Heelys says it is closing down its European office in Belgium and transferring most of the business to its French and German offices. Finance will be handled directly from the head office in U.S., where the company recently appointed an international controller.
The country managers in Germany and France, Dominik Wieder and Stéphane Dejardin, will effectively run European operations as part of the reorganization, which will reduce the European staff from 13 to ten employees, including salespersons. Jon O'Neil, Heelys' international director, will move back to the U.S. by the end of June and remain in a consulting position. He plans to retire at the end of this year, but he wants to continue to be active - at a reduced level.
Meanwhile, the U.S. brand of wheeled footwear has reported a reduction of its losses in the fourth quarter ended Dec. 31, as its sales jumped by 63 percent to $10.9 million in the period, rising to $5.2 million in the U.S. and to $5.7 million elsewhere. The launch of new two-wheeled products for younger children helped the topline.
In spite of a drop in the gross margin of 0.6 percentage points to 36.2 percent, the company's operating losses fell by 41 percent to $2.05 million in the quarter, and its net loss declined by 38 percent to $1.98 million.
Annual revenues improved by only 5 percent to $32.0 million, but the company raised its sales in Italy and the U.K., while entering the United Arab Emirates through a distributor. Sales in France were more or less stable. The business in Germany, where Heelys now has its own web shop, went down a little but is expected to pick up again this spring.
The gross margin improved slightly to 41.6 percent, but the net loss for the year was up to $5.6 million from $3.9 million. At $8.8 million, inventories were 30 percent higher at year-end than 12 months before.
Heelys is understood to be still studying potential acquisitions. Meanwhile, its subsidiaries in Germany and France have started to distribute two brands of stunt scooters – Laser Pro and District Eagle – that are owned by its distributors in the U.K. and the Netherlands, respectively.
