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Details on Industry Insight.
Orange 21, the parent company of Spy Optic, released third quarter earnings Monday afternoon.
We talked with President Michael Marckx, who takes on the CEO role Dec. 15, about the results.
First, here’s a summary of the numbers:
Net sales: up 33% to $9.2 million
Net loss: grew to $3 million vs. a net loss of $900,000 the same period last year. The company attributed the increased loss to getting rid of excess inventory from licensed brands and increased sales and marketing spending on the Spy brand.
Click here to read the entire press release.
Here are some highlights from my phone conversation with Marckx yesterday. For a more in-depth interview with Marckx about plans for Spy in our Executive Edition, click here.
The cool thing is that our core Spy products, the things that matter most to our long-term success … did well.
Wholeheartedly yes, we have funding to do that.
Not only do we have the funding and the board is backing every dime that we are spending, we’ve done some things with our lenders and our factories to ensure the liquidity stuff that plagued the company is being mitigated for 2012. We are really confident with the cash issue.
On the business side, we are reducing or getting rid of inventories of the licensed brands. Those products and inventory are now being moved, and at some point in the near future we won’t be saddled with the stuff, and everything will be related to the Spy brand.
The company was doing a good job making product in Italy, we had good relationships in China. While the company made really good products, everything else fell short. The marketing had no point of view - now we are marketing. The brand resonance wasn’t there.
On the operational side of things, the company was in survival mode and didn’t invest. Short-term thinking kept from being forward thinking.
When you are in survival mode, you are not so much concerned about wowing people. You are thinking about how not to spend, how to cut costs and stay alive. They were able to keep the company alive, and now we can think about an exciting future.
The Spy brand is unleashing a new campaign that will move the needle for the brand. For those that are still skeptical, what we are doing with both product and marketing will hold some sway, I believe.
Down the line, we have tech and lens stories coming out, that I am most excited about. We are inventing something innovative in the eyewear business.