Orange 21’s sales dropped 27.7% in 2009 to $34.2 million from $47.3 million in the prior year. The parent of the Spy Optic brand sustained a loss of $3.4 million for the year, compared to a loss of $15.2 million in 2008.
On the positive side, operating expenses were reduced by $7.6 million in 2009, excluding the $8.4 million goodwill impairment charge recorded in 2008. ORNG also noted that last week it received a $3 million loan from its largest shareholder, Costa Brava.
On a conference call with analysts, CEO Stone Douglass said the company will continue to focus on cost savings efforts during 2010 and may also benefit from the recent decline in the EURO since a significant amount of its products comes from Italy. He said demand for its primary brand, Spy Optic, “remains strong.
Douglass also expects growth from new licenses, ONeill and Margaritaville. ONeill eyewear and goggles just debuted in Europe at ISPO and at Surf Expo in Orlando. Douglass also said Orange 21 is in “advanced discussions with several other companies” on licensing agreements for sunglasses and is also having preliminary discussions regarding joint ventures for its current brands outside the U.S.
Regarding business conditions, Douglass said the action sports channel “continues to suffer” with many smaller stores going out of business in the downturn. But he said its largest retail partners like Zumiez and Tillys have been performing well in 2010.
