US: Quiksilver to divest more assets
Earlier this year, Quiksilver unveiled a multi-year plan to try to return to profit
US surfwear brand Quiksilver has revealed plans to divest more of its assets as it looks to boost earnings and focus on its core brands.
The company will look to sell its Surfdome Shop, Hawk Designs and Moskova brands, it revealed, as it refocuses its strategy on its top-selling brands.
Quiksilver said it would exit the businesses as it completed the sale of its Mervin Manufacturing snowboard subsidiary for US$58m, purchased the minority interests in its joint ventures in Mexico and Brazil, and established a EUR60m European credit facility with Eurofactor.
Earlier this year, the company unveiled a multi-year plan to try to return to profit by focusing on its three core brands - Quiksilver, Roxy and DC - globalising key functions and reducing costs.
In its third-quarter in September, the group saw net income fall to $2m against $13m in the prior year period, while revenues fell 3%.
The company has already divested several non-core brands such as VSTR and Summer Teeth, and discontinued the Quiksilver women's product line.
In its announcement yesterday (3 December), Quiksilver CEO Andy Mooney said these latest transactions represent "additional milestones" in executing its multi-year profit improvement plan.
"We used a portion of the Mervin proceeds to invest in our high-growth subsidiaries in Mexico and Brazil, and we now own 100% of our operations in both countries. The remaining proceeds from the Mervin sale, combined with the new European credit facility, enhance our financial flexibility and add greater stability to our liquidity."
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