After announcing in May its intention to acquire another shoe company, Goleta-based Deckers Outdoor Corporation announced this week it has paid $120 million in cash and acquired Sanuk, a sport and adventure footwear brand known for its surf sandals.
Founded in 1997 by entrepreneur Jeff Kelley, Sanuk, which means “fun” in Thai, will remain based in Orange County while its senior management will continue to run it, Deckers officials said.
Deckers reported it made $1 billion in annual sales last year and expects to double that in a few years. Prior to buying Sanuk, the 38-year-old South Coast company with its some 200 employees already had six brands: Simple Shoes, Ugg Australia boots, Teva, Tsubo, Anhu, and Mozo.
Last year, Sanuk generated some $43 million in sales. Its products are sold in about 1,700 retailers in 40 countries and at Sanuk.com.
Sanuk has built on the surf and outdoor markets through its relationships with professional athletes, including surfer Dave Rastovich, and rock climbers Chris Sharma, Daniel Woods, and Ethan Pringle.
Deckers officials said they funded the acquisition with existing cash balances. Stradling Yocca Carlson & Rauth in Santa Barbara served as legal adviser for Deckers.
MORE ON DECK: Deckers Chef Executive Officer Angel Martinez says company officials have decided to halt distribution of the 20-year-old Simple brand by December 31.
“Simple Shoes was the first brand to prove it’s possible to make eco-conscious footwear, and we’re proud to have accomplished all that we have,” Martinez said in a prepared statement. “Given that there is some degree of overlap between Simple and Sanuk consumers, and Sanuk’s positive outlook and global appeal, we make this difficult decision knowing it is in the best interests of the brands, the company, and its shareholders.”
In a June 21 memo to employees, Martinez said, “While it is difficult to say good-bye to Simple, it no longer fits in our portfolio. We have before us a number of major opportunities that require our focus and investment, and we are consolidating our energies and resources in support of these opportunities.”
Martinez said Deckers is at a point in its growth where it’s “critical that we invest in brands and initiatives with the highest global growth potential in both the short- and long-term.”
He added, “With UGG Australia’s global expansion opportunities, Teva’s move into closed toe footwear, the recent Sanuk acquisition, and exciting prospects on our emerging brands, it’s become clear that focusing diligently on our very best opportunities will create the results we’re looking for to continue to fuel Deckers’ growth.
The South Coast Biz Blog is a roundup of the latest business news in the Santa Barbara area and is written by Ray Estrada, who has covered business in the region for numerous publications over the past couple decades. See more at independent.com/biz and wordpress.com/southcoastbizblog.