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Steve Tully

Global Product Development and Sourcing Challenges. Steve Tully. President, Quiksilver Brands Quiksilver, Americas. Who We Are.

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Steve Tully

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  1. Global Product Development and Sourcing Challenges Steve Tully President, Quiksilver Brands Quiksilver, Americas

  2. Who We Are With over $2 billion in revenues, we are a global company that designs, markets, sources and distributes apparel, footwear and accessories through our Quiksilver, Roxy and DC brands

  3. The Quiksilver Story: A History of Firsts Birth of the Boardshort Expansion Growth to Modern Era Years: 1969 – 1985 1986 – 1991 1992 – Current KeyThemes: 1992 – Quik Inc. opens first Boardriders Club 1993 – Quik Inc. acquires Raisins 1994 – Quik Inc. introduces Roxy boardshort 1996 – Quik Inc. acquires Mervin Snowboards (Lib Tech and GNU brands) 1999-Quik Inc. moves to HB 2000 – Quik Inc. acquires rights to International Trademarks 2002 – Quik Inc. acquires Ugg Manufacturing 2004 – Quik Inc. acquires DC Shoes 2005 – Quik Inc. acquires Rossignol / Cleveland 2007 – Quik Inc. achieves $2 billion in Sales 2008 – Quik Inc. divests Rossignol / Cleveland 1986 – Quiksilver Inc. IPO 1986 – 1988 Ugg signs licenses in New Zealand, Brazil and South Africa 1990 – Quiksilver, Inc. introduces Roxy brand to surf market 1990 – Kelly Slater signs with Quiksilver(global) 1990 – Quiksilver Inc. introduces denim, starts to manufacture wetsuits 1991 – Quiksilver Inc. acquires Quiksilver Europe 1991 – $100 million in Sales globally 1969 – Alan Green –Ugg manufacturing (QS Australia) introduces first Quiksilver boardshorts 1974 – Quiksilver exported to Hawaii 1976 – Jeff Hakman and Bob McKnight team up to start Quiksilver Inc. (located in Costa Mesa) 1977 – Exports into Japan 1978 – Exports into France 1984 – Ugg (QS Australia) licenses Quiksilver in Europe

  4. Global Leadership Team Americas Marty Samuels President Europe Pierre Agnes President N. Asia Nicolas Giannoli Regional Managing Director S. Asia Craig Stevenson President Bob McKnightCo-Founder, Chairman, CEO and President Joe Scirocco CFO Charlie Exon Chief Administrative Officer Regional Operating Groups Global Brand Direction Craig Stevenson President Randy Hild Executive Vice President Nick Adcock President

  5. Global Retail PresenceAt the end of the Q3, we had 665 shops globally (454 company owned shops, 211 licensed) London, England Beijing, China Park City, UT Paris, France Miami, FL Times Square, NY Downtown Disney Anaheim, CA Las Vegas, NV Shanghai, China

  6. Global Organization Pro forma for the sale of Rossignol

  7. Americas: Overview Established Markets Growing Markets Untapped Opportunities Current Geographic Footprint Characteristics Characteristics Historically, the global design and marketing center Recent growth coming from DC and retail expansion Economic challenges in key markets, particularly California, Florida, Hawaii and Nevada Americas ($1,034mm LTM Sales; 46% Total)

  8. Europe: Overview Europe($942mm LTM Sales; 42% Total) Established Markets Growing Markets Untapped Opportunities Current Geographic Footprint Characteristics Characteristics Premium positioning with strong brand recognition Organic growth and retail expansion Highest gross and operating margin region Challenging European consumer spending environment throughout 2008 South Africa

  9. Asia / Pacific: Overview Established Markets Growing Markets Untapped Opportunities Current Geographic Footprint Characteristics Characteristics Brand heritage in Australia Multiple smaller markets Two regional centers – South Pacific / North Asia Both well-positioned after recent challenges Asia / Pacific ($264mm LTM Sales / 12% Total)

  10. Global Product Development and Sourcing Challenges • For Quiksilver the migration to being a truly global enterprise in the areas of product development and sourcing involves some significant retrofitting! • Current set up has the vast majority of our products developed and sourced regionally Why change this model? • Leverage resources • Leverage buying power • Better leverage in Marketing Challenges include: • Desire/Need for locally relevant products. • Natural resistance to accepting outside designs   • The brands can vary in their marketplace positioning • Roxy is older in Europe • European outerwear business is much more developed as compared to US and Aus.

  11. Global Product Development and Sourcing Challenges, continued • Design and market calendars can vary by region. • Europe brings their spring collections to market a full 2 months ahead of the US    • Australia is in the Southern Hemisphere! • Procurement strategies vary by region   Steps currently underway: • DC  business is set up with one global product development and sourcing team (located in US) • All new product launches or brand extensions start out global with one development/sourcing team • Quiksilver Women’s • Key foundational product categories are moving to collaborative global development: • For the Quiksilver brand, examples include: • Boardshorts • T-Shirts • Footwear • Denim • Technical outerwear.

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