Deckers Corporation has been tweaking lately the distribution scheme for its various brands in Europe and in the rest of the world. New distributors have been selected for UGG in Germany and France, for Teva in Panama and for Simple in Italy, Spain and Panama. Wave and Motion will handle UGG’s distribution in Germany. In the UK, AMG Group will be distributing all three brands, and True Alliance will do likewise in Australia. In Japan, Matsui has already been distributing UGG and has plans to distribute Teva and Simple. Deckers expects see benefits from the new distribution network in the 2nd half of 2006 and has confidence in its business outside of the USA, which continues to be led by Colin Clark.
Deckers’ full year sales were up by 23.3 percent to $264.8 million, while net income climbed by 24.7 percent to $31.8 million. Sales of the Teva brand were off by 3.4 percent to $85.2 million and Simple’s sales fell by 23.3 percent to $7.9 million, but these declines were offset by a 47.7 percent increase for UGG to $171.6 million. The Simple brand suffered in the 4th quarter and the year because of a discontinued sheepskin business. Outside of the USA, Teva’s full year sales were $22.7 million, UGG generated $12.34 million and Simple had $0.3 million in sales.
In the 4th quarter the group’s net sales grew by 22.6 percent to $91.0 million and net earnings increased by 31.5 percent to $12.1 million, or better than anticipated. UGG’s sales rose by 30.4 percent to $78.5 million. Teva’s sales were down by about $500,000 to $11.3 million, while Simple’s sales dropped by 44.4 percent to $1.2 million. Simple’s discontinued sheepskin program accounted for about $1 million in the year-ago quarter.
On the management side, Zhoar Ziv was recently appointed chief financial officer and executive vice president of finance and administration. He replaces Scott Ash, who has resigned.
For 2006, Deckers expects double-digit growth for the Simple brand as it introduces fusion products, launches its 9 to 5 collection of casual leather shoes and begins deliveries of its Green Toe collection of environmentally friendly footwear. Deckers said that the response to Teva’s Fall 2006 offering was good, as the company tries to make the brand less dependant on warm weather. Investments continue to be made in research and development for the Teva brand to develop a more innovative and complete line of closed-toe footwear. The company has also been spending more on global marketing for the brand, aiming especially at a younger crowd. Guidance for 2006 includes net sales of $260-270 million for the year (more in Shoe Intelligence).
