Following Kering's separation from Puma and Stella McCartney, the French group led by François-Henri Pinault has now also sold Volcom, completing the disposal of all its sports and lifestyle brands. Kering, which had already indicated its intentional to divest the Californian surf, skate and snowboard label a year ago, has sold its intellectual property rights to the Authentic Brands Group (ABG), which had already bought Tretorn from the group in 2015. The terms of the deal were not disclosed.
Following a well-tested business model, ABG has formed a new company to operate Volcom, called Liberated Brands, in which it will hold a minority stake. Todd Hymel, Volcom's chief executive, and the management team around him will hold the majority of the shares. Hymel, a former official at KPMG, joined Kering in 2012 to run Volcom and Electric, a sister brand of sunglasses that has since been sold as well. He moved from France to the U.S. three years later to run the two brands out of their head office.
Hymel and Liberated Brands will maintain Volcom's operations in the U.S., France, Japan, and Australia. They will continue to oversee product development, athlete marketing and the company's retail and wholesale businesses. ABG said it would contribute its expertise in strengthening brand awareness and business development for Volcom. It will help the brand to better reach out to Millennials and Gen-Z customers with social media marketing and partnerships with key influencers.
ABG also plans to use the specialized retail and wholesale activities of Liberated Brands, represented by a network of almost 100 Volcom stores and distributors in 60 countries, as a platform for the international expansion of complementary ABG brands.
In 2017, the last year for which financial figures are available, Volcom's revenue amounted to €230.2 million, down by 3.2 percent after currency adjustments from the previous year, generating a small operating profit of around €100,000. Since its acquisition by Kering along with Electric in 2011, Volcom's results have grown marginally, partly because of a general trend away from surfwear. While Puma's results have been improving, Kering has preferred to concentrate on its faster-growing, high-margin luxury goods business, with such as Gucci, Saint Laurent and Bottega Veneta.
Founded by Jamie Salter in 2010 and supported by the Leonard Green equity fund, ABG is a brand development, marketing, and entertainment company that already owns about 50 brands – including Spyder, Airwalk, Vision Street Wear, Juicy Couture, Frye, Prince, Hind, and Tretorn – which have 875 partners and a retail presence of nearly 5,000 stores. ABG also owns the brand management rights for Greg Norman, Shaquille O'Neal, Muhammad Ali, Elvis Presley, Bobby Jones and Marilyn Monroe. Last year, ABG acquired Nautica from VF Corp. and made a big incursion into the non-athletic footwear sector with its takeover of the Camuto Group and Nine West (more on this in Shoe Intelligence). Over the last fiscal year, the group achieved aggregate sales of $9.3 billion, half of which came from outside the U.S. The company's current objective is to hit $10 billion by 2020.
