The Sweet Smell Of Success

April 12, 2006
Quiksilver Inc.: Sports apparel manufacturer hopes its venture into the fragrance market and recent acquisitions key further growth.

A sweat-soaked day in the sun has been known to leave athletes a little malodorous. Huntington Beach, Calif., sports apparel manufacturer Quiksilver Inc. is banking that those same active people who purchase their outdoor wear will spend money on smelling good with its new fragrance line.

Quiksilver is widely known for its surfing, skateboarding and snowboarding apparel lines. Some of the company's more popular brands include DC Shoes, Hawk, Quiksilver and Roxy. Now, the company is entering into the fragrance and skincare market with Inter Parfums SA, the Paris-based subsidiary of Inter Parfums Inc.

Quiksilver signed an agreement effective through December 2017 with Inter Parfums to produce a line of fragrance, skincare, suncare and other related products under the Roxy brand name and suncare and related products under the Quiksilver brand, the companies announced in a joint statement on March 27. The Roxy fragrance family is the first product line scheduled to be introduced with an expected release date of late 2007.

Quiksilver Inc.
At A Glance

Quiksilver Inc.
Huntington Beach, Calif.
Primary Industry: Apparel
Number of employees: 4,350
2004 In Review
Revenue: $1.3 billion
Profit Margin: 6.4%
Sales Turnover: 1.3
Inventory Turnover: 4.2
Revenue Growth: 29.9%
Return On Assets: 11.5%
Return On Equity: 18.2%
The Roxy and Quiksilver brand names were chosen for the fragrance and suncare products because they represent style and outdoor activities respectively. "With the signing of the license agreement with Inter Parfums, we are adding a new dimension to our strategic vision for our brands, which truly have come to represent a global lifestyle for youth and outdoor sports," said Quiksilver President Bernard Mariette. "Roxy, which has always stayed true to its roots in boardriding, has a high level of authenticity as a sports-inspired brand but with a very feminine expression of style. . . . Similarly, we believe that the Quiksilver brand lends itself to a variety of personal care products, particularly in the suncare category, that we expect to be well received."

Quiksilver's new product announcement comes on the heels of a successful 2006 first quarter. Company profits grew 31% from first-quarter 2005 figures and revenue increased 58% to $541.1 million from $342.9 million during the year-ago period.

The company adjusted quarterly expectations to reflect improved visibility on the timing of revenues and expenses for its newly acquired Rossignol and Cleveland Golf businesses. Quiksilver now expects to earn 6 cents per share versus its previous projection of 17 cents per share. Quiksilver raised its third-quarter expectations to approximately 7 cents per share from 3 cents per share. In the fourth quarter, the company expects revenues between $710 million and $715 million, 1% higher than previous guidance.

Meanwhile, the company has received worldwide publicity for sponsoring athletes who won 36 medals in the 2006 Torino Winter Olympics. Quiksilver/Rossignol represented 165 athletes in 26 countries. Quiksilver executives view the global attention as an opportunity to further expose their brands.

"Passion for sport and the support and sponsorship of athletes are key components of who we are and what we do," said Quiksilver President Bernard Mariette in a March statement. "We intend to take our love for the outdoors and the lifestyles associated with a whole range of outdoor sports and create a message and a vehicle for consumers to share in that spirit. In doing so, we believe that we will heighten our growth prospects and add increased value to our customers, business partners and shareholders around the world."

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