26/03/2013 | by Youri Barneoud
After we first spoke on Wednesday about these persisting rumours around Quiksilver and the denials published by certain athletes on the team, communication finally came yesterday from the men in charge, long time CEO and Executive Chairman Bob McKnight, and new CEO Andy Mooney:
Focus is a recurring theme that Bob and I see for the company for the foreseeable future. Focus on our key brands, focus on our key athletes, focus on key categories.
In a long and detailed article, Shop-Eat-Surf website clarifies the matter: in fact, the rumours have been so persistent and spread so wide that the two bosses had to speak out and maybe let some of their strategy go along the way. Nevertheless it’s a good news for Quiksilver, their athletes and probably the whole suffering industry, that many of those cuts were, apparently, just rumours, or misinterpretations. “While the company is narrowing its athlete rosters in hopes of significantly elevating the profiles of the athletes it is retaining, it is not abandoning the strategy of athlete sponsorship,” says the duo. Actually the cuts effectively concerns more the surf team, but with a total of 180 paid surfers, Quiksilver is still one of the big sponsors out there. In snow, it has 93 athletes paid on Quiksilver, Roxy and DC, and this is not including the riders sponsored solely by Mervin (Lib Tech and Gnu). And Mooney adds: “What we are doing is narrowing our focus. We have tremendous athletes and they should be household names beyond the core universe and they aren’t because nobody in the industry has the money to activate them. It’s not that I am trying to save money and put it in my back pocket. I plan to reallocate the money and to spend more money on the athletes we have.”
“Narrowing the focus” is always a clever way to put things out in a time of crisis that the whole industry has been suffering from for a few years, especially in the US. But let’s face it: most of the companies out there had to take these kind of measures, and it happens to be not only strategic most of the time, maybe unfortunately! The other argument toward reducing a pro team of riders is to be able to be more reactive when a newcomer pops up with the potential to be a future star, and more generally sign more up-and-coming athletes. Basically, Mooney points out strategic decisions that have been taken by most major brands of the industry in the last couple of years – one of the most shocking being Burton’s decision to simply shut down Forum and its sister brands. But in this time of crisis, what could be unacceptable becomes acceptable in the eye of our (reduced) core public opinion.
But when you announce cuts – although not as dramatic as spread all over the web for the last couple of days – you have to dig up a bit of your global strategy to give your interlocutor a bit of long term vision. That’s how Bob and Andy go deeper talking about the future of those teams and brands. Refocus being the main word here, it seems the two men don’t believe much in a Quiksilver and Roxy skate team, as well as a DC surf team, which in both cases “are not core competencies”. So in between the lines, we can assume that the snow teams of Quiksilver, Roxy and DC should stay pretty much as they are, minus the adjustments that could be made here and there, but without a strategy to cut those teams out.
Further to these clarifications, Andy Mooney also speak about the future of DC women: “It was also wrongly reported this week that DC is exiting women all together. DC will retain its key items business in both footwear and apparel for females”. It also clarifies what is happening with Quiksilver Women and Quiksilver Girls: shut down. “After analyzing the situation, the feeling was that the QSW and Quiksilver Girls product was cannibalizing sales from both Roxy and Quiksilver Men” said Andy. Finally, Kelly Slater’s project VSTR is also being shut down, and Summer Teeth goes back to its originator, Dane Reynolds, who owns it.
All in all, a certain amount of restructuring are in the forecast, just like most companies in this world today, but there appears to be no messing with the snow team for the moment – and another good reason not to follow all the rumors on the web in search of sensational headlines…
To be complete on the matter, here’s the memo that Andy Mooney sent to all the employees:
“I thought it would be helpful to share a few details about recent decisions made, the rationale behind them and the process involved.
I spent my first two weeks on the job with Bob, Charlie and Carol meeting Pierre and his team in Europe, Greg in Japan and Australia as well as Craig and the QAS team in Hong Kong.
Those two weeks were an invaluable learning experience, listening to the challenges and opportunities in each region.
After that I spent a a number of weeks with Rob and the US team.
After 10 weeks of meetings, capped off with a week long executive team meeting in Huntington Beach, Bob, I and the entire management team reached consensus on some key decisions we can communicate today.
Focus is a recurring theme you’ll hear going forward. We must focus on our key brands, key athletes and key categories in order to compete and grow.
Our key brands are Quiksilver, Roxy and DC. Within these brands we must further focus.
To that end, we have made the decision that Quiksilver and Roxy should exit the skate category and that DC should exit the surf category.
Those decisions were relatively easy to make and require little explanation.
A more difficult decision was for Quiksilver to exit women’s. We felt this was vital in order to focus our resources on making Quiksilver in men’s and Roxy in women’s as strong as they can possibly be.
The VSTR line inspired by Kelly Slater is shutting down
The Quiksilver’s women’s and girl’s teams have done an outstanding job generating top line growth.
Some of this growth however has come at the expense of existing business, particularly within our own retail stores.
In order to generate significant future growth, it seemed inevitable that we’d cannibalize Roxy’s business in key categories.
This was a particularly difficult decision as many people have given their all to make Quiksilver women’s a success.
We believe this decision however will allow us to compete more aggressively in men’s with Quiksilver and in women’s with Roxy.
A few web articles over the last few days stated DC was exiting women’s. This is absolutely untrue.
DC will remain in women’s in footwear and apparel. We have always been strong in key items in women’s footwear and apparel at DC and expect to be even more so going forward.
We have made the decision to discontinue VSTR and to pass the management of the Summer Teeth brand back to Dane Reynolds, again, in order to focus on our key brands.
Athletes are vital to the success of Quiksilver, Roxy and DC. We have an amazing roster of talent at the top of their respective sports in surf, snow and skate and an equally amazing depth of talent. We’re committed to maintaining our leadership position in athlete endorsement in action sports.
Our key athletes should be household names, known well beyond the universe of core fans.
Over the last few weeks, we reduced the number of athletes under contract. This was done to free up resources to tell the world about the many great athletes we work with.
Quiksilver for example will continue to have 130 pro surf riders on its team, Going forward, we have the opportunity to tell people how great those athletes really are.
All of these actions are in support of our three strategic goals of strengthening our brands, growing sales and driving operational efficiency.
I hope this puts these recent decisions in some context. We have a great many details to work out and will have more news to share with you in the coming weeks.
I will do my utmost to keep you informed every step of the way.”