On Friday, May 20 news broke that Deckers Outdoor Corporation purchased Sanuk for an initial payment of $120 million plus conditional performance based payments over the next five years.
Now, with the ink dry on the deal, TransWorld Business sat down with Sanuk Founder Jeff Kelley to get a few more details of why the deal made sense and what it means for the brand moving forward.
How long have you been considering selling Sanuk?
We decided to look at our option about a year ago. We looked at both VC and endemic options.
Since you started the company 14 years ago, how has it evolved and where is it positioned now as far as size and scope?
I have always tried to brand Sanuk as an inclusive, obtainable brand for all people. We have become a very diversely distributed brand amongst top tier retailers in Action Sports, Outdoor, Specialty, and Mall based chains. This inclusive branding has positioned us to appeal to a broad audience and we plan on taking advantage of this without sacrificing distribution.
Why Deckers? What about the company has you excited about this acquisition?
Chemistry with the management is incredible. They know who we are, they don’t want to change it and they will pour gas on the fire. Deckers does one thing and they do it right—Footwear. In the beginning of all this we made a list of potential suitors and Deckers was number one on my list.
How did your agreement with C&C come into play and how will that business arrangement be affected?
Nothing changes for at least 18 months and possibly not as all as far as C&C continuing to handle distribution in the US. Deckers knows we are in the hub of the Action Sports world, and they don’t want to change it.
How will this affect the brand globally?
Very positively. We are at a point where globalizing Sanuk with one voice is a must. Deckers is a billion dollar global brand and has the experience we need to avoid pitfalls and grow the brand in a profitable manner for all associated.
What advantages will the company have by moving under Deckers’ umbrella?
Deckers is one of the most environmentally conscious brands in footwear and we will have access to many new materials and manufacturing processes that will aid us in being greener. They have experienced the pitfalls of building a global presence and will help guide us through the ups and downs. Deckers understands that in the big picture Sanuk is still a relatively unknown brand and we are taking steps to broaden our brand awareness. Deckers also has a strong history of going after anybody that violates their intellectual property, which for us will be fantastic.
How were you able to settle on a selling price? What factors came into play and are you pleased with how the acquisition is structured?
Our selling price was based on a multiple of our annual profit (ebitda) and an earn out on future performance. We are all pleased with the deal.
How will your role change within the company?
I will remain in control of product branding, but I will be focused on building a consistent message globally.