Quiksilver has announced a reorganization in its Americas region, intended to trim expenses by more than 10 percent, or about $40 million per year. It will eliminate 200 positions, with 150 of them accounting for one-third of the savings. Nearly 20 percent of the cuts will concern company managers.
The overall measures will affect every functional area, and will result in a $5 million charge for the first quarter of the fiscal year. The company has already initiated money-saving measures in its Asia-Pacific and Europe regions. As previously reported, it also cut the pay of its executive management team by 5 percent beyond the reduction enforced in February 2008.
Quiksilver says it is on target to complete a restructuring of its uncommitted debt in Europe and Asia during the month of February.
The new announcement was accompanies by a new spate of rumors about the possible divestment of the whole company or important parts of it. The latest one, which could not be confirmed, indicates that Quiksilver may be selling its DC Shoes business to VF Corporation.
Last year Quiksilver sought the help of Morgan Stanley to evaluate its options regarding its $1 billion in debt as of Oct. 31. Selling parts of the business was said to be one option. The Orange Country Business Journal of California says now that there is gossip that Quiksilver rejected an investment or a buyout offer from Nike.
The Journal also says that rumors abound online and within the industry that Quiksilver will sell DC Shoes. An analyst quoted in the trade journal said that, while he hadn’t heard the rumors, they made sense, as DC Shoes is one of Quiksilver’s fastest-growing businesses, and one that has not been hurt as badly by the economic downturn as others. Quiksilver bought DC Shoes in 2004.
VF Corp. recently announced that its Outdoor Americas division will be split into Outdoor Americas, to be run by the president of The North Face, and Action Sports Americas, to be headed up by the president of Vans.
