New business info and advice from QCS GRAPHICS, PROCOPIO, SHACC and FSG LAWYERS.
Details on Industry Insight.
The ominous signs of a widespread consumer pullback keep popping up. At the high end, luxury retailer Tiffany & Co. reported disappointing holiday sales and American Express expects delinquencies and late payments to increase. In the middle, Macy's is laying off workers and shuttering stores. At the low end, Target and Kohl's didn't reach holiday targets.
In the action sports world, PacSun and Zumiez, two of the industry's biggest customers, also had disappointing holiday sales.
No wonder industry stocks are getting hammered. Quiksilver closed at $7.63 Friday, down 50 percent from a year ago. Zumiez is trading at $16.89, a 51 percent decline. Volcom closed at $16.29 Friday, down 45 percent from a year ago.
Dave Hollander of Becker Surf said while his internet business was up "nicely," total same-store sales for his six retail locations fell 15 percent.
"I was pretty crushed by the whole deal," he said. Then, he realized it wasn't just his stores. Everybody he talked to was down, from his regular breakfast spot to the hair dresser next door to his friend who owns shoe stores.
Here's the interesting thing. The same stocks that are getting hammered - Quiksilver and Volcom - had the most success in Becker stores this season. Volcom girls did especially well.
"Quiksilver and Volcom just owned it," Dave said. "That's the public telling you something. They had great turns and great margins."
Perhaps the decimated stock prices are more of a global, consumer problem than internal company issues.
Executives in the action sports industry often say the industry is "recession proof" because its consumers are relatively affluent. But the high end is also being hit right now, and it will be interesting to see if the "recession proof" label is still accurate as the year unfolds.