Everett, WA—Taking a step toward a more global presence, Zumiez, the teen board sport apparel and accessories retailer, said today to plans to acquire Austrian-based Blue Tomato, an action sports retailer.
The purchase price will be 59.5 million euros (about $75 million) with an additional 22.1 million euros contingent upon “achieving certain performance objectives related to growth over the next three years.”
Founded by former European Snowboard champion Gerfried Schuller in 1988, Blue Tomato operates one of Europe’s largest action sports ecommerce websites www.blue-tomato.com, which is available in 14 different languages. Additionally, the company operates 5 stores in Austria. Blue Tomato sells an extensive and diverse mix of branded snow and skate hard goods, apparel, footwear, and accessories across Europe.
For the fiscal year ended April 30, Blue Tomato reported a net sales increase of approximately 27% to 29.4 million Euros with roughly 75% generated through e-commerce. Blue Tomato reported 3.5 million euros of net income for the year ended April 30.
Zumiez Updates Outlook Based on Acquisition
“Europe has a large, vibrant and growing action sports community, which Gerfried and his team have skillfully tapped into through a broad offering of authentic brands and products, a differentiated retail experience, and superior customer service,” said Rick Brooks, Zumiez’ ceo. “The similarities between each organization’s culture and operating philosophies give us great confidence we can successfully leverage our combined expertise to selectively expand Blue Tomato’s European footprint and strengthen our foundation to support future international development.”
The acquisition, funded by Zumiez’s existing cash balances, is expected to be modestly accretive to earnings per share in fiscal 2012, excluding all acquisition and integration expenses. The transaction may close prior to the end of the second quarter of 2012. A portion of the contingent future payments are to be in the form of Zumiez stock.
Blue Tomato would continue to be headquartered in Schladming, Austria, and senior management led by Gerfried Schuller will continue in their current roles.
In other news, Zumiez raised its current outlook. Based on better-than-planned sales, the company raised its guidance, now expecting fiscal 2012 second quarter total sales of $134 million to $136 million, including some $2 million in sales of Blue Tomato assuming the acquisition is completed by July 1.
Net income per share is projected at around 4 cents to 6 cents including acquisition-related costs and expenses compared to its previously issued estimate income per share of around 4 cents to 6 cents, which excluded the acquisition.