MOSS ADAMS CAPITAL: Apparel and foowear market monitor highlights notable deals, stock prices and results.
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I went to the Volcom shareholder meeting Tuesday to hear the company's presentation and to see how Volcom executives would dress this year. They always wear matching outfits at the meeting.Volcom CEO Richard Woolcott, Electric Visual's
First, a few highlights from the presentation. CFO Doug Collier discussed the company's growth over the last 18 years, noting that Volcom's first year of full revenue in 1992 totaled $2,602. In fiscal 2008, sales reached $334 million.
Richard talked about how the company handled the recession last year. He described the challenges of the abrupt switch in the environment, and that the company has done a good job riding through the economic storm. Volcom kept fighting, he said, and in the end it has been a great experience. Volcom and its executives have matured as a result, he said.
Richard also reviewed Volcom's key accomplishments for 2008. Volcom acquired Electric, its Japanese distributor and Laguna Surf & Sport's two stores; had its first full year of operations with its Europe division in-house; expanded Volcom-owned stores to 10; maintained its financial health; and weathered the economic storm.Richard with his father and
A theme around Volcom headquarters, Richard said, is "Keep your eye on the Stone," which means keeping your eye on the fundamentals such as the Volcom brand and shipping great product on time. It's a play on a similar saying Richard's father, René, used to tell Richard when Volcom was starting out: "Keep your eye on the sparrow." It was a reminder to always be focused on the business fundamentals, like inventory, balance sheets, etc.
Another interesting note popped up during the presentation about the sports Volcom is involved with. Volcom has been entering the motocross arena in the last year, and now sponsors some motocross athletes.
Looking forward, Richard said that visibility remains limited. Accounts are challenged to project sales and there's a low risk tolerance at retail. But Volcom is seeing some signs of optimism.
Expense management is also a core focus going forward, he said.
In the U.S., Volcom's goal is to keep its current distribution healthy and support core stores with product presentations, merchandising efforts and marketing. And, to stay on the road and be in constant communication with retailers.
In Europe, the goal is to capitalize on Volcom's brand awareness. The company will monitor the business environment and evaluate distribution opportunities. The company has taken direct control of its United Kingdom business and has opened a Volcom store in London.
In the Pacific Rim, the integration of the former Japanese distributor into Volcom has gone well, and the company is strengthening the infrastructure there, including adding some employees. Volcom is working on fine tuning the product and pricing for the Japanese market. In Australia, a key Volcom executive has been working with the licensee there for a year and the company plans to continue working closely with that group.
About those outfits: The shirts are from Volcom's Stone Age line and inspired by Volcom skater Jake Duncombe, who likes Aloha shirts.Volcom's executive team, L-R: Jeff Roberts, VP of retail; Jason Steris, president;