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R.G. Barry reports strong fiscal 2008 performance
10 Sep '08
5 min read
“Our multi-channel distribution strategy continued extending our products to an expanding universe of retailers and consumers. The Company's flagship slipper brand, Dearfoams, dominated multiple retail channels. Our 2008 growth initiatives, Terrasoles eco-friendly hybrid footwear and licensed Superga canvas/active fashion footwear, also received a good reception at the consumer level. With their bases now established, we expect these new brands to demonstrate healthy growth in fiscal 2009 and beyond.
“We will continue our strategy of layering on businesses that add seasonal, gender and channel diversity this year with the launches of licensed Nautica slippers and accessories footwear and our new NCAA-licensed My College Footwear. Much as we expected from the launches of Terrasoles and Superga in fiscal 2008, we foresee modest first year performances from these brands as they begin to establish their respective retail bases.
“While we remain confident in our business and begin the year with a strong balance sheet, healthy brands and a business plan that focuses on growth and profitability well beyond the next 12 months, we know that fiscal year 2009 will present a challenging environment from a general economic and business perspective.
We have begun seeing short-term economic volatility manifesting itself as: 1) caution among retailers who are delaying or reducing orders in an effort to limit their days of on-hand inventory and subsequently creating noteworthy shifts in our quarterly sales patterns, which will be evident beginning in the first quarter this year; 2) losses of retail floor space due to downsizings and bankruptcies; and 3) inflationary pressures from our suppliers. We are addressing these issues, but realistically we believe that they will result in relatively flat sales and lower gross profit margins for us in fiscal year 2009.
“We will continue to invest in our existing brands and new initiatives this year with a focus on growth and increased profitability beyond the 2009 fiscal year. As the leader in our category, we will continue to leverage our core business strengths in pursuit of becoming the No. 1 global accessories footwear and slipper resource.
We are also continuing our search for category-appropriate acquisitions that can add meaningfully to our top line, are accretive to earnings and will further balance out the seasonal and demographic aspects of our business. We believe that the current economic cycle will ultimately offer us attractive growth opportunities as we continue to expand and diversify within our category,” Tunney said.
“We will continue our strategy of layering on businesses that add seasonal, gender and channel diversity this year with the launches of licensed Nautica slippers and accessories footwear and our new NCAA-licensed My College Footwear. Much as we expected from the launches of Terrasoles and Superga in fiscal 2008, we foresee modest first year performances from these brands as they begin to establish their respective retail bases.
“While we remain confident in our business and begin the year with a strong balance sheet, healthy brands and a business plan that focuses on growth and profitability well beyond the next 12 months, we know that fiscal year 2009 will present a challenging environment from a general economic and business perspective.
We have begun seeing short-term economic volatility manifesting itself as: 1) caution among retailers who are delaying or reducing orders in an effort to limit their days of on-hand inventory and subsequently creating noteworthy shifts in our quarterly sales patterns, which will be evident beginning in the first quarter this year; 2) losses of retail floor space due to downsizings and bankruptcies; and 3) inflationary pressures from our suppliers. We are addressing these issues, but realistically we believe that they will result in relatively flat sales and lower gross profit margins for us in fiscal year 2009.
“We will continue to invest in our existing brands and new initiatives this year with a focus on growth and increased profitability beyond the 2009 fiscal year. As the leader in our category, we will continue to leverage our core business strengths in pursuit of becoming the No. 1 global accessories footwear and slipper resource.
We are also continuing our search for category-appropriate acquisitions that can add meaningfully to our top line, are accretive to earnings and will further balance out the seasonal and demographic aspects of our business. We believe that the current economic cycle will ultimately offer us attractive growth opportunities as we continue to expand and diversify within our category,” Tunney said.
R.G. Barry Corporation
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