Wednesday, January 9, 2013

Quiksilver Looks To Disney For Help

Quiksilver (NYSE:ZQK) announced January 3 that it had finally found the right person to lead its trio of global consumer brands into the future. Although it had been searching for a CEO to succeed co-founder Bob McKnight for a year now, I don't think anyone who follows the company quite expected the caliber of hiring. Andy Mooney takes over as CEO Jan. 13 after 11 years at Disney's (NYSE:DIS) consumer products division and before that, 20 years at Nike (NYSE:NKE), including a stint as Chief Marketing Officer. At age 57, he's got the perfect resume to take Quiksilver to the next level. Investors loved the news, sending its stock up 18% over two subsequent days of trading. Will the euphoria last? I'll have a look.

Bottom Line
Andy Mooney's inheriting a business with three strong brands in reasonable shape except for the company's debt. Its $265 million in European senior notes, which aren't due until Dec. 15, 2017, come with an 8.875% interest rate. With the notes accounting for 35% of its debt, the sooner it can reduce its annual interest cost, the better. Given Mooney's experience, I see no reason why he can't whip Quiksilver into shape over the next couple of years and then sell it to his former employer (Nike) or VF Corp (NYSE:VFC). Both can afford to buy it many times over and both already compete with Quiksilver.

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