As sales slow, Utah's Skullcandy retrenches
Park City-based audio accessories manufacturer Skullcandy announced Tuesday it is closing its San Clemente, Calif., office and restructuring its management team amid slowing sales and a fading stock.
The company, which produces headphones for mobile devices and also sells active apparel, said it is moving its marketing, creative and business development and legal departments to its Park City headquarters from California, as well as certain sales and international personnel, according to a statement.
"Bringing together our teams in Park City will allow us to better focus our go-to-market process and ensure our products, messaging and distribution are aligned with our target consumer," said President and CEO Hoby Darling, whose company saw sales take a 30 percent in the first quarter.
Skullcandy said the prior-year first quarter was aided by a packaging change that led to higher sales and that it chose to scale back its sales to the highly discounted off-price market by more than 60 percent.
Shares of Skullcandy dipped 3 cents per share, to $5.70, in trading Tuesday but have lost more than 65 percent of their since a high of $16.66 per share on Aug. 17.
Skullcandy has about 30 employees in its San Clemente office, and they are expected to make the transition to Park City this summer. Most will have the opportunity to relocate with the company's assistance.
Skullcandy also announced that Sam Paschel, the executive vice president of product development and merchandising, has been named to the new position of chief commercial officer. He will be responsible for product teams.
The company's chief financial officer, Kyle Wescoat, has resigned to "pursue opportunities closer to his home in Southern California," according to the statement. A search for his replacement has begun, and Wescoat will remain with the company through September to assist in the search.
The changes come several months after Darling was named to direct the company. Skullcandy's former CEO, Jeremy Andrus, stepped down in February to join the Massachusetts investment firm Solamere Capital, co-founded by Mitt Romney's son, Tagg.
Before joining Skullcandy, Darling was the general manager of Nike+Digital Sport, a member of the Nike Affiliates Global Leadership team and served as the head of strategy and planning for Nike affiliates.
Skullcandy's net sales in the first quarter decreased 30.4 percent, to $37.1 million, compared with $53.3 million in the prior-year period, the company reported. North American net sales decreased 37.9 percent, to $28.7 million, compared with $46.1 million.
"While our results were in line with expectations, there is still much work to be done," Darling said in a statement.
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