Sanuk is betting that Deckers can take its business to the next level.
Goleta, Calif.-based Deckers Outdoor Corp. announced Thursday it is acquiring the action-sports sandal and footwear brand for roughly $120 million in cash, plus performance-based payments over the next five years.
Orange County, Calif.-based Sanuk, founded in 1997 by Jeff Kelley, is best known for its Sidewalk Surfer line of deconstructed shoes and its flip-flop and sandal collections. Prices for the brand, which is sold at a variety of accounts, including Journeys, REI, action-sports retailers and department stores, fall largely between $15 and $60.
Deckers, the parent company to the Ugg, Teva, Simple and Ahnu brands, among others, said in a release it would acquire Sanuk USA LLC and C&C Partners Ltd., the exclusive licensee for the Sanuk brand in the U.S., Canada and Europe. According to Deckers, the combined businesses generated more than $43 million in net sales in 2010.
Sanuk will maintain its existing headquarters, and Kelley and the senior management team will remain on board, Deckers said.
Deckers president, chairman and CEO Angel Martinez told Footwear News that Sanuk made an attractive addition to the portfolio.
“It’s an action sports brand, it’s a surf brand, and we don’t really have strength in action sports and surf in our brand portfolio. This would be the lead brand for that entire channel of distribution,” he said.
Deckers’ deep sourcing and manufacturing connections, as well as overseas experience, will offer great growth potential, he added. “[Sanuk is] just getting going. There’s a department store business that’s potentially pretty significant, and I think it only does about $7 million outside the U.S., which is really minimal. There’s just nothing but opportunity outside the U.S.”
“[Deckers’] vision for Sanuk is exactly what mine is, and [the company is] really anxious to basically just pour gas on the fire. It’s going to be a really good partner for us,” said Sanuk founder Jeff Kelley. “We feel we are positioned to be able to move into a Vans type of a space, where we’re doing several hundred million dollars a year in sales, and we’re going to need a solid infrastructure to make that happen. Deckers brings that to the table for us.”
But don’t expect changes to the brand’s ethos or direction, Martinez said.
“We’re really not going to screw it up,” he said. “We think it’s moving in the right direction, and [this deal] just liberates Jeff Kelley’s creativity to continue to develop the brand in the direction that’s right for Sanuk.”