Saucony, whose Hurricane 8 running shoe was selected as «editor’s choice» in Runner’s World’s upcoming footwear review, is leading the brand’s new owner, Stride Ride Corp., to focus its attention on Europe, which represents a large portion of Saucony’s annual sales of $150 million in athletic footwear. Because of the timing of its consolidation, which occurred on Sept. 16, only $23.2 million in sales from Saucony were included in the quarter.
The addition of Saucony helped Stride Rite to book a 24 percent increase to $7.0 million in sales outside the USA during its 4th quarter ended last Dec. 2. They were up by 25 percent to $33.9 million for the full year. Other factors were higher sales of Tommy Hilfiger branded footwear in Latin America, solid growth for Keds in Europe and Asia as well as gains for Sperry Top-Sider in Europe and South Africa.
Total sales were $131.7 million for the group as compared to $116.8 million in last year’s quarter, which had one less week. The results were negatively affected by a $5.4 million pre-tax expense related to a write-up of inventory purchased from Saucony. Stride Rite reported a net loss of $3.1 million in the quarter against a $51,000 profit in the year-ago period, but the results would have been flat without the extraordinary expense. Excluding the effect of Saucony, the gross profit margin declined by half of a percentage point.
Stride Rite expects its acquisition of Saucony to pay off in 2006. It plans to have the brand integrated into its systems and headquarters in the 2nd quarter, leading to the elimination of 60 jobs at Saucony’s former head office, which will be closed down in March. Stride Rite will rehire 85 Saucony employees. Meanwhile, the company’s designers have started working with those of Saucony on children’s footwear with a few to produce positive results for the corporation in 2007.
