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Tiffany Montgomery
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DC apparel moving into department stores

By Tiffany Montgomery
March 07, 2008 10:08 AM

DC Shoes is bucking the current macro economic trends, according to Quiksilver executives.

During a conference call today discussing Quiksilver's first quarter results, Quiksilver Americas President Marty Samuels said DC has some "mojo" happening and has been immune to the economic slowdown.

DC and department stores: The company expects significant growth in DC apparel and accessories as the brand moves into department stores. DC is also seeing growth in this category at the core and specialty level.

DC and PacSun: While the impact of the loss of shoe sales to PacSun will be "significant," Samuels said, he believes one-half of the loss will be made up by increased sales of apparel and accessories to PacSun. Some of the balance will be made up by more footwear orders in the core markets and specialty stores. Some competitors of PacSun at malls are viewing PacSun's decision to drop shoes as an opportunity, Samuels said. DC's move into new specialty and department store channels with apparel will make up the rest.

DC earnout: Quiksilver said it will pay $30 million to fund the final portion of DC's earnout from the acquisition, to buy a retail store in Australia and purchase additional interest in its joint venture in Brazil.


Other Quiksilver news


New women's line: The company is "very pleased" with the response to the fall line, said Steve Tully, President of Quiksilver brands in Americas. The line is selling into existing top surf and specialty accounts and reaching new channels of key women's boutiques. Nordstrom is on board, and they are "close" with Macy's. Tully said Macy's may create a new department within its stores to serve this 18 to 24-year-old young contemporary market.

Cost cutting
: Quiksilver is cutting expenses by freezing open positions, hiring very selectively for key positions, reducing travel expenditures, eliminating redundancies in global marketing and slowing retail growth to preserve capital. The company is not going to stop store openings because it believes in the strategy long term, but will be more cautious. From the end of the first quarter last year to the end of the first quarter last year, the company opened 127 stores. This fiscal year, Quiksilver will open approximately 50.

Rossignol: The company said it has had significant interest from strategic and financial players interested in buying Rossignol.

Spring: So far, the response to Quiksilver and Roxy spring lines has been good and the color trend is driving business.

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