last year by 2% to 6% due to the problems in Japan. Previously, as announced on February 18, they had expected it to be flat. The announcement describes their position in Japan and the disaster’s impact on it. Happily, - [What a Specialty Retailer Might Learn From Genesco](https://jeffharbaugh.com/what-a-specialty-retailer-might-learn-from-genesco/) - I’m not really that interested in doing a full analysis of Genesco. Mostly because I doubt you’re that interested in reading it. But Journeys, owned by Genesco is 813 stores and the Journeys group of stores is over 1,000 in the U.S. and Canada so we can hardly not pay attention to what they’re up to. For - [Volcom’s Numbers and Opportunities for Growth](https://jeffharbaugh.com/volcoms-numbers-and-opportunities-for-growth/) - What I’ve admired about Volcom is its consistent approach to the market over most of the life of the company. You get rewarded for that consistent approach with a strong market position and brand awareness among your target customer group. Reef did the same thing with a similar result over many years. But there comes a time, - [Zumiez’s Quarter and Full Year Results: It’s All About the Strategy and the Economy](https://jeffharbaugh.com/zumiez-quarter-and-full-year-results-its-all-about-the-strategy-and-the-economy/) - Can a quality strategy consistently pursued over many years and offering a meaningful competitive advantage overcome the impact of cost increases, a weak economy and still cautious consumers? That pretty much sums up Zumiez’s 10K and conference call. The cost increases and weak economy are, of course, issues for all companies. If you’ve never done it, it’s - [A Perspective on Zumiez Accounting Treatments as Reported by Forbes](https://jeffharbaugh.com/a-perspective-on-zumiez-accounting-treatments-as-reported-by-forbes/) - An article in Forbes called “Great Speculations” had the subtitle “Accounting Smells a Little Fishy Down at the Zumiez Surf Shop.” It calls into question Zumiez’s reported earnings and balance sheet strength due to a couple of their accounting practices. Boardistan called our attention to it and concluded, “Apparently, Zumiez is shifting over to the “whatever - [PacSun’s Annual Report: Missions, Strategies, Prospects](https://jeffharbaugh.com/pacsuns-annual-report-missions-strategies-prospects/) - PacSun rode the economic expansion to 950 plus mostly mall based stores (they were down to 852 at the end of the year). They got over extended, had systems that didn’t give them the ability to merchandise as they needed to, didn’t keep their stores updated, became too dependent on their own brands, and basically lost - [Orange 21 Year End Results and Management Restructuring](https://jeffharbaugh.com/orange-21-year-end-results-and-management-restructuring/) - I unexpectedly had to spend about 10 days back east on family issues. Everything turned out fine, but I got way, way behind on my analysis. But sometimes things work out, and Orange 21’s management changes of last week gave me the perfect opportunity to tie those changes to their financial results and write a way more - [Skullcandy’s IPO; What’s New?](https://jeffharbaugh.com/skullcandys-ipo-whats-new/) - I guess it was around the time of the SIA show in Denver that Skullcandy announced they were going to do an initial public offering. They came out with the draft of the prospectus, and I took a pretty detailed look at it. Typically, the “quiet period” after you file with the SEC lasts 40 to - [Volcom’s March 31 Quarter and Some Related Thoughts on the PPR Deal](https://jeffharbaugh.com/volcoms-march-31-quarter-and-some-related-thoughts-on-the-ppr-deal/) - We’re probably down to the last one or two quarterly filings we’re going to see from Volcom as all filings will cease when the PPR acquisition of Volcom closes. There was no conference call this quarter because of the impending deal, so all I’ve got to work with is the 10Q. Total revenue was up 12.6% - [Skullcandy Files Another Amendment to Its S1](https://jeffharbaugh.com/skullcandy-files-another-amendment-to-its-s1/) - Skull filed another amendment to its S1 on May 11. You can see it here. I confess that I have not compared both documents side by side and word for word to discover differences. I can tell you that the newly amended S1 has pretty pictures in it at both the beginning and the end which will be - [Zumiez’s Quarter: Good Result, Same Concerns Everybody Else Has](https://jeffharbaugh.com/zumiezs-quarter-good-result-same-concerns-everybody-else-has/) - Zumiez filed its 10Q yesterday for the quarter ended April 30. It was a pretty good quarter compared to the same quarter the previous year. Sales were up almost 19% to $106 million on a comparable store sales increase of 12.6%. The number of comparable store transactions increased but dollars per transaction fell. They also opened a net of - [Sanuk Gets Bought, Who’s Deckers Anyway, Analysis of the Deal, Broader Industry Implications, and Related Ramblings](https://jeffharbaugh.com/sanuk-gets-bought-whos-decker-anyway-analysis-of-the-deal-broader-industry-implications-and-various-other-ramblings/) - Three times sales?!?! They sold a $43 million company for $120 million cash plus an earn out?!?! Not in the middle of snowboard industry lunacy in the mid 90s did a company go for three times sales. Okay, there are three possibilities. First, the team at Sanuk (here's the website link) is a bunch of silver tongued negotiating devils. Second, - [Skullcandy’s Latest Filing for its IPO](https://jeffharbaugh.com/skullcandys-latest-filing-for-its-ipo/) - On June 1st, Skullcandy filed a third amendment to the registration statement for its initial public offering. Once again, I haven’t compared the documents word for word to spot every change. The addition I want to bring to your attention is the inclusion of financial statements for the quarter ended March 31, 2011. Here are the summary financial - [Orange 21’s (Spy Optic) March 31 Quarterly Results; Additional Financing Required.](https://jeffharbaugh.com/orange-21s-spy-optic-march-31-quarterly-results-additional-financing-required/) - Really, not that much has changed at Orange 21 since I wrote about their annual report and management restructuring back in April. But its quarterly 10Q “…anticipates that it will need additional capital during the second quarter of 2011 and in subsequent periods to support its planned operations in 2011, and intends to raise cash through - [A Little More Information on Volcom’s Sale to PPR](https://jeffharbaugh.com/a-little-more-information-on-volcoms-sale-to-ppr/) - Often when a deal happens, all you know for sure is what’s in the press release. Typically that press release doesn’t offer a completely objective perspective about the process and motivations that lead to a deal. But if it’s a public company, and you’re willing to dig into mounds of fine print, sometimes you can find out - [PacSun’s April 30 Quarter; How Long for the Strategy to Get Traction?](https://jeffharbaugh.com/pacsuns-april-30-quarter-how-long-for-the-strategy-to-get-traction/) - While CEO at Pacific Sunwear, Sally Frame Kasaks took some appropriate tactical actions. The problem, I conjectured at the time, was that she just didn’t “get it” when it came to the youth culture market/action sports market. Gary Schoenfeld, when he became CEO, knew that PacSun’s success ultimately depended on its ability to reconnect with its core - [Quiksilver’s April 30 Quarter; There Are Some Numbers that Need Explaining](https://jeffharbaugh.com/quiksilvers-april-30-quarter-there-are-some-numbers-that-need-explaining/) - Quik’s revenues for the quarter rose 2.1% to $478 million compared to $468.3 million in the same quarter last year. The gross profit margin rose from 53.2% to 54.8%. Sales, general and administrative expenses were up slightly, but fell as a percentage of sales. Interest expense was down as a result of their balance sheet restructuring from $21 - [Tilly’s is Going Public- A First Look at Their Registration Statement (S-1)](https://jeffharbaugh.com/tillys-is-going-public-a-first-look-at-their-registration-statement-s-1/) - Tilly’s started in 1982 with a single store in Orange County, California. The company name is World of Jeans & Tops, but it does business as Tilly’s. It was founded by Hezy Shaked and Tilly Levine. As of April 30 2011, they had 126 stores in 11 states averaging 7,800 square feet each. They filed last week for their - [Skullcandy: The IPO is Moving Forward](https://jeffharbaugh.com/skullcandy-the-ipo-is-moving-forward/) - Skullcandy filed another amendment to their S-1 today with many of the blank spaces from the previous iterations of it filled in as the next step in their initial public offering. It appears they postponed it due a rough patch in the market. Smart. They list the maximum offering price as $19 a share. They are - [Dick’s Sporting Goods; Insights into the Development of the Action Sports Retail Environment](https://jeffharbaugh.com/dicks-sporting-goods-insights-into-the-development-of-the-action-sports-retail-environment/) - Never thought I’d be looking to Dick’s for that. Dick’s, which has been around since 1948, had revenue of $4.9 billion in 2010 from 525 stores. The 444 Dick’s stores are around 50,000 square feet each though there are some two level ones that go up to 75,000 square feet. The 81 Golf Galaxy stores are between 13,000 - [Trade Shows Re Re Re Re Re Visited; I Got an Idea. A Couple Actually. Hope One is Good.](https://jeffharbaugh.com/trade-shows-re-re-re-re-re-visited-i-got-an-idea-a-couple-actually-hope-one-is-good/) - Since ASR closed, and before that actually, we (well, me at least) have been struggling to figure out the role of trade shows as the economy, technology, and the industry changed. How do you get retailers to attend shows (paying them isn’t a good long term strategy)? Should consumers be involved somehow? What sports and products should be - [Orange 21 Revises Its Mary J. Blige Licensing Deal; It Will Terminate Early](https://jeffharbaugh.com/orange-21-revises-its-deal-with-mary-j-blige/) - On July 18, Orange 21 (Spy Optic) amended its licensing agreement with Rose Colored Glasses (Mary J. Blige’s company). The amendment provides “…for an earlier expiration of the Company’s license to sell Mary J. Blige (“MJB”) branded sunglasses (the “License”) on March 31, 2012.” For this, they paid Rose Colored Glasses $1,000,000 at signing and issued a - [The Agenda Trade Show, U. S. Open, and Other Trade Show Comments](https://jeffharbaugh.com/the-agenda-trade-show-u-s-open-and-other-trade-show-comments/) - As I walked around the Agenda Trade Show last week, I saw a lot of people sitting across tables from each other in the booths obviously doing business. That is the definition of a successful trade show. The sample of company executives I talked too seemed to confirm that. People were surprised by the number of buyers. - [VF’s June 30 Quarter Results; Pretty Impressive](https://jeffharbaugh.com/vfs-june-30-quarter-results-pretty-impressive/) - VF released its earnings and had its conference call back on July 21, but the 10Q was only released August 10th. The results, as you probably already heard, were good. Revenue for the quarter was up 15.4% to $1.8 billion and net income rose 16.2% to $130 million. They accomplished this with a gross margin that fell - [Skullcandy Licensing Agreement with Sonomax](https://jeffharbaugh.com/skullcandy-licensing-agreement-with-sonomax/) - Don’t know how many of you saw this (I missed it for a while), but back in June, Skullcandy signed a licensing agreement with Sonomax to use its technology in Skullcandy’s headphones. Here’s the press release on the agreement and some information on Sonomax. The direct to consumer web site for Sonomax product is here. As far as - [Orange 21’s Quarter. Sales Improvement, But More Ongoing Cash Needs](https://jeffharbaugh.com/orange-21s-quarter-sales-improvement-but-more-ongoing-cash-needs/) - As you know, I tend to hate proforma financial statements, but once in a while they make sense. Orange’s quarter ended June 30 is one of those times. They sold their factory in Italy (LEM) on December 31, 2010. The June 30, 2010 quarter contains sales and expenses associated with LEM. The June 30, 2011 quarter does not. Happily, - [Globe’s Annual Report; Making a Profit Under Tough Conditions](https://jeffharbaugh.com/globes-annual-report-making-a-profit-under-tough-conditions/) - Globe’s annual report for the year ended June 30 showed up on their web site a couple of days ago. It doesn’t contain much in the way of a detailed analysis of results, but I’ll give you what’s there. All the numbers are in Australian dollars. You can read it yourself if you want to. As - [Billabong’s Annual Report; The Relationship between Strategy and Operating Environment](https://jeffharbaugh.com/billabongs-annual-report-the-relationship-between-strategy-and-operating-environment/) - Billabong’s annual documents (which you can see here and here) provides us with a superlative opportunity to look at the nexus of a company’s strategy and its operating environment. The conference call transcript was also worth reading, but it seems to have disappeared from their web site. I can send anybody who wants it a copy. Of - [PacSun’s Quarter. Can the Strategy Work in this Economy?](https://jeffharbaugh.com/pacsuns-quarter-can-the-strategy-work-in-this-economy/) - PacSun’s 10Q was filed two days ago. I’ve been through it and it offers a few tidbits of interesting information. But mostly, PacSun CEO Gary Schoenfeld said a lot of what needs to be said, at least strategically, in the conference call. Here are his most relevant comments: “The economy is not getting better and competition remains fierce - [Zumiez’s Quarterly Results; Their Computer Systems are a Competitive Advantage](https://jeffharbaugh.com/zumiezs-quarterly-results-their-computer-systems-are-a-competitive-advantage/) - From a financial statement analysis point of view, this is kind of boring. The balance sheet is solid enough that I’ll pay it the ultimate compliment of not discussing it. No bank debt, and the inventory was more or less constant on a per square foot basis. In the conference call, one of the analysts even wanted - [Quik Grows its Sales and Profits; I Thought I Heard a New Attitude](https://jeffharbaugh.com/quik-grows-its-sales-and-profits-i-thought-i-heard-a-new-attitude/) - At the start of the quarterly conference call, Quiksilver founder and CEO Bob McKnight always makes a short speech highlighting the good things that are going on. After Rossignol, and through the balance sheet restructuring, they felt a bit like pep talks. He would highlight in a pretty nonspecific ways some things that were going well, and - [Zumiez’s October 29 Quarter; Consistently Pursuing a Solid Strategy](https://jeffharbaugh.com/zumiezs-october-29-quarter-consistently-pursuing-a-solid-strategy/) - I know I’ve written about it before, but let’s review the pillars of Zumiez’s strategy as I see them before we get to the numbers. Here’s the link to the 10Q if you’re interested. Find and retain employees who are actively committed to the action sports lifestyle and make sure they are customer service focused. I suspect - [The New LAUNCH LA Trade Show; I Wondered When This Was Going to Happen](https://jeffharbaugh.com/the-new-launch-la-trade-show-i-wondered-when-this-was-going-to-happen/) - Well, what a long strange trip it’s been. It was just about a year ago that the demise of ASR was officially announced. Since then, as the trade show environment has evolved and people have worked to figure out how to adapt, I’ve written a few times about trade shows. Here, here, here, here, here, here, and - [Billabong Has a Meeting](https://jeffharbaugh.com/billabong-has-a-meeting/) - Billabong held its annual shareholders meeting October 25th. Chairman Ted Kunkel and CEO Derek O’Neill made short speeches you can read here that contained a few pieces of interesting information. Looking over the longer term, however, I am more interested in an issue they discussed and acknowledged as being important, but didn’t really get into at - [Jarden’s September 30 Quarter And the K2 Rolling Stones’ Limited Edition Ski Collection](https://jeffharbaugh.com/jardens-september-30-quarter-and-the-k2-rolling-stones-limited-edition-ski-collection/) - As you know, Jarden is a big, multi brand company that did $6 billion in its last complete year. They’ve got over 100 brands including Crock Pot, First Alert, Coleman, and Mr. Coffee. They also own K2, Ride, 5150, Planet Earth, and Volkl and that’s pretty much why we are interested in the company, though I think - [Skullcandy’s Strong Quarter; It’s Amazing What an IPO Can Do for Your Balance Sheet](https://jeffharbaugh.com/skullcandys-strong-quarter-its-amazing-what-an-ipo-can-do-for-your-balance-sheet/) - My favorite footnote in Skullcandy’s 10Q for the quarter ended September 30 is footnote nine and specifically the table on long term debt (Yes, I know it’s kind of sad that I have favorite footnotes). It shows no long term debt at the quarter’s end compared to $73.4 million on December 31, 2010. They raised $77.5 million - [VF’s Quarterly Result; Why is it We Bother?](https://jeffharbaugh.com/vfs-quarterly-result-why-is-it-we-bother/) - We review VF’s results because they own brands we are interested in. Same reason we review Jarden’s, PPR’s and other companies. But we rarely get much information on those brands because they are part of a larger segment by which the corporations represents its business. And, in the case of VF, we get literally nothing on Reef because - [Orange 21's September 30 Quarter: Sales are Up, But So Is the Loss](https://jeffharbaugh.com/orange-21s-september-30-quarter-sales-are-up-but-so-is-the-loss/) - This is one of the few times where it makes sense to start on the balance sheet to really understand what’s going on. It shows stockholders’ equity of a negative $4.3 million. How, you might ask, are they paying their bills? If you look under liabilities, you’ll see a “Note payable to stockholder” of $10.5 million. That $10.5 - [PacSun Makes Progress; Third Quarter Results, Store Closings, and Financing](https://jeffharbaugh.com/pacsun-makes-progress-third-quarter-results-store-closings-and-financing/) - When I looked at PacSun’s previous quarter I wrote, “The question in my mind, which hasn’t changed much since the last time I took a look at PacSun, is whether there’s enough uniqueness so they can afford to implement it [their strategy] given the economy and the company’s financial circumstances.” Whether or not their strategy - [Quik’s October 31st Quarter and Full Year](https://jeffharbaugh.com/quiks-october-31-quarter-and-full-year/) - I’m going to work without my usual net of an SEC filing this time. That’s because year-end 10Ks always take a long time to come out, and I don’t want to wait that long to look at Quik’s results. I’ll review the 10K when it does show up. Right now, we’ll go with the press release and conference - [Billabong Reports Deteriorating Sales Growth Trend; The Strategy or the Economy?](https://jeffharbaugh.com/billabong-reports-deteriorating-sales-growth-trend-the-strategy-or-the-economy/) - Billabong’s announcement about sales trends since the end of October and the actions it’s taking may portend issues for other companies as well as for Billabong. Let’s take a look at what they announced, what actions they are taking, how they found themselves in this position, and how it relates to the global economic environment. Here’s - [It’s Tradeshow’s Season. I Started with Agenda, But I’m also Thinking About SIA.](https://jeffharbaugh.com/its-tradeshows-season-i-started-with-agenda-but-im-also-thinking-about-sia/) - Among the things I liked at Agenda, the one I liked the most was Shmooza Palooza, the jobs fair jointly sponsored by Agenda and Malakye.com. 500 people preregistered for it and it was busy every time I looked in. It's great to sell a few more T-shirts or another snowboard, but it's even better to help - [Interesting Stuff from Quiksilver's 10K Annual Report](https://jeffharbaugh.com/interesting-stuff-from-quiksilvers-10k-annual-report/) - Back in December, Quiksilver released its annual and quarterly earnings and held a conference call. I did the best analysis I could, but bitched and moaned because I didn't have the complete 10K or the balance sheet. You can see that analysis here. Last week, the company issued its 10K. I'm not going to redo the analysis I - [Notes on SIA's Denver Show and Thoughts on the Trade Show Slog](https://jeffharbaugh.com/notes-on-the-sia-show-and-thoughts-on-the-whole-trade-show-slog/) - It was nice to walk to the Snow Show the second day when it was actually snowing. I think I'm completely acclimated to Denver, though I do miss playing blackjack with friends. And I still get confused when one of the people who works at the convention center says, "How are you today, sir? Have a - [Billabong’s Upcoming Half Year Report and Their Choices](https://jeffharbaugh.com/billabongs-upcoming-half-year-report-and-their-choices/) - Sometime late afternoon West Coast time, Billabong is going to release their half yearly numbers and have a conference call on those results. In the meantime, as most of you may know, trading on their stock has been suspended pending an announcement. That announcement may have something to do with this article stating that Billabong has received - [Billabong’s Announcement: Short Term Solution, Longer Term Question.](https://jeffharbaugh.com/billabongs-announcement-short-term-solution-longer-term-question/) - With last Thursday's announcement, Billabong has moved to address its balance sheet issues. But, to paraphrase one of the analysts in the conference call, "This is all well and good, but how do we know we won't be discussing the same issue a year from now?" Let’s look at the steps Billabong took and its half - [Update on Billabong: The TPG Offer](https://jeffharbaugh.com/update-on-billabong-the-tpg-offer/) - This is kind of fun. As you’re aware, TPG Capital offered to buy all of Billabong for $3 a share before the Nixon deal and other steps were announced. Billabong said no because the deal was contingent on too many things and they needed an immediate, certain solution to their short term balance sheet issue. But now, even - [Skullcandy’s Quarterly and Annual Results and A Look at Their Strategic Bets](https://jeffharbaugh.com/skulls-quarterly-and-annual-results-and-a-look-at-their-strategic-bets/) - I’m working from the press release and conference call because it takes a while for the full year annual report to be released. But don’t worry; when it does come out I’ll go through it just to make sure something interesting didn’t get missed. Strategy and the Bets They are Placing Strategy is always way - [Vail’s Quarterly Results. If You’re a Winter Resort, Be a Big One. With Rich Customers. And Great Facilities.](https://jeffharbaugh.com/vails-quarterly-results-if-youre-a-winter-resort-be-a-big-one-with-rich-customers-and-great-facilities/) - In Vail Resort's March 6 conference call, CEO Bob Katz described snow conditions during the quarter ended January 31st in the following terms: “In Colorado, snowfall levels were the lowest in over 30 years and for the first time in as many years, we were not able to get Vail's Back Bowl open until Mid-January.” - [Quiksilver’s January 31 Quarter- Sales and Loss Both Grow](https://jeffharbaugh.com/quiksilvers-january-31-quarter-sales-and-loss-both-grow/) - Let’s start with the summary numbers. Sales rose 5.4% to $450 million. The gross profit margin fell from 52.4% to 50.7%. Quik reported an operating loss of $2.5 million compared to operating income of $13 million in the same quarter the previous year. The net loss grew from $15 million to $21 million. Taxes were $4 million higher, but - [Spy (Formerly Orange 21): Their Results for the Year](https://jeffharbaugh.com/spy-formerly-orange-21-their-results-for-the-year/) - As I’ve noted pretty much every time I write about them, we’re lucky to have a smaller brand like Spy that’s public (though I don’t quite know why they are public) because we get to look over their shoulder as they manage their way through issues and opportunities. It’s much better than hoping VF gives us - [Tilly’s Is Still Going Public](https://jeffharbaugh.com/tillys-is-still-going-public/) - In July of 2011, Tilly’s filed an S-1 with the Securities Exchange Commission as a first step towards going public. I read through the filing back then and wrote about it in some detail. On March 23rd, they filed a third amendment to their S-1, so I think we can conclude they are still trying to get - [Skullcandy Releases Its 10K (Annual Report)](https://jeffharbaugh.com/skullcandy-releases-its-10k-annual-report/) - I wrote about Skullcandy back on February 24th shortly after they’d released their numbers for the year and last quarter and held their conference call. You can see that article here. Now they’ve released the 10K and, as promised I’ve been through it. There’s not that much new, different or surprising that I want to highlight, but there’s - [PacSun’s Year and Quarter; Progress, but Work Left to Do](https://jeffharbaugh.com/pacsuns-year-and-quarter-progress-but-work-left-to-do/) - I want to start by focusing on some comments PacSun’s management made that are indicative, I think, of why this is a harder environment for most industry companies and especially for one that is working through a turnaround. Strategies Improving their merchandise assortment planning is not a new theme for PacSun. It’s something that CEO Gary - [Nike and Their Approach to Product Innovation. It’s Not All About Team Riders](https://jeffharbaugh.com/nike-and-their-approach-to-product-innovation-its-not-all-about-team-riders/) - Nike recently came out with their 10Q for the quarter ended February 29th. I looked through it, read the conference call transcript, and sat down with the intention of doing my usual analysis. Then I thought to myself, “Who am I kidding?” You want my analysis? They keep growing, make a lot of money, and their balance sheet - [Tilly’s IPO Moving Forward; Another S1 Amendment is Filed](https://jeffharbaugh.com/tillys-ipo-moving-forward-another-s1-amendment-is-filed/) - Not much is different in this filing, but we do get a few additional pieces of information. You can review what I wrote about their initial filing last July here. I updated that analysis in March of 2012 when they released their numbers for the year. My opinion hasn’t changed and I think the analysis is still valid. - [Globe’s Half Yearly Results](https://jeffharbaugh.com/globes-half-yearly-results/) - Globe actually released these back in February. As far as I can tell everybody, including me, missed them. There’s never a lot of information in these Australian six month results. Still, I thought a brief look might be in order. You can download the report yourself if you want to see it. Globe’s revenues fell 8% from $46.4 - [PPR Earnings Release and Volcom- Exit Strategies for Core Brands](https://jeffharbaugh.com/ppr-earnings-release-and-volcom-exit-strategies-for-core-brands/) - This article was occasioned by PPR’s release of its quarterly results, but that’s not really what it’s about. When PPR, or Decker’s or VF or Jarden releases earnings we’re interested in what happened mostly because we’d like to know what’s going on with Volcom, or Sanuk, or Reef, or K2/Ride. We never find out very much. Volcom - [What Can We Learn From Vail’s Metrics?](https://jeffharbaugh.com/what-can-we-learn-from-vails-metrics/) - Vail Resorts released some metrics today on their season through April 22nd that I thought were worth a quick review because of some of the lessons it teaches any business about market positioning. I also want to discuss briefly accounting for season passes (try and contain your excitement). You can see the complete press release here. The numbers - [Skullcandy’s March Quarter: Great Sales Growth. Where’s the Income?](https://jeffharbaugh.com/skullcandys-march-quarter-great-sales-growth-wheres-the-income/) - There’s a lot of interesting information in this10Q and the conference call. Let’s start with the income statement to see where we want to focus. You can see the whole 10Q here. First, we see a 47.9% growth in sales from $36 million in the quarter ended March 31, 2011 to $53.3 million in the same - [The Management Changes at Billabong](https://jeffharbaugh.com/the-management-changes-at-billabong/) - Let’s review what’s happened. Over a few years, Billabong transformed itself from a wholesaler with a group of strong brands with some retail to a 600 store retailer that owns brands. The retail growth, I’ve written, probably took place a little faster than they had planned, but if what you think is the right opportunity appears, sometimes - [SPY Optic’s Quarter: Sales and Loss Both Grow](https://jeffharbaugh.com/spy-optics-quarter-sales-and-loss-both-grow/) - SPY’s sales for the quarter ended March 31 increased 22% during the quarter to $8.1 million compared to $6.7 million in the same quarter last year. The company had a net loss of $2.58 million compared to $1.52 million in the quarter last year. Sale of SPY branded products were also up 22% to $7.9 million. The - [Decker’s Quarter and Sanuk’s Role in it.](https://jeffharbaugh.com/deckers-quarter-and-sanuks-role-in-it/) - I’m looking at Decker’s filings not because of a general interest in Deckers, but because they purchased Sanuk last July. Unlike Reef as part of VF Corporation, Sanuk is a significant part of Decker’s sales and profits so we can find out way more about how it’s doing as part of Deckers than we can find - [VF’s Quarter and some Broader Considerations](https://jeffharbaugh.com/vfs-quarter-and-some-broader-considerations/) - As I’ve told you, I’m not so much interested in analyzing the financial statements of big multi-brand corporations like VF (or Nike, or PPR, or Jarden, etc.) but of seeing, to the extent we can, what they are doing in the action sports/youth culture space (or whatever industry we’re in). Mostly I don’t think you want - [Zumiez’s Quarter; Ho Hum, Another Good One. How Do They Keep Doing It?](https://jeffharbaugh.com/zumiezs-quarter-ho-hum-another-good-one-how-do-they-keep-doing-it/) - If it wasn’t so intriguing, it would be getting boring. Zumiez’s sales for the quarter ended April 28, 2012 grew 22.7% to $129.9 million from $105.9 million in the same quarter the previous year. Comparable store sales were up 12.9%. Ecommerce sales rose 7.7% and were 6.2% of the quarter’s total sales. They think ecommerce may eventually be 10% - [PacSun’s Quarterly Results: The Financial Statements Show Progress](https://jeffharbaugh.com/pacsuns-quarterly-results-the-financial-statements-show-progress/) - The strategic issue hasn’t changed. As CEO Gary Schoenfeld put it in the conference call, “Regrettably, over the past several years, PacSun lost some of its identity as a brand and its relevance among target consumers…” If they can fix that, they can succeed. Gary Schoenfeld took the job because he thinks they can. You can see their - [Zumiez Buys Blue Tomato](https://jeffharbaugh.com/zumiez-buys-blue-tomato/) - Well, this one caught me by surprise, though I guess it was supposed to. No, not that Zumiez bought Blue Tomato, though that caught me by surprise too. What surprised me is that Zumiez has a “…strategic plan to build the leading global action sports retail business.” And, according to the press release, this acquisition is the “next - [Tilly’s First Quarterly Report](https://jeffharbaugh.com/tillys-first-quarterly-report/) - As you know, Tilly’s went public recently. They’ve just released their first quarterly 10Q report and held their first conference call as a public company. The report is for the quarter ended April 28. Their public offering was May 4, so the balance sheet doesn’t reflect the results of that offering yet, and I don’t have access to - [News From Billabong](https://jeffharbaugh.com/news-from-billabong/) - I just listened to a Billabong conference call where new CEO Launa Inman announced they were raising more capital, downgrading earnings expectations, and undertaking a top to bottom review of all Billabong operations with the goals of reducing expenses, identifying efficiencies and improving the competitive positioning of Billabong and its brands. They want to raise - [Quik’s April 30 Quarter: Adjusted EBITDA Falls 39%](https://jeffharbaugh.com/quiks-april-30-quarter-adjusted-ebitda-falls-39/) - Quik had a 3% sales increase in the quarter, growing to $492 million from $478 million in the same quarter last year but, as I define and discuss below, their adjusted EBITDA fell by 39%. The gross margin percentage fell from 54.8% to 49.2%. That rather significant decline, they say in the 10Q, “…was primarily the - [Spy to Raise Capital by End of August- But That’s All We Know](https://jeffharbaugh.com/spy-to-raise-capital-by-end-of-august-but-thats-all-we-know/) - Spy filed an 8K on July 2 that announced they had increased the amount of the note due to Costa Brava from $6 million to $7 million, and that the full amount of $7 million was already outstanding. They also said they expected to raise some form of equity by August 31. As you may recall, Costa - [Nike’s Annual Report and Some Suggested Reading](https://jeffharbaugh.com/nikes-annual-report-and-some-suggested-reading/) - Two days ago, Nike filed its 10K annual report with the SEC and I’ve been through it. I’m not going to spend a bunch of time doing a detailed analysis of their already reported results if only because there wouldn’t be a lot of insight to be gained. But there were a few comments in the fine - [Speculation on Billabong](https://jeffharbaugh.com/speculation-on-billabong/) - Walking around a really good Agenda show last week, the question I kept getting asked was, “What’s going to happen to Billabong?” As I told everyone who asked, I only had access to the same public information they had. Given that information, my best guess is that Billabong will be sold. Here's my reasoning. As you - [Skullcandy’s June 30 Quarter; Focus on the Strategy](https://jeffharbaugh.com/skullcandys-june-30-quarter-focus-on-the-strategy/) - Skull had a strong quarter, and we’ll review the numbers. But what intrigues me more are the investments Skull is making and the steps they are taking to implement their strategy. That’s where I want to spend most of our time. In what was, and continues to be, an oversimplification I’ve written that the bet Skull was placing - [VF’s Quarterly Results and Strategy: They Do Love Outdoor and Action Sports](https://jeffharbaugh.com/vfs-quarterly-results-and-strategy-they-do-love-outdoor-and-action-sports/) - VF’s reported revenues rising 16.4% in the quarter ended June 30 compared to the same quarter last year. Net income was up 20% from $129.4 million to $155.3 million. As you look at those headline numbers, there are a couple of things to keep in mind. First, the Timberland acquisition closed on September 13, 2011 so - [Spy’s June 30 Quarter. Brand Sales Up, But Gross Margin Falls. What to do About the Balance Sheet?](https://jeffharbaugh.com/spys-june-30-quarter-brand-sales-up-but-gross-margin-falls-what-to-do-about-the-balance-sheet/) - In the conference call discussion of their results Michael Marckx, Spy’s President and CEO, emphasized two things. The first was the total focus on the Spy brand. The second was that they had a solid and complete management team that was in agreement on the company’s strategy and direction. Those are good things. In spite of the sales - [Billabong’s Year and New Plan; I Wish They’d Done This Sooner](https://jeffharbaugh.com/billabongs-year-and-new-plan-i-wish-theyd-done-this-sooner/) - Billabong’s fiscal year ended June 30. On August 27, they released their full year results and presented their promised strategic plan. The financial results were poor but not unexpected, coming in at the low end of their guidance. The good news is that it looks like they wrote off, wrote down, reserved for or expensed every item they - [Spy’s Expense Cuts](https://jeffharbaugh.com/spys-expense-cuts/) - Spy announced on August 27 that they were reducing their North American and European employment by 20 positions, going to a distribution model in Europe (they had been direct previously), and spending less on marketing. They think these changes will cost them $1.2 million in the quarter ($1.0 million in cash) during their 3rd quarter, but - [PacSun’s Quarter: Still Losing Money, But Elements of the Strategy Becoming Clearer](https://jeffharbaugh.com/pacsuns-quarter-still-losing-money-but-elements-of-the-strategy-becoming-clearer/) - Strategies don’t bear fruit in a quarter, or even in a year. There’s still a lot of work to be done before we can say that PacSun’s strategy has been successful if only because the company is still losing money. The goal has been the same for a couple of years now; to make PacSun relevant to - [Zumiez’s July 28th Quarter; Forget the Numbers. I Might Have Had a Strategic Epiphany](https://jeffharbaugh.com/zumiezs-july-28th-quarter-forget-the-numbers-i-might-have-had-a-strategic-epiphany/) - Okay, I don’t mean it. No way I can ignore the financial results. It’s just not the way my mind works. But I was so struck with something President and CEO Rich Brooks said in their conference call that I wanted to start there. He said, as a brief part of a longer answer to an analyst’s question, “…we - [Tilly’s Quarter: The Connection Between Operations and Marketing](https://jeffharbaugh.com/tillys-quarter-the-connection-between-operations-and-marketing/) - We need to start by recalling that Tilly's converted from an S to a C corporation on May 2nd, 2012 and went public May 3rd. That had an impact on its comparative financial statements. Let's review the GAAP results than look at that impact. Sales grew 20.5% to $105 million from $87.3 million in the - [Quiksilver’s July 31 Quarter: Net Income Rises due to Lower Tax Rate](https://jeffharbaugh.com/quiksilvers-july-31-quarter-net-income-rises-due-to-lower-tax-rate/) - Quik’s net income for the quarter rose 16% to $12.5 million compared to $10.7 million in the pcp (prior calendar period- same quarter the previous year). But the provision for income taxes fell from $9 million to $2.5 million or from 45.6% to 16.8%. Here’s what Quik says in their 10Q about why that happened. “This decrease - [Buckle’s Quarter and a Note on Auction Rate Securities](https://jeffharbaugh.com/buckles-quarter-and-a-note-on-auction-rate-securities/) - I should start out by telling you that the Buckle July 28, 2012 balance sheet is strong. But long term investments include $15.1 million in Auction Rate Securities (ARS). An ARS is a long term security with an interest rate that resets via a “Dutch auction” every 7 to 49 days depending on the terms of the - [Globe’s Results for the Year](https://jeffharbaugh.com/globes-results-for-the-year/) - I’m kind of late getting this done. The June 30 fiscal year results were released at the end of August. But we only see Australian company results twice a year, so it still seems worthwhile. Happily for me, there’s not that much information in the report so it shouldn’t take long. The “Review of Operations” for the whole year - [Nike’s Quarter- It’s (Still) Good to Have a Big Balance Sheet](https://jeffharbaugh.com/nikes-quarter-its-still-good-to-have-a-big-balance-sheet/) - Nike’s 10Q was released three days ago, so it’s time to take a look at their results. Sometimes I wonder why we even talk about Nike. I guess it’s because after arrogantly stumbling around in the dark in the action sports world for a few years, they developed some patience, mixed it with a bit of - [Skullcandy’s September 30 Quarter; This is Going to Get Interesting](https://jeffharbaugh.com/skullcandys-september-30-quarter-this-is-going-to-get-interesting/) - Since Skullcandy went public, I’ve characterized the bet they are placing as “whether or not you can be cool in Fred Meyer.” I’ve also asked if coolness is enough of a market differentiator in a product which, especially at the lower end, is increasingly something of a commodity. And finally, I’ve wondered if Skull can have any - [VF’s Quarter. Thank God for 10Qs (What an odd thing to say)](https://jeffharbaugh.com/vfs-quarter-thank-god-for-10qs-what-an-odd-thing-to-say/) - VF had a quarter in which total revenues rose 14.3% from $2.73 billion to $3.12 billion. Net income was up 26.8% to $381 million. I don’t find it as clear cut as that sounds, and the way to approach analyzing it is to go right to Note G- Business Segment Information in VF’s 10Q and reproduce part - [SPY’s Quarter; Strategy and the View from the Balance Sheet.](https://jeffharbaugh.com/spys-quarter-strategy-and-the-view-from-the-balance-sheet/) - About a hundred years ago, around 1998, I spent a year as one in a long line of people who believed in the Sims brand enough to try and get it some traction (Some of you who are reading this are smiling; some are laughing. At me or with me- who knows). Sims benefitted from having - [Decker’s Quarter: The Issue is Not with Sanuk](https://jeffharbaugh.com/deckers-quarter-the-issue-is-not-with-sanuk/) - The September 30 quarter (here’s the link to the 10Q) was not one of great happiness for Decker, the owner of UGG, Teva and, of special interest to us, Sanuk. But perhaps we should be interested in their other brands as well. Most of you who sell shoes and sandals are competing directly in the broader casual - [Paul Naude Offers AUD 1.10, Billabong Reduces Full Year Forecast](https://jeffharbaugh.com/paul-naude-offers-aud-1-10-billabong-reduces-full-year-forecast/) - This is just intriguing. There is so much happening and it’s going on so fast (at least in corporate terms). It’s like a novel you can’t put down or a soap opera where waiting for the next episode to find out who does what to whom is excruciating. Like you, I’m working from the Billabong announcement and - [Zumiez’s October 29 Quarter and a Strategic Observation](https://jeffharbaugh.com/zumiezs-october-29-quarter-and-a-strategic-observation/) - Zumiez reported sales growth during the quarter of 16.9% from $154 million to $180 million. Without the Blue Tomato acquisition, sales would have risen 11.7%. The gross profit margin fell from 38.9% to 37.3%. Selling, general and administrative expenses rose from $37.1 million to $45.7 million, or by 23.2%. As a percentage of sales, they rose from 24.1% to - [Pacific Sunwear’s Quarter; Look! It’s a Profit!](https://jeffharbaugh.com/pacific-sunwear-quarter-look-its-a-profit/) - PacSun earned $948,000 in the quarter ended October 27 compared to a loss of $17.6 million in the same quarter last year. Their comparable store sales rose 1%. It’s the first time that’s happened since the third quarter of 2007. Their loss for nine months is $32.2 million compared to a loss of $68.3 million in nine months - [Tilly’s Quarter and Their Business Approach](https://jeffharbaugh.com/tillys-quarter-and-their-business-approach/) - Just for fun, let’s jump right to some comments in the conference call for Tilly’s quarter ended October 27, 2012. In discussing the quarter’s results, CEO Daniel Griesemer notes that, “While our third quarter comparable store sales growth of 1.9% [They were 8.5% in the same quarter last year] was below our expectations, this represents high - [Abercrombie & Fitch’s Quarter and Some Consistencies with Other Retailers](https://jeffharbaugh.com/abercrombie-fitchs-quarter-and-some-consistencies-with-other-retailers/) - I haven’t followed A & F as closely as I probably should. Too many companies (especially now that our market is something broader than action sports), not enough time. But A & E is the owner and originator of that iconic surf brand Hollister (heavy sarcasm). And especially after my recent post on cosmetics and skateboarding where I - [Trade Show Season or, “Hi Ho, Hi Ho, It’s Off to Sell We Go!”](https://jeffharbaugh.com/trade-show-season-or-hi-ho-hi-ho-its-off-to-sell-we-go/) - My list this year includes Agenda, The KNOWSHOW in Vancouver, and SIA in Denver. Part of me would like to go to others, especially Surf Expo, part of me wouldn’t and, like all of you, I figure it out based on schedule, resources, expected results and, frankly, my tolerance for travel. I liked Agenda as usual. Also - [Quiksilver’s Year, Quarter, and Strategy; EBITDA Declines](https://jeffharbaugh.com/quiksilvers-year-quarter-and-strategy/) - Three days ago, Quik filed its annual 10K with the Security and Exchange Commission for the year ended October 31, so I’ve had the happy task of wading through it and rereading the earnings conference call from a few weeks ago. You can see the 10K here if you want. I’ll look at the results for - [I Went to the Know Show. I’m Back](https://jeffharbaugh.com/i-went-to-the-know-show-im-back/) - I haven’t been before, and I didn’t stay long, but that’s a really good thing because it’s an indication that the show is accomplishing just what it’s supposed to be accomplishing. The show was full of focused retailers paying close attention to presentations by reps and, as far as I could tell and from what - [A Comment About a Billabong Deal and a Chance to Place Your Bet](https://jeffharbaugh.com/a-comment-about-a-billabong-deal-and-a-chance-to-place-your-bet/) - I was a bit surprised when VF’s preliminary bid for Billabong came as late as it did, and I was also intrigued by the partnership with Altamont. Why, I wondered, didn’t VF just buy Billabong itself? A couple of possible answers occurred to me. The first was that somehow they couldn’t afford it. But a review of their - [PPR’s Annual Report: How’s Volcom Doing?](https://jeffharbaugh.com/pprs-annual-report-hows-volcom-doing/) - When a smaller company in our industry is acquired by a conglomerate, it often becomes difficult to follow how the acquired company is doing because the conglomerate isn’t required to release any details on that company’s performance. Think Reef after it was acquired by VF (though I imagine we might have heard more if Reef had - [Trade Show Evolution: The Boardroom with the Vans U.S. Open. I Like It, I’m There.](https://jeffharbaugh.com/trade-show-evolution-the-boardroom-with-the-vans-u-s-open-i-like-it-im-there/) - Over the years I’ve had a lot (some would say way too much) to say about Trade Shows. I’ve suggested there were too many, that they were too expensive, that the internet made them less necessary, that they’d lost focus, weren’t efficient, and that the way product was sold into broader distribution made them less important. - [Billabong’s Half Yearly Report. Now What?](https://jeffharbaugh.com/billabongs-half-yearly-report-now-what/) - I listened to Billabong’s conference call yesterday and have spent part of last evening and this morning going over the detailed financial reports. I lead an exciting life. There’s a lot going on at Billabong, and I want to start with an overview before we get to the financial nuts and bolts. All numbers are in Australian Dollars. - [The Changes at Quiksilver; A Broader Industry Organizational Perspective](https://jeffharbaugh.com/the-changes-at-quiksilver-a-broader-industry-organizational-perspective/) - On Monday, The Editors at Boardistan, posted a still evolving story about cuts to Quiksilver’s team rider programs. Here’s a link to the post. As Boardistan points out, at that time there had been no official announcement from Quik, so we didn’t know the extent of the changes. They then make the insightful comment that “…Hollister doesn’t - [VF’s Strategy; Why it is Consistent with the Competitive Environment](https://jeffharbaugh.com/vfs-strategy-consistent-with-competitive-environment/) - VF filed its 10K annual report with the SEC three days ago, so I’ve been able to get a more complete picture of their performance for the year and quarter. You can see that report here. As you probably know, VF is a large consumer conglomerate that owns 30 brands including Vans, The North Face, Reef and - [Globe’s Six Month Results; Sales Rise, Profit Falls](https://jeffharbaugh.com/globes-six-month-results-sales-rise-profit-falls/) - Globe filed its financial results for the six months ended December 31, 2012 on February 28th. There’s not a lot of information, but I thought it was worth a brief look. The headline is that sales rose 3.8% from $42.3 million to $43.9 million. Those numbers are in Australian Dollars as are all the numbers in - [Interesting Comments From Deckers; What Will They Do With Sanuk?](https://jeffharbaugh.com/interesting-comments-from-deckers-what-will-they-do-with-sanuk/) - Deckers, the owner of UGG and Teva as well as Sanuk, filed their 10K annual report with the SEC and I’ve been through it. As you may remember, Deckers bought Sanuk on July 1, 2011 so the year ended December 31, 2012 is the first complete year with Sanuk included. For the year, revenue rose 2.8% - [Quiksilver’s Quarter and the Impact of New Management](https://jeffharbaugh.com/quiksilvers-quarter-and-the-impact-of-the-new-regime/) - Using Quik’s recent changes as an excuse, I wrote a week or so ago about the dynamics of organizational change in companies experiencing new business environments. You can see that article here. Now, Quik has come out with their 10Q for the quarter ended January 31, 2013 and held a conference call. A lot of what they said - [Skull Candy’s Results and Management Change; Rick Alden Rides Again!](https://jeffharbaugh.com/skull-candys-results-and-management-change-rick-alden-rides-again-2/) - I have been writing recently about organizational dynamics, changing CEOs, and the situational authority you have when you walk into a turnaround. My own experience is that when things suck and you walk in as the new guy, it’s really liberating because you can try anything. About five weeks ago, Skull’s founder Rick Alden returned as - [Zumiez Annual Results and its Evolution as a Brand](https://jeffharbaugh.com/2517/) - I’ve talked before about brands becoming retailers and retailers becoming brands. There's a lot of uncertainty as to what that would mean and how it would cause the market to evolve. I’ve also said that the best retailers make the brands they carry credible- not the other way around. That’s true, but I don’t think I completely - [SPY’s Sales Up, Loss Reduced; But There’s Still That Pesky Balance Sheet](https://jeffharbaugh.com/spys-sales-up-loss-reduced-but-theres-still-that-pesky-balance-sheet/) - It’s been years since we’ve had an annual or quarterly report from SPY so focused on growing the brand and with so little mention of managing past problems. Remember, though, that all I know and write about is what I hear in the conference call or read in the public documents. Speaking of which, here’s the link - [The Confluence of Internet with Brick and Mortar, and Notes from Nike’s 10Q](https://jeffharbaugh.com/the-confluence-of-internet-with-brick-and-mortar-and-notes-from-nikes-10q/) - Nike filed its 10Q for the quarter ended February 28th on April 4th. You can see it here. An actual analysis of their financial statements seems like a waste of time. I’ll mention a few comments I pulled out, but then I want to get on to what they are saying about e-commerce as it seems to be - [Naude/Sycamore Bid $0.60 for Billabong, but Deal Not Done Yet](https://jeffharbaugh.com/naudesycamore-bid-0-60-for-billabong-but-deal-not-done-yet/) - Paul Naude and Sycamore Partners (“NS”) have made a non-binding bid of AUD $0.60 for each share of Billabong yesterday, down from their preliminary bid of $1.10. Billabong has given them an exclusive period of ten business days to complete their investigation and finalize the bid. You can read Billabong’s press release here. It’s the “proposal update” under - [PacSun’s Strategic Positioning and Results for the Year](https://jeffharbaugh.com/pacsuns-strategic-positioning-and-results-for-the-year/) - There are two things I really like about PacSun’s 10K annual report (read it here) which was filed last Friday. The first is that they are more or less through closing stores. From a peak of 950 stores in 2008, they ended their February 3rd fiscal year with 644 stores. They closed 38 stores in fiscal 2008, 40 - [VF’s First Quarter: Outdoor and Action Sports Continue to Shine](https://jeffharbaugh.com/vfs-first-quarter-outdoor-and-action-sports-continues-to-shine/) - VF’s March 31 10Q reported an overall 2.15% increase in revenues from $2.556 billion to $2.612 billion from the same quarter last year (Would have been 1% more, but they sold the John Varvatos brand). But outdoor and action sports revenue was up 9.7% from $1.264 billion to $1.384 billion, representing 53% of total revenue - [Skullcandy’s Quarter: I Think I Recognize This Strategy](https://jeffharbaugh.com/skullcandys-quarter-i-think-i-recognize-this-strategy/) - New President and CEO Hoby Darling has been at Skull north of two months now, and the company has released its first 10Q and had its first conference call with him at the helm. The outlines of his strategy are starting to become clear. Interestingly, you’ll note some similarities with the strategy of certain VF brands as - [Decker’s Quarter: What’s Up with Sanuk?](https://jeffharbaugh.com/deckers-quarter-whats-up-with-sanuk/) - I think the last analysis I wrote on Deckers may have had the same title. Which is okay because though Deckers also owns UGG, Teva and other brands, we’re mostly interested in Sanuk which spring from the surf industry and was acquired by Deckers. I’ll give you a brief overview of Decker’s March 31 results, and then - [SPY’s March 31 Quarter: Really Good News](https://jeffharbaugh.com/spys-march-31-quarter-really-good-news/) - This is a little weird for me, but I’m not going to start with the numbers. Rather, I want to start with some of CEO Michael Marckx’s comments in the conference call. I may not have these quotes exactly right because I can’t type as fast as he talks. He said things like: · “Super service - [Zumiez’s Quarter: Comments on Growth and Ecommerce](https://jeffharbaugh.com/zumiezs-quarter-comments-on-growth-and-ecommerce/) - Zumiez’s 10Q and conference call for its quarter ended May 4th offered some insight into its growth strategy that I think are worth reviewing. Some of it isn’t new, but taken together the comments are interesting. Some Points of Strategy At the end of the quarter, Zumiez had 503 stores; 475 in the United States, - [Billabong Update: The Deal is off, or at Least Changing](https://jeffharbaugh.com/billabong-update-the-deal-is-off-or-at-least-changing/) - What We Know Billabong announced yesterday that there would not (at least at the present time) be a sale of the entire company to either the Sycamore Consortium (which includes Paul Naude) or to the Altamont/VF group. The company further announced that they were still talking to both groups “…regarding proposals presented to the Company for - [Quiksilver’s Quarter and Strategy Update](https://jeffharbaugh.com/quiksilvers-quarter-and-strategy-update/) - Quiksilver reported a net loss of $32.4 million in the quarter ended April 30 compared to a loss of $5 million in the same quarter last year. They also released information on their efforts to reduce costs and refocus the business. To start, here’s a link to the press release in the 8K with the financial - [PacSun’s May 4th Quarter; A Couple of Items to Discuss](https://jeffharbaugh.com/pacsuns-may-4th-quarter-a-couple-of-items-to-discuss/) - This, happily, won’t be like the short novel I had to write for Quiksilver. There are some interesting conference call comments and two income statement entries crying out for a brief discussion, but that’s pretty much it. Let’s get going. Sales rose 4.7% from $162.3 in the quarter last year ended April 28, 2012 to $169.8 million - [The Buckle May 4th Quarter](https://jeffharbaugh.com/the-buckle-may-4th-quarter/) - There’s never time to write about everything I want to write about, and The Buckle is one that has often slipped through the cracks. And while there’s nothing dramatic to report, I thought it might be time to take a short look at their results. At the end of the quarter, The Buckle operated 443 stores - [Abercrombie & Fitch’s May 4th Quarter; There’s a Lot Going On](https://jeffharbaugh.com/abercrombie-theres-a-lot-going-on/) - I’ve gotten out of the habit of reviewing A&F’s results, but a cursory look at their 10Q intrigued me. You don’t typically see sales fall 9% while pretax income for the quarter improved (if that’s what you want to call it) from a loss of $30 million in last year’s quarter to a loss of $15 - [The Billabong Deal](https://jeffharbaugh.com/the-billabong-deal-2/) - As you have no doubt heard, Billabong has reached a deal with “…entities advised by Altamont and entities sub-advised by GSO Capital Partners1 (the credit arm of the Blackstone Group, and together with Altamont, the “Altamont Consortium”)” to sell Dakine to Altamont, get bridge financing to pay off its existing syndicated bank debt, put together - [The Billabong Deal- A Second Offer Appears and is Rejected](https://jeffharbaugh.com/the-billabong-deal-a-second-offer-appears-and-is-rejected/) - There are various articles flying around (and on Billabong’s web site) that tell us Oaktree Capital Management LP and Centerbridge Partners LP made an offer for Billabong yesterday (or the day before- I get confused about what day it is in Australia). As you know, the Altamont Consortium made, and Billabong accepted, an offer to buy - [Billabong Deal Completed](https://jeffharbaugh.com/billabong-deal-completed/) - Billabong announced today that the interim financial deal with Altamont and its partners and the sale of Dakine to the same group had been completed. They also announced that their syndicated debt liabilities had been paid off in full and that the two proposed Altamont directors would join the board. Here’s the announcement on the Billabong investors - [Brand Extensions, Market Niches, Internships and Other Notes from the Agenda Show](https://jeffharbaugh.com/brand-extensions-market-niches-internships-and-other-notes-from-the-agenda-show/) - Agenda did its usual good job of putting on what I’ll call its youth culture show in Long Beach last Thursday and Friday. I don’t really like that term, but I like “action sports” less at this point in our industry’s evolution and I really hate “fashion.” And not everything is “urban” or “street” wear so it’s - [Relaxed Fit](https://jeffharbaugh.com/relaxed-fit/) - Maybe a month ago, I was walking through a local mall visiting all the usual retailers to see how things looked. I stopped at a PacSun store and was attracted to a table with some Volcom shorts on it in colors I really liked. There was a sticker on the shorts that said, “Relaxed Fit.” I - [Selling Less In a Good Cause; Skullcandy’s Strategy and Quarter](https://jeffharbaugh.com/selling-less-in-a-good-cause-skullcandys-strategy-and-quarter/) - In the quarter ended June 30, Skull’s sales fell by 30% to $50.8 million from $72.4 million in the same quarter the previous year. Their gross margin fell from 48.6% to 44.9%. Selling, general and administrative expenses actually rose slightly from $23.5 to $24 million, but if you exclude the almost $1 million that’s included for the - [A Brief Update on Billabong](https://jeffharbaugh.com/a-brief-update-on-billabong/) - As you are probably aware, Billabong yesterday published a press release announcing the expected resignation of Launa Inman as CEO and of Paul Naude as a director and employee. It also said that, “Discussions with Scott Olivet regarding his appointment as CEO are continuing but have not been finalised as we await the outcome of the - [VF’s June 30 Quarter; Net Income Down, But Kind of Not Really.](https://jeffharbaugh.com/2716/) - VF’s net income fell 11% from $155.4 million in the quarter to $138.3 million in the same quarter last year. But last year’s quarter included a gain of $41.7 million from the sale of the John Varvatos brand that was booked under Other Income (Expense). In this year’s quarter, instead of a gain of $41.6 million, that - [What’s Up at Sanuk? Oh- And Decker’s June 30 Quarter](https://jeffharbaugh.com/whats-up-at-sanuk-oh-and-deckers-june-30-quarter-2/) - Deckers, as you know, owns UGG, Teva and some other smaller brands as well as Sanuk. At June 30, they had 89 retail stores as well. In the quarter ended June 30, Deckers reported sales that fell 2.5% to $170 million compared to last year’s June 30 quarter. The gross profit margin declined from 42.2% to 41.1%. Selling, - [Spy’s June 30 Quarter; Things Are Getting Happier](https://jeffharbaugh.com/spys-june-30-quarter-things-are-getting-happier/) - There are two things that really struck me in reading Spy’s June 30 10Q (which you can read here). You may not have seen them because, unlike you, I delight in reading small print and conference call transcripts. Perhaps “delight” is too strong a word. Anyway, the first thing I saw was that they had no (as - [Billabong's Annual Report](https://jeffharbaugh.com/2739/) - Billabong released its results for the year ended June 30, 2013 a few days ago, and I’ve been plowing through the 200 or so pages of material and listening to the conference call. My recent writings about public companies have been lamenting that they are public. Not just because they have to share their travails - [Globe’s Annual Results](https://jeffharbaugh.com/globes-annual-results/) - Globe reported a loss for the year ended June 30 of $6 million compared to a profit of $62,000 in the prior calendar period (pcp). That’s in Australian dollars, as are all the numbers in this article. Total revenues rose 2% from $83 to $84.1 million. The Globe brand was up 10%, but Dwindle fell 15%. Cost of sales - [How Our Market is Changing: PacSun’s August 3 Quarter](https://jeffharbaugh.com/how-our-market-is-changing-pacsuns-august-3-quarter/) - We will, of course, get to the numbers. Among other things, we’ll talk about the impact of an extra week and their derivative liability. But let’s start by jumping right to the conference call and noting some things CEO Gary Schoenfeld says. He defines their core customer as “…the more fashion-savvy, older teen and early 20 - [Joining the Party; Quiksilver’s July 31 Quarter](https://jeffharbaugh.com/joining-the-party-quiksilvers-july-31-quarter/) - It’s almost unanimous. Companies in our industry, (whatever industry we’re in) or for that matter most other industries, are cutting expenses, rationalizing supply chains, targeting marketing efforts, cutting SKUs, creating omni channels, growing ecommerce business, being more discriminating in distribution and generally doing all the things they have to do if they assume that sales growth - [Billabong’s Deal. I Didn’t See This One Coming.](https://jeffharbaugh.com/billabongs-deal-i-didnt-see-this-one-coming/) - I thought the Altamont deal would happen. I figured Billabong just had to get a deal done. That’s what they were doing until Centerbridge Partners and Oaktree Capital Management (we’ll call them the Consortium as Billabong does) asked the Australian Government’s Takeover Panel to take a look at the deal. Basically, the Consortium claimed that the deal - [You Own Action Sports in the Mall. Now What? Zumiez’s Quarter](https://jeffharbaugh.com/you-own-action-sports-in-the-mall-now-what-zumiezs-quarter/) - The headline I guess is that for its quarter ended August 3rd, Zumiez increased its sales and profits smartly. We have to talk about the impact of the Blue Tomato acquisition (July 4, 2012) and some restructuring costs, but basically things look good on a quarter over quarter basis. The more interesting issue, however, is the - [The Buckle’s Quarter](https://jeffharbaugh.com/the-buckles-quarter/) - This, I’m happy to say, is going to be pretty short. But I’ve gone to the trouble of reviewing their information so I might as well write something. As I’ve noted before, what intrigues me about The Buckle is the way they’ve integrated their private label brands with the other brands they carry in their merchandising. They - [Abercrombie & Fitch Quarter: Trends Impacting Us All](https://jeffharbaugh.com/2777/) - Consistent with other retailers, A&F’s numbers for their August 3 quarter were not so good. Let’s look at those numbers and then talk about the general trends I think are impacting most retailers in our space. The Numbers Net sales fell about 1% from $951 to $946 million. U.S. sales were down 8% compared to last - [Kering tells us Almost Nothing about Volcom’s Results](https://jeffharbaugh.com/kering-tells-us-almost-nothing-about-volcoms-results-and-its-no-wonder/) - Kering reported its earnings for the September 30 quarter last week. We learned very little about Volcom and Electric. It’s like trying to find out what’s going on with Ride when we review Jarden’s financials or Reef when we look at VF’s. They just aren’t big enough to require much disclosure. What I do believe is when there’s good - [Billabong: Restructuring News and Sale of West 49](https://jeffharbaugh.com/billabong-restructuring-news-and-sale-of-west-49/) - I got four pieces of information for you. If you’d prefer, you can read Billabong’s announcement which came out Monday their time. It’s the first item under “Recent News.” The most interesting, which they leave for last, is the pending sale of West 49 to YM Inc., “a leading fashion retailer with a number of highly successful - [Skullcandy’s Quarter; Consolidating to Grow](https://jeffharbaugh.com/skullcandys-quarter-consolidating-to-grow/) - Skullcandy’s 10Q for its September 30 quarter came out yesterday. I’ve been through it and the conference call. They are continuing to apply the tactics they’ve adopted as part of their turnaround strategy. That means, in the words of CEO Hoby Darling, “…as we go into Q4, we’re going to do the exact same things that we did - [VF’s Quarter; Outdoor and Action Sports Continue to Lead, But...](https://jeffharbaugh.com/vfs-quarter-outdoor-and-action-sports-continue-to-lead/) - There are, to my way of thinking, three main points to be made about VF’s September 30 quarter. The first is that the Outdoor & Action Sports (OAS) segment revenues as reported rose 6.43%. Excluding a $32 million foreign exchange gain, the increase was 4.7%. Jeanswear was up 3.89% as reported and the other segments (Imagewear, Sportswear, Contemporary - [SPY’s Quarter: More of the Same. That’s Good and Bad](https://jeffharbaugh.com/spys-quarter-more-of-the-same-thats-good-and-bad/) - To sum it all up, the good news is that sales for the quarter ended September 30.2013 rose 2.7% compared to the same quarter last year from $9.89 to $10.15 million and the net loss declined from $1.78 million to $302,000. The bad news continues to be the balance sheet, where the long term debt to - [How’s Sanuk Doing? Decker’s Quarterly Results](https://jeffharbaugh.com/hows-sanuk-doing-deckers-quarterly-results/) - So I guess I’ll start by telling you what Deckers says about Sanuk. In the 10Q for the quarter ended March 31, 2013 they provide this Sanuk Brand Overview (page 17). I’ve highlighted the phrase I want you to pay attention to. “The Sanuk brand was founded 15 years ago, and from its origins in the Southern - [Some Additional Financial Information on Mervin](https://jeffharbaugh.com/some-additional-financial-information-on-mervin/) - For some reason, following the November 7th sale of Mervin, Quiksilver had to file an 8K that showed Quik’s proforma financial statements as if the sale of Mervin had already occurred. To do that, Quik shows us the adjustments they have to make to represent their balance sheet as if Mervin had been sold at the - [Quiksilver’s Decision to License Children’s Apparel](https://jeffharbaugh.com/quiksilvers-decision-to-license-childrens-apparel/) - On November 26, when Quik announced that LF USA (a subsidiary of Hong Kong headquartered Li & Fung, a multinational consumer goods sourcing, logistics and distribution group) would “…design, manufacture and market children’s apparel bearing the Quiksilver and DC brand trademarks in the Americas…” I tried to ignore it. It was a short press release and, on - [Intrawest Files for Initial Public Offering. Will it Happen?](https://jeffharbaugh.com/intrawest-files-for-initial-public-offering-will-it-happen/) - On November 12, Intrawest Resort Holdings, Inc. filed the first draft of a form S1 with the SEC for an initial public offering. Like all first drafts, there’s some significant information missing, including the proposed price of the stock and how much they want to raise. But at 400 pages as a PDF, there’s also a lot - [PacSun’s Quarter: The Transition Continues](https://jeffharbaugh.com/pacsuns-quarter-the-transition-continues/) - I have been writing for a while now, without having a really good answer, about just what market we are in as action sports doesn’t, for most of our companies, adequately describe the customer base or competitive environment. Outdoor, youth culture, fashion are all words bandied about to describe it. It’s probably some of all of those. - [Billabong: Light at the End of the Tunnel](https://jeffharbaugh.com/billabong-light-at-the-end-of-the-tunnel/) - At the annual meeting on December 10, Billabong’s Chairman, Ian Pollard, and new CEO Neil Fiske talked to shareholders. Ian talked about what the last year plus had been like and Neil outlined his ideas and strategies for Billabong going forward. You can see their presentations here if you want to. At the moment, it’s the first item - [Does it Matter What Industry We Think We’re In? Zumiez’s Quarter](https://jeffharbaugh.com/does-it-matter-what-industry-we-think-were-in-zumiezs-quarter/) - For many of us, “action sports” doesn’t really describe our target market anymore. We struggle (or at least I struggle) with words like “youth culture” or “fashion” or “outdoor” to describe it. None of them work very well. They are all correct, but not adequate or complete. Maybe Zumiez has helped me figure out why. During the conference - [Quiksilver’s 10K: It’s Results for the Year and Some Issues of Strategy](https://jeffharbaugh.com/quiksilvers-10k-its-results-for-the-year-and-some-issues-of-strategy/) - If you haven’t noticed, I’ve been working to not just report the numbers (it’s hard to grab readers attention with the drama of a changing current ratio) but to draw some larger business lessons from company reports and make us all think about the issues. You can think I’m wrong, or you can think I’m right - [Agenda Show: The New Skate Business Model](https://jeffharbaugh.com/agenda-show-the-new-skate-business-model/) - I’m somewhere in the middle of the country between the Agenda and Surf Expo trade shows at 30,000 feet. Before I talk about the sea change in skateboarding I saw at Agenda, I have a request. Will the powers that be at both shows please figure out how to not have the shows overlap? Please, no explanations - [Surf Expo from the 10,000 Foot Level- Literally](https://jeffharbaugh.com/surf-expo-from-the-10000-foot-level-literally/) - Yesterday morning, I was in warm, humid, sea level Orlando for Surf Expo. After 14 hours of travel, I found myself at the cold, dry, and 10,000 feet high Keystone resort for the Zumiez 100K event. Whew. One beer was my limit with dinner last night, and then I went to sleep early. Agenda and Surf Expo are - [Tilly’s Quarter and the Retail Environment](https://jeffharbaugh.com/tillys-quarter-and-the-retail-environment/) - Tilly’s quarter ended November 2, though the 10Q didn’t come out until later. I’m late writing this, but I thought there were a few things in it you might want to think about, especially given the holiday results and warnings from industry retailers. Just to be clear, I believe the country was over retailed even before - [A Sustainable Competitive Advantage: The Zumiez 100K](https://jeffharbaugh.com/a-sustainable-competitive-advantage-the-zumiez-100k/) - I have written before about the value of Zumiez’s hiring, training, and promotion process. They take kids with a passion for the activities and brands their stores sell, train them, support them, make them compete with their peers, and promote the ones who succeed. The average age of store managers is something like 23 and pretty much - [Intrawest Officially Trading as a Public Company. What's the Impact?](https://jeffharbaugh.com/intrawest-officially-trading-as-a-public-company-whats-the-impact/) - As many of you know, Intrawest, the owner of Steamboat, Winter Park, Tremblant, Stratton, Snowshoe, Mammoth, and half of Blue Mountain, started trading as a public company on January 31. The initial offering price for the stock was supposed to be $15 to $17, but it ended up going public at $12 in a soft stock - [Thoughts from the SIA Show](https://jeffharbaugh.com/thoughts-from-the-sia-show/) - So I confess. I’m from Seattle and there was no way in hell I was going to be on a plane Sunday while the Super Bowl was on. I left Saturday. But in my two days wandering the show, I had some thoughts I wanted to share with you. There was a bit more of a somber attitude - [Billabong and Quiksilver; Two Peas in a Pod](https://jeffharbaugh.com/billabong-and-quiksilver-two-peas-in-a-pod/) - Billabong’s announcement last week that it was, among other things, conducting a strategic review of SurfStitch and Swell caused me to focus on the similarities of its situation to Quiksilver’s. It also made me realize that most of what has been discussed publically by both companies is what I’ll call mechanical issues. I want to remind you - [Billabong’s Half Yearly Report: Starting Over](https://jeffharbaugh.com/billabongs-half-yearly-report-starting-over/) - Billabong reported their financial results for the six months ended December 31, 2013 last Thursday. I’ve been diving into a hoard of details they posted. After all of that, I think I’m going to end up spending a lot less time than usual on some of those details. That’s because I largely agree with a couple of - [Sport Chalet and Ideas on the Retail Environment](https://jeffharbaugh.com/sport-chalet-and-ideas-on-the-retail-environment/) - I don’t follow Sport Chalet closely. But they said something in their 10Q for the December 29th quarter that related to some other ideas I’d seen on how the retail market is changing. I thought they might be worth talking about together. Sport Chalet’s Dilemma Sport Chalet operates 52 stores, 34 of which are in Southern - [VF’s Quarter and Results for the Year: One Sentence Caught my Attention](https://jeffharbaugh.com/vfs-quarter-and-results-for-the-year-one-sentence-caught-my-attention/) - Okay, strong balance sheet, revenue growth, profitable, blah, blah, blah. I’ll get to all that. But on page 22 of the conference call an analyst asked about their interest in potential acquisitions. The answer from CFO Bob Shearer, in part, was “…how we think about acquisition targets, and we think about it a lot, and yes, we have - [Deckers’ Full Year Results and Some Insights on Sanuk](https://jeffharbaugh.com/deckers-full-year-results-and-some-insights-on-sanuk/) - We’ve all been interested in Deckers since they bought Sanuk. I want to start by pulling what we can on Sanuk out of the 10K and conference call. But Deckers also said some interesting things about direct to consumer business and how brick and mortar integrates with online. Finally, of course, I’ll look at their numbers for the - [Quiksilver’s Quarterly Results: Still a Work in Progress](https://jeffharbaugh.com/quiksilvers-quarterly-results-still-a-work-in-progress/) - It’s not usual that I’m happy to see a decline in year over year revenues during a quarter, but in the case of Quiksilver, I think I’ll make an exception. Their revenues for the quarter ended January 31 fell by 4.8% from $412 to $396 million. But at least some of that decline is from cleaning up - [Skullcandy’s Year and Quarter: Still Comes Down to Whether They Can Be Cool at Fred Meyer](https://jeffharbaugh.com/skullcandys-year-and-quarter-still-comes-down-to-whether-they-can-be-cool-at-fred-meyer-2/) - My dilemma is that I like almost all of what Skull is doing. But it’s hard to pull it off as a public company. Either they are pursuing a niche strategy where it will be hard to get acceptable public market kind of growth, or they are competing in a much larger market against players that have - [Zumiez’s Annual Report: Growth, but Constrained by the Economy.](https://jeffharbaugh.com/zumiezs-annual-report-growth-but-constrained-by-the-economy/) - Zumiez reported top and bottom line growth even as they acknowledged and were impacted by the economic headwinds in Europe and the U.S. As they put it, “…teen retail in general experienced a challenging sales environment, with many mall based teen retailers seeing significant sales declines. Zumiez was not immune to the declines in traffic; however…our - [SPY’s Year: Sales and Margin Up, Expenses Down](https://jeffharbaugh.com/spys-year-sales-and-margin-up-expenses-down/) - When I review SPY’s results, we get to see what a smaller specialty brand is doing. They would prefer, I imagine, that they weren’t public and that we didn’t get to look over their shoulder. But for the time being anyway, we do. I suppose I need to confess that they are doing most of the things - [Intrawest's First Quarterly Report](https://jeffharbaugh.com/intrawests-first-quarterly-report/) - Intrawest recently filed their first public report since going public. You’ll remember that they did an initial public offering (IPO) as a way to restructure their balance sheet after the real estate market for mountain properties collapsed. I wrote about that here and here. Fortress was the company that owned most of Intrawest’s debt. Now that the debt has - [PacSun’s Annual Report and Quarter: Improvement, But More Needed](https://jeffharbaugh.com/pacsuns-annual-report-and-quarter-improvement-but-more-needed/) - PacSun’s 2013 fiscal year ended February 1, 2014, and that’s the year we’re discussing here. You can review the 10K yourself here. I’d like to start with CEO Gary Schoenfeld’s mention in the conference call of the “…four key pillars of our overall strategy.” They are, he says: “…our commitment to showcasing distinct brand identities derived from the - [More of the Same: Tilly’s Annual Report](https://jeffharbaugh.com/more-of-the-same-tillys-annual-report/) - There is getting to be a certain sameness to all the reports I read from the retailers in our space. It’s not that Tilly’s has done anything bad, though their results aren’t good. It’s just that we seem to be in an environment where it’s hard to do something really distinguishing as a retailer. Tilly’s store numbers - [A & F’s Annual Report: Like Other Teen Retailers, But Not.](https://jeffharbaugh.com/a-fs-annual-report-like-other-teen-retailers-but-not/) - As I just noted in my last post on Tilly’s and expect to note as I get to other retailers, the teen market is sort of lousy right now. People seem a bit perplexed as to why it’s fallen so hard, but I believe it’s as simple as a lack of money and jobs for teens. - [The Buckle Annual Report: Less Online, More Brick and Mortar Focus?](https://jeffharbaugh.com/the-buckle-annual-report-less-online-more-brick-and-mortar-focus/) - There’s a lot I like about The Buckle. I don’t find time to cover them every quarter, but whenever I visit one of their 450 stores, I am impressed with how they’ve merchandised their owned (34% of revenue) with purchased brands together. My sense is that they give credibility to the brands they carry, not the - [SPY’s Results for the Quarter; Operating Income Rises, but Interest Expense is a Killer.](https://jeffharbaugh.com/spys-results-for-the-quarter-operating-income-rises-but-interest-expense-is-a-killer/) - As usual, SPY had the courtesy to file its 10Q with the SEC about the same time they did their conference call, making my job easier and my analysis more timely. You can see the 10Q here. Sales for the quarter ended March 31 rose 2% from $9 to $9.2 million compared to the same quarter - [Skullcandy’s First Quarter: Signs That the Strategy is Taking Hold](https://jeffharbaugh.com/skullcandys-first-quarter-signs-that-the-strategy-is-taking-hold/) - The improvement in Skull’s financials for the quarter ended March 31 is clear on both the income statement and balance sheet, though the company still reported a loss. You can see the 10Q here. Skull, as you may recall, is focused on building the brand by aggressively reducing off price sales, being cautious with distribution, taking - [“We’ll Go Anywhere Our Customers Give Us Permission to Go;” Zumiez’s Quarterly Report](https://jeffharbaugh.com/well-go-anywhere-our-customers-give-us-permission-to-go-zumiezs-quarterly-report/) - A few reports ago, I opined that while Zumiez owned the action sports space in the mall, the relatively small size of that niche and the evolution of the market to youth culture or fashion or whatever you want to call it was going to require Zumiez to move beyond it to achieve their growth - [Can the Golden State of Mind Take Hold? PacSun’s First Quarter](https://jeffharbaugh.com/can-the-golden-state-of-mind-take-hold-pacsuns-first-quarter/) - Though PacSun still reported a loss in the quarter ended May 3, the income statement improved compared to the same quarter last year. Sales were up 2.9% from $166.4 to $171.1 million. The increase was the result of comparable store sales being up 3% compared to last year’s quarter. The average sales transaction was up 6%, though the - [Quiksilver’s Quarter: The Impact of Market Trends](https://jeffharbaugh.com/quiksilvers-quarter-the-impact-of-market-trends/) - In the quarter ended April 30, Quiksilver’s revenue fell 10.4% from $456 to $408 million. The net loss grew from $32.4 to $53.1 million. Discontinued product lines contributed $9 million to revenue in last year’s quarter, but none in this year’s. A year ago, they also owned Mervin and the Hawk brand. I’m a little surprised they didn’t mention - [What This Industry Needs is More Sunglass Brands!](https://jeffharbaugh.com/what-this-industry-needs-is-more-sunglass-brands/) - Well, you have to admit I got your attention, and that title is way more intriguing than “What I Learned at Agenda.” I never thought I’d say this about any category, but I think there may have been more sunglass than shoe brands. And if case anybody is actually confused, that title is written in the full - [Volcom’s New Positioning and Kering’s Half Year Results](https://jeffharbaugh.com/volcoms-new-positioning-and-kerings-half-year-results/) - Back on July 9th, Volcom presented a new brand vision to a group of 100 retailers and media people. I wasn’t invited so all I know is what was reported in Transworld and a little that some people have told me. Last week Kering, Volcom’s parent company, released its results for the 6 month ended June - [All About Outdoor & Action Sports: VF’s Quarter](https://jeffharbaugh.com/all-about-outdoor-action-sports-vfs-quarter/) - That the outdoor and action sports segment (OAS) of VF’s business is critical to its overall success is pretty obvious from the numbers. Total company revenue for the quarter rose 8% from $2.22 to $2.4 billion. OAS revenue rose 16% from $1.1 to $1.28 billion. OAS generated more than 53% of the quarter’s total revenues. OAS revenue experienced “…double-digit - [Thoughts on the Omnichannel; Decker’s June 30 Results and Sanuk’s Impact](https://jeffharbaugh.com/thoughts-on-the-omnichannel-deckers-june-30-results-and-sanuks-impact/) - Deckers is mostly of interest to us because of their ownership of Sanuk. We’ll talk about how Sanuk is doing. But Deckers management say some interesting, perhaps even insightful, things about online business and the omnichannel and I want to focus on those as well. Let’s start by getting some of the numbers out of the way. In - [Maybe a Public Company Can Actually Pull This Off! Skullcandy’s June 30 Quarter](https://jeffharbaugh.com/maybe-a-public-company-can-actually-pull-this-off-skullcandys-june-30-quarter/) - I’ve written probably way more times than you want to hear about how it’s been a good time to focus on brand building, distribution, and gross margin dollars rather than generating big sales increases that can only be realized in the short term with resulting long term damage to a business. And I’ve sympathized with - [Billabong’s Annual Results: Progress on a Long Road](https://jeffharbaugh.com/billabongs-annual-results-progress-on-a-long-road/) - As I recall, the report I wrote on Billabong last year broke the 4,000 word barrier. I’m probably the only person who read the whole thing. But there was chaos and uncertainty last year and it seemed necessary to explain everything that was going on. As of this year’s end at June 30, there’s still chaos and - [Globe’s Results for the Year: Poor Bottom Line, But Operating Progress](https://jeffharbaugh.com/globes-results-for-the-year-poor-bottom-line-but-operating-progress/) - While I was buried under Billabong’s annual report, Globe also filed theirs for the year ended June 30. Globes proprietary brands, in case you don’t remember, include Globe, Callaz, Dwindle, Enjoi, Blind, Almost, Cliché, Darkstar, Tensor, Speed Demons, Dusters, and FXD. Its licensed brands include Stussy and Vision Streetwear. For the year, Globe’s revenues rose 24% - [The Issue Continues to be Competitive Positioning: PacSun’s Quarter](https://jeffharbaugh.com/the-issue-continues-to-be-competitive-positioning-pacsuns-quarter/) - Back in its glory days, PacSun was a destination for its young customers and expanded to around 900 stores. It lost its way for reasons that included too much growth and overexposure, unattractive stores, problems getting the right product to the right stores at the right time, thoughtful, better positioned competitors, and a weak economy. - [Quik’s July 31 Quarter: Restructuring Results Slow to Appear.](https://jeffharbaugh.com/quiks-july-31-quarter-restructuring-results-slow-to-appear/) - You know, maybe it’s a delusion, but an awful lot of corporate reports for the companies I follow are starting to sound the same. I need to read something else. Most of them say some variation of we’re trying to figure out how to integrate brick and mortar with online, sales growth is hard to - [Zumiez’s Quarter and Omnichannel Insights](https://jeffharbaugh.com/zumiezs-quarter-and-omnichannel-insights/) - Zumiez reported a 12% increase in revenue for the quarter that ended August 2nd to $177 million from $158 million in the same quarter they last year. Their net income was up 57.3% from $4.74 to $7.46 million. Naturally, with that kind of good result, the stock fell 18.8% the next trading day from $32.4 ## Pages - [Home](https://jeffharbaugh.com/) - My experience includes international banking, corporate development, strategic consulting and turnaround management. I received my MBA in finance and international business from The Wharton School. I stumbled into the action sports business in 1990 as snowboarding was taking off. I was a manager, investor and consultant in what's now the active outdoor business for 30 - [Links](https://jeffharbaugh.com/resources/) - This is a list of publications I subscribe to. They cover finance, investing, history, economics and politics. Some I pay for as noted. Others are free. Some should be of interest to you. You won't find most of this in the mainstream media. The Rational Optimist Society focuses on all the good things happening - [Books Worth Your Time](https://jeffharbaugh.com/suggested-reading/) - Below is a selection of books I’ve come across over the years that have informed my thinking not just about business, but about the world, history, and my own preconceptions (which I try to be aware of so I can control). They aren’t listed in any particular order. The more I read, the more I - [Articles Worth a Read](https://jeffharbaugh.com/articles-that-make-you-think/) - These are articles that say something important I wish I'd written. They will not typically be from what you'd consider mainstream sources. Some are short and easy reads. Some- are not. Be assured that I am not including the long, denser ones just to torture you. If I didn't think them worth your time, they - [Short Takes: Charts, Graphs, Quotes](https://jeffharbaugh.com/short-takes-charts-graphs-quotes/) - These are items from all kinds of sources that may or may not include a comment from me. Depends on whether I think they are self explanatory. Typically, they will have amused, surprised or informed me. They are all relevant to our current economic and societal circumstances. They made me think, caused me to change - [The Market Watch Column](https://jeffharbaugh.com/market-watch-column/) - Old and new ones are all here. If you don't want to start back in 1995 and read all 800 plus, I'll understand. I'm not doing that either. If you should read an old one, let me know how well it has held up. Thanks for reading. Reset Loading… Loading… Loading… Read More Previous 1 - [Contact](https://jeffharbaugh.com/contact/) - I enjoy hearing from you, even when you disagree. The exchange means that I learn something, too. Leave a comment on any of my posts to contact me directly. Email: jeff@jeffharbaugh.comOffice: (425) 698-7564 If you prefer, you can also use the form below to get in touch with Jeff. - [Contact Form](https://jeffharbaugh.com/contact-form/) - [Subscribe](https://jeffharbaugh.com/subscribe/) - Get notified of new posts - [Privacy Policy](https://jeffharbaugh.com/privacy-policy/) - Who we are Our website address is: https://jeffharbaugh.com. Comments When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection. An anonymized string created from your email address (also called a hash) may be provided - [About](https://jeffharbaugh.com/about-2/) - About Us Independent business channel dedicated to providing comprehensive news and updates. Jeff has been active in the action sports, outdoor and youth culture industries since 1991 as a manager, consultant, analyst and investor. He received his MBA in finance and international business from the Wharton School and spent some years in international banking, corporate - [Contact Us](https://jeffharbaugh.com/contact-us/) - Contact News Tips Condimentum nullam donec et interdum et bibendum et quam magna ut at netus neque id lectus neque iaculis sit penatibus amet viverra aliquet quisque purus praesent. Please drop us a note at tips@example.com Arcu commodo, blandit diam condimentum dolor cras penatibus viverra egestas. Customer Service customerservice@example.com +1 123-456-7890 Advertising & SponsorshipsEget massa ## Categories - [Quiksilver](https://jeffharbaugh.com/category/quiksilver/) - [Billabong](https://jeffharbaugh.com/category/billabong/) - [Zumiez](https://jeffharbaugh.com/category/zumiez/) - [Trade Shows](https://jeffharbaugh.com/category/trade-shows/) - [Intrawest](https://jeffharbaugh.com/category/intrawest/) - [Globe](https://jeffharbaugh.com/category/globe/) - [Nike](https://jeffharbaugh.com/category/nike/) - [Mervin Manufacturing](https://jeffharbaugh.com/category/mervin-manufacturing/) - [Skullcandy](https://jeffharbaugh.com/category/skullcandy/) - [Tilly's](https://jeffharbaugh.com/category/tillys/) - [Dick's Sporting Goods](https://jeffharbaugh.com/category/dicks-sporting-goods/) - [Spy](https://jeffharbaugh.com/category/spy/) - [Buckle](https://jeffharbaugh.com/category/buckle/) - [Sport Chalet](https://jeffharbaugh.com/category/sport-chalet/) - [Uncategorized](https://jeffharbaugh.com/category/uncategorized/) - [Abercrombie & Fitch (Hollister)](https://jeffharbaugh.com/category/abercrombie-fitch-hollister/) - [Deckers (Sanuk)](https://jeffharbaugh.com/category/deckers-sanuk/) - [Pacific Sunwear (PacSun)](https://jeffharbaugh.com/category/pacific-sunwear-pacsun/) - [Genesco (Journey's)](https://jeffharbaugh.com/category/genesco-journeys/) - [Jarden (K2, Ride)](https://jeffharbaugh.com/category/jarden-k2/) - [Kering (Volcom)](https://jeffharbaugh.com/category/kering-volcom/) - [VF Corp. (Vans, Reef, North Face)](https://jeffharbaugh.com/category/vf-corp-vans/) - [North Face](https://jeffharbaugh.com/category/north-face/) - [Vail Resorts](https://jeffharbaugh.com/category/vail-resorts/) - [Surfing](https://jeffharbaugh.com/category/surfing/) - [Fox Head](https://jeffharbaugh.com/category/fox-head/) - [Amer Sports](https://jeffharbaugh.com/category/amer-sports/) - [The Sports Authority](https://jeffharbaugh.com/category/the-sports-authority/) - [SurfStitch](https://jeffharbaugh.com/category/surfstitch/) - [Emerald Expositions](https://jeffharbaugh.com/category/emerald-expositions/) - [Hibbett Sports](https://jeffharbaugh.com/category/hibbett-sports/) - [Big 5](https://jeffharbaugh.com/category/big-5/) - [Volcom](https://jeffharbaugh.com/category/volcom/) - [Kathmandu](https://jeffharbaugh.com/category/kathmandu/) - [Resorts](https://jeffharbaugh.com/category/resorts/) - [Inflation](https://jeffharbaugh.com/category/inflation/) - [Short Takes: Charts, Graphs, Quotes](https://jeffharbaugh.com/category/quotes-and-charts/) - [Articles Worth a Look](https://jeffharbaugh.com/category/articles-make-you-think/) - [Macroeconomics](https://jeffharbaugh.com/category/macroeconomics/) - [Economic History](https://jeffharbaugh.com/category/economic-history/) - [Retail](https://jeffharbaugh.com/category/retail/) - [Ecommerce](https://jeffharbaugh.com/category/ecommerce/) - [Finance and Funds Flow](https://jeffharbaugh.com/category/finance-and-funds-flow/) - [Industry Evolution](https://jeffharbaugh.com/category/industry-evolution/) - [Pandemic](https://jeffharbaugh.com/category/pandemic/) - [Snowsports](https://jeffharbaugh.com/category/snowsports/) - [GoPro](https://jeffharbaugh.com/category/gopro/) - [Branding](https://jeffharbaugh.com/category/branding/) - [Skateboarding](https://jeffharbaugh.com/category/skateboarding/) - [Snowboarding](https://jeffharbaugh.com/category/snowboarding/) - [Claire's Stores](https://jeffharbaugh.com/category/claires-stores/) - [Financial Management](https://jeffharbaugh.com/category/financial-management/) - [Rip Curl](https://jeffharbaugh.com/category/rip-curl/) - [Nordstrom](https://jeffharbaugh.com/category/nordstrom/) - [Crocs](https://jeffharbaugh.com/category/crocs/) - [Lululemon](https://jeffharbaugh.com/category/lululemon/) - [Acquisitions](https://jeffharbaugh.com/category/acquisitions/) - [Ride Snowboards](https://jeffharbaugh.com/category/ride-snowboards/) - [Morrow Snowboards](https://jeffharbaugh.com/category/morrow-snowboards/) - [General Management](https://jeffharbaugh.com/category/general-management/) - [Marketing](https://jeffharbaugh.com/category/marketing/) - [Skechers](https://jeffharbaugh.com/category/skechers/) - [Aeropostale](https://jeffharbaugh.com/category/aeropostale/) - [Hot Topic](https://jeffharbaugh.com/category/hot-topic/) - [Strategy](https://jeffharbaugh.com/category/strategy/) - [Market Watch](https://jeffharbaugh.com/category/market-watch/) ## Tags - [Amazon](https://jeffharbaugh.com/tag/amazon/) - [Popups](https://jeffharbaugh.com/tag/popups/) - [Sephora](https://jeffharbaugh.com/tag/sephora/) - [Leases](https://jeffharbaugh.com/tag/leases/) - [3D Printing](https://jeffharbaugh.com/tag/3d-printing/) - [Nordstroms](https://jeffharbaugh.com/tag/nordstroms/) - [Free Trade](https://jeffharbaugh.com/tag/free-trade/) - [Demographics](https://jeffharbaugh.com/tag/demographics/) - [Advertising](https://jeffharbaugh.com/tag/advertising/) - [Great Recession](https://jeffharbaugh.com/tag/great-recession/) - [Longboards](https://jeffharbaugh.com/tag/longboards/) - [Technology](https://jeffharbaugh.com/tag/technology/) - [Brand Management](https://jeffharbaugh.com/tag/brand-management/) - [Minimum wage](https://jeffharbaugh.com/tag/minimum-wage/) - [GDP](https://jeffharbaugh.com/tag/gdp/) - [Bankruptcy](https://jeffharbaugh.com/tag/bankruptcy/) - [One Wheel](https://jeffharbaugh.com/tag/one-wheel/) - [Store brands](https://jeffharbaugh.com/tag/store-brands/) - [Kohls](https://jeffharbaugh.com/tag/kohls/) - [Millennials](https://jeffharbaugh.com/tag/millennials/) - [Federal Reserve](https://jeffharbaugh.com/tag/federal-reserve/) - [Sneakers](https://jeffharbaugh.com/tag/sneakers/) - [Blue Montgomery](https://jeffharbaugh.com/tag/blue-montgomery/) - [Berrics](https://jeffharbaugh.com/tag/berrics/) - [Mobile](https://jeffharbaugh.com/tag/mobile/) - [Altamont](https://jeffharbaugh.com/tag/altamont/) - [Hybrid](https://jeffharbaugh.com/tag/hybrid/) - [Port Strike](https://jeffharbaugh.com/tag/port-strike/) - [Peak Resorts](https://jeffharbaugh.com/tag/peak-resorts/) - [Rent](https://jeffharbaugh.com/tag/rent/) - [Malls](https://jeffharbaugh.com/tag/malls/) - [Labor Market](https://jeffharbaugh.com/tag/labor-market/) - [Acquisitions](https://jeffharbaugh.com/tag/acquisitions/) - [Acquisition](https://jeffharbaugh.com/tag/acquisition/) - [Apparel](https://jeffharbaugh.com/tag/apparel/) - [Sears](https://jeffharbaugh.com/tag/sears/) - [Tommy Hilfiger](https://jeffharbaugh.com/tag/tommy-hilfiger/) - [K Swiss](https://jeffharbaugh.com/tag/k-swiss/) - [OTZ](https://jeffharbaugh.com/tag/otz/) - [Marketing](https://jeffharbaugh.com/tag/marketing/) - [Zara](https://jeffharbaugh.com/tag/zara/) - [Strategy](https://jeffharbaugh.com/tag/strategy/) - [IPO](https://jeffharbaugh.com/tag/ipo/) - [SIA](https://jeffharbaugh.com/tag/sia/) - [Snowsports Industry of America](https://jeffharbaugh.com/tag/snowsports-industry-of-america/) - [Foreign Exchange](https://jeffharbaugh.com/tag/foreign-exchange/) - [Nau](https://jeffharbaugh.com/tag/nau/) - [Inventory](https://jeffharbaugh.com/tag/inventory/) - [Heinz](https://jeffharbaugh.com/tag/heinz/) - [WeSC](https://jeffharbaugh.com/tag/wesc/) - [Leisure Group](https://jeffharbaugh.com/tag/leisure-group/) - [Snowboard Connection](https://jeffharbaugh.com/tag/snowboard-connection/) - [SIMA](https://jeffharbaugh.com/tag/sima/) - [Distribution](https://jeffharbaugh.com/tag/distribution/) - [Footwear](https://jeffharbaugh.com/tag/footwear/) - [Chinese production](https://jeffharbaugh.com/tag/chinese-production/) - [Debt](https://jeffharbaugh.com/tag/debt/) - [Greece](https://jeffharbaugh.com/tag/greece/) - [IASC](https://jeffharbaugh.com/tag/iasc/) - [BRA](https://jeffharbaugh.com/tag/bra/) - [Customer Service](https://jeffharbaugh.com/tag/customer-service/) - [Retail strategy](https://jeffharbaugh.com/tag/retail-strategy/) - [Consolidation](https://jeffharbaugh.com/tag/consolidation/) - [Core](https://jeffharbaugh.com/tag/core/) - [New Brands](https://jeffharbaugh.com/tag/new-brands/) - [Cash Management](https://jeffharbaugh.com/tag/cash-management/) - [Company Stores](https://jeffharbaugh.com/tag/company-stores/) - [Scuba](https://jeffharbaugh.com/tag/scuba/) - [Big Box](https://jeffharbaugh.com/tag/big-box/) - [China](https://jeffharbaugh.com/tag/china/) - [Retention](https://jeffharbaugh.com/tag/retention/) - [Buy/sell cycle](https://jeffharbaugh.com/tag/buy-sell-cycle/) - [Cash flow](https://jeffharbaugh.com/tag/cash-flow/) - [Sell your business](https://jeffharbaugh.com/tag/sell-your-business/) - [Skate shoes](https://jeffharbaugh.com/tag/skate-shoes/) - [Tariffs](https://jeffharbaugh.com/tag/tariffs/) - [Artificial Intelligence](https://jeffharbaugh.com/tag/artificial-intelligence/) - [Turnarounds](https://jeffharbaugh.com/tag/turnarounds/) - [Inflation](https://jeffharbaugh.com/tag/inflation/) - [interest](https://jeffharbaugh.com/tag/interest/) - [Ukraine](https://jeffharbaugh.com/tag/ukraine/) - [Macroeconomics](https://jeffharbaugh.com/tag/macroeconomics/) - [stock market](https://jeffharbaugh.com/tag/stock-market/) - [Energy](https://jeffharbaugh.com/tag/energy/) - [investing](https://jeffharbaugh.com/tag/investing/) - [AI](https://jeffharbaugh.com/tag/ai/) - [Iran](https://jeffharbaugh.com/tag/iran/) - [Employment](https://jeffharbaugh.com/tag/employment/) - [History cycles](https://jeffharbaugh.com/tag/history-cycles/)