Tony Hawk Owner Bullish on Skate Industry Prospects
The owner of the Tony Hawk brand is bullish about growth prospects for the skateboard industry over the next five years.
Apex Global Brands (formerly Cherokee Global Brands) told investors that the skateboard industry is expected to grow at a compound annual growth rate of 3.1% over the next five years totaling $2.4 billion by 2024.
The company cited data from Grand View Research, a U.S.-based market research and consulting company.
The Tony Hawk brand was a highlight of Apex’s earnings report because the brand is expanding in Asia thanks to a new licensing agreement with United Trademarks Group, a retailer and wholesaler.
The deal covers China, Japan and S. Korea with new products introduced to those markets in the summer of 2020. Apex believes skateboard’s debut in the Summer Olympics in Japan will boost sales as well.
Apex is in financial trouble, however, and recently violated one of its loan EBITDA debt covenants.
The company blamed the weakening of the British pound, increased U.S. tariffs and the impact of Brexit.
Apex’s lender has given the company a grace period until Feb. 28.
The company has retained an outside advisor to review its portfolio of brands and make recommendations to grow revenue and cut costs.
In addition to Tony Hawk, other brands currently in the Apex portfolio include Hi-Tec, Magnum, 50 Peaks, Interceptor, Cherokee, Liz Lange, Point Cove, Carole Little, Everyday California and Sideout.
During the quarter ended Nov. 2, Apex revenue fell 15% to $4.9 million. The company recorded a net loss of $6.8 million compared to a net gain of $100,000 during the same period last year.