Job losses on cards as Deckers closes stores and restructures brands
Footwear group Deckers Brands has announced store closures and a "streamlining of operations" in a bid to save $35 million per year and improve returns for shareholders.
It reported a slight uplift in sales for the quarter that ended on December 31, 2015 but warm weather stymied sales for its winter-focused collections.
Revenues for its brands – which include UGG as well as outdoor-focused Teva and Sanuk – increased 1.4% to a record $795.9 million.
However, CEO Angel Martinez said weak store traffic across retail pressured demand. "While we have made significant progress diversifying our brands and product lines and transforming our organisation over the past several years, we recognize the need to accelerate elements of our long-term strategy.
“To do this, we are streamlining our organisation so we can dedicate more resources to our largest market opportunities.
“We are targeting approximately $35 million in annualised run rate expense savings from office consolidations, realignment of our brand management, and select retail store closings. We plan to invest approximately $10 million of this savings back into the business. We are confident these changes will increase profitability and improve shareholder returns."
Deckers is moving the Sanuk brand's operations to its global headquarters in Goleta and closing the Sanuk office in Irvine, California. Deckers is also closing the Ahnu office outside San Francisco as it “seeks strategic alternatives” aimed at optimizing the value of the brand.
The groupp is realigning across two groups, Fashion Lifestyle and Performance Lifestyle. The Fashion Lifestyle group will encompass UGG and Koolaburra brands. The Performance Lifestyle group will house the Teva, Sanuk and HOKA One One brands.
The company has identified 20 retail stores that are candidates for closure and is engaging a retail consulting firm to assist in implementing additional retail operational improvements.
