Changes Come to Quiksilver as Part of Turnaround Plan
Quiksilver is poised to launch one of the first major initiatives under owner Oaktree Capital Management: a new global merchandising planning structure.
All the core processes have been redesigned, something Oaktree identified as a major need during the due diligence process when it was exploring investing in Quiksilver.
As a result, positions were eliminated today, and the company held a town hall meeting for employees to explain the changes this afternoon.
The job cuts are fewer than the 77 that happened right before the company filed for bankruptcy in September – in the mid-20s range – and impact functions including sales, planning, finance and IT.
CEO Pierre Agnes and President Greg Healy told me in an interview that the decision to reduce headcount is always a tough one, but this time, the job losses come as a result of the process modifications rather than as a mandate to arbitrarily reduce SG&A.
The changes coming to the global product engine were described to me this way: Previously, there were moves to create a global organization, and some changes happened at the top level. But not many of the processes beneath that were changed, which led to chaos, late deliveries, and bad inventory buys.
The new system knocks 15 weeks off the product calendar to get the company closer to market, improves up-front planning, provides a better balance between the global and regional product mix, and adds more financial discipline around the process, Pierre and Greg told me.
By being closer to the market, the goal is to be more on trend, make more informed inventory buys and ultimately increase gross margins.
Pierre and Greg said the process changes this time around make sense, and they like that Oaktree is implementing intensive and continuous training for the staff on the changes, something that has not happened before.
They also said the relationship with Oaktree is off to a good start and the firm’s expertise and rigor are helping the organization to improve overall.
During the Andy Mooney reign, two camps developed in the company: his people on one end, and the Quiksilver people on the other, Pierre said.
“It feels like we are all one team now, working together,” he said.
The new global product structure is just one plank in the turnaround plan, which includes more than a dozen different initiatives. Greg stressed that the other plans do not necessarily include job cuts. Many focus on improving execution in various parts of the business.
The company is also in the midst of intensive, global consumer research on its brands, with plans to refresh its strategies by the end of the year.
And the teams continue to work on winning back business in the core market, among many other projects.While business is still challenging, especially in the Americas, the new Quiksilver is making progress and meeting targets, Greg and Pierre said.
But they stressed the company is in the early stages of a three-to-five year plan to turnaround the business and there’s a long way to go.