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In 2019, Quiksilver will celebrate 50 years. The iconic brand--founded in Australia and widely associated with Southern California culture--has been through it all as one of the founding members of an industry that, today, has evolved and grown beyond anything that could have been forecasted.
But Quik, like many companies, has faced its fair share of growing pains over the years -- most recently, filing for Chapter 11 for its US operations and undergoing an aggressive global restructuring.
About 18 months later, the company has emerged from a rebuilding phase, which included an overhaul of operations, production, and reorganizing “over-extended retail,” which meant closing a well-known big-box account, according to Oaktree Capital’s David Tanner, who was instrumental in leading this transformation. A corporate name change, from Quiksilver Inc. to Boardriders Inc., was announced in March, coupled with the news of the company’s return to profitability for the first time in years.
To say the metamorphosis was an enormous undertaking is a gross understatement, and Tanner and President Greg Healy have indicated there is still much work to be done. But the tide is turning with early indications of a silver lining, such as positive order book trends for fall, positive comps at full-price retail, and promising long-term growth internationally. The company will close out FY17 with a 7% margin. With those accomplishments under their belt, and an impending 50-year celebration and grand opening of the company’s new Malibu retail location, Tanner and Healy explain what this means for the future.
David Tanner:
We were going through a very intense period for these last 18 months, turning the company around. We've done a ton of work, cleaning up the cost structure and stabilizing the revenue line. We've got the organization pointing in the right direction.
We've built a lot of rigor and discipline into the business, and we are fundamentally in a different place from a performance perspective than where we were five years ago.
This was a company that, for a number of years, was declining at 15% per year, was dramatically unprofitable, and there was no bottom.
Taking it into Chapter 11, we’ve cleaned up the balance sheet, restructured the business, fixed the cost structure, and built the foundation for growth. We’ve taken the business from unprofitable to mid to single digit margins.
We wanted to signify to our employees and to the world that this a different company. It's not the same old Quiksilver, it's a fundamentally different organization in the way it acts, and its performance.
We aren't just one brand as a company, we are three strong brands that all have growth paths. We wanted to embrace all of our brands because they are all important to our future.
It opens the door to the next stage in our company. It signifies the shift from defense to offense, and looking at where we are going. We are looking much more at the market and how we are going to grow the business than we were two years ago. It's a combination of all those factors. It's been talked about for a while and we just felt like it was the time
Greg Healy:
Boardriders Inc. is a name that represents what all the brands under our roof stand for. The essence of our brands is centered around board riding, whether that's on the water, on a skateboard, or on the mountain, so we felt it was necessary to name our company along those lines.
We started along this path about five or six years ago when we launched our first experiential retail store called Boardriders in the Southwest of France, and that concept has spread across the world. We now have 14 of these stores globally, and just announced that we'll soon be opening a new location in Malibu on Pacific Coast Highway. It's been a really successful retail venture for us, and it was just a natural extension that we named the whole company Boardriders.
David:
The stores are very experiential, and are our most profitable doors. They really encapsulate the board riding culture and have become community hubs that people gather in. I think "board riders" just really represents the culture that we serve. It's where the former American Apparel store was located. An iconic location.
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