It wasnt long ago that the Vans skateparks represented a revolutionary approach to marketing the brand to the extreme sports crowd. The concept was once the envy of the industry-a marketing concept that pays for itself and eventually becomes a profit center.
Vans was forced to take a $15.3 million impairment charge in their fiscal 2003 third quarter, resulting in a net loss of $9.2 million versus net income of $483,000 in Q3 2002. The charge was a result of the write-down of assets of 10 skateparks and 17 retail stores.
Vans saw U.S. wholesale sales decrease 8.6% and U.S. retail store sales down 2.2%. Comparable store sales, including Europe, declined 6.6% for Q3. The biggest declines on the wholesale side came in athletic specialty and sporting goods. Sales to the value, or mid-market, channel have also softened.
On the bright side, International sales were up 10% to $29.8 million in fiscal quarter ended March 1, 2003. Total net sales for the third quarter were fairly flat at $82.1 million, off $100,000 from fiscal Q3 2002.
VANS sees upside estimates for Q4 sales in the $57 to $60 million range versus $63.8 million last year, and a loss, excluding any additional skatepark charges, of 24 cents. Retail comps are forecasted to be down 5% to 7% and skatepark volume is expected to be down 35%.
The U.S. wholesale business is forecast down 15%.
International is expected to be flat. Backlog was not forecast, but VANS expects Mens to continue to be down and Womens to have an increase.
>>> Finally getting out from under the failed skate parks is an important first step. Now they need to get the product turned around in a rapidly disintegrating skate shoe market…
