Stride Rite Corporation has begun building a new European headquarters in Heerhugowaard, the Netherlands, just down the road from the current location of Saucony Sports. The new building, which will begin operating in September 2007 and employ about 28 people, will initially handle the logistics and sales for all of Stride Rite’s brands in Germany, Austria and the Benelux countries. Then in 2008 the new office will take over Stride Rite’s logistics for the UK as well. The current managing director of Saucony Sports’ Dutch office, Frank Warnars, will remain in charge of logistics and operations for the sports brand, but he will take on responsibility for other brands of the group when the subsidiary becomes Stride Rite Europe at the new building. He will continue to report to Stephen Krug, Stride Rite’s managing director for all of Europe.
In the USA, Stride Rite has shuffled around management to better accommodate its brands. Shawn Neville will now focus only on the Keds brand, whereas he was previously responsible for both Keds and Saucony. Saucony is being overseen by Richie Woodworth, who has been appointed president of the Saucony and Hind businesses. Before the change Woodworth was in charge of Saucony’s Hind brand and of Stride Rite’s Tommy Hilfiger license for footwear. Stride Rite has moved Sue Dooley to vice president of marketing for Saucony, similar to her prior role at Sperry Top-Sider, another brand of Stride Rite.
Last year’s acquisition of Saucony helped to boost Stride Rite Corporation’s sales outside of the USA by 119 percent to $22.3 million in the 3rd quarter, ended Sept. 1. Stride Rite’s total net sales increased by 21 percent to $177.5 million in the period, but without Saucony, which contributed a global turnover of $21.1 million, they rose by 6.9 percent to $156.4 million. The gross margin grew by 180 basis points to 41.6 percent, and net income totalled $8.5 million, as compared to $7.7 million in the year-ago period.
Stride Rite’s biggest division, the children’s group, had a total sales increase of 8 percent to $83.9 million. This division will no doubt include Robeez Footwear, a kids’ shoe company acquired by Stride Rite on Sept. 5 for $27.5 million in cash. The group’s Sperry Top-Sider brand remained strong in the quarter, with a sales increase of 15 percent to $20.9 million. The brand has been selling well in the marine and family shoe channels, and the momentum is expected to continue.
Instead, Keds’ sales dropped by 12 percent to $22.1 million in the period, although Stride Rite said that the brand has been having strong sell-throughs and should have “relatively flat” turnover in the 4th quarter. Keds was clearly the focus of investors in the company’s conference call earlier this week, as Stride Rite’s repositioning efforts for the brand continue, launching many new colorful styles for young women. Although the management expects Keds to improve in the current quarter, its ambitious plan of simultaneously attacking young female consumers and the 40+ crowd at the same time seems to be raising some scepticism among investors.
Sales of Tommy Hilfiger licensed footwear continued their downward spiral, falling by 36 percent to $11.6 million (more in Shoe Intelligence).
