Oakley has expanded its relationship with footwear retailer Foot Locker and entered into agreement to acquire sunglass retailing chain Iacon Inc. The move, the company says, is in response to this summer’s announcement that Luxottica-owned Sunglass Hut, Oakley’s largest account, would be canceling 80 percent of its order from Oakley.
“This is another major step toward fulfilling the objectives we outlined in early August in response to changes in our relationship with Sunglass Hut,” says Chief Executive Officer Jim Jannard. Those objectives included strengthening relationships with existing retailers through a dealer program, increasing Oakley’s shelf space with large regional and national mall-based retailers, and accelerating the expansion of its company-owned retail stores.
Oakley’s arrangement with Foot Locker will be initiated next month. By November, Oakley products will be in more than 350 Foot Locker stores. Foot Locker is also carrying Oakley’s Fall 2001 footwear products in 316 of its nearly 1,500 U.S. stores, up from 112 stores currently. These stores include many of Foot Locker’s highest volume locations.
“Our new partnership with Foot Locker is another step in our strategic plan designed to overcome Sunglass Hut’s decision not to carry Oakley products,” says Jannard.
In addition to striking a deal with Foot Locker, Oakley has also agreed to acquire sunglass retail chain Iacon. Scottsdale, Arizona-based Iacon operates a chain of approximately 40 mall-based sunglass specialty stores located throughout the United States, with a concentration in the sunbelt regions: Sunglass Designs, Sporting Eyes, and Occhiali da Sole.
Iacon Founder and President Jeff Obstfeld will continue to oversee the Iacon’s day-to-day retail operations. He will also serve as an adviser to Oakley’s existing retail group that is responsible for Oakley’s “O Store” and “Vault” retail concepts. Iacon’s current management team will also remain intact.
“I can’t think of a better partner to join forces with to expand the Iacon business,” says Obstfeld in a press release. “We intend to maintain our successful product assortment strategy, including of course, Oakley.” Over the past year, Iacon generated revenues of approximately fifteen-million dollars of which Oakley accounted for approximately 26 percent.
Financial terms of the transaction were not disclosed. The transaction is anticipated to close by the end of October.
In 1996, Sunglass Hut constituted 31 percent of Oakley’s business. And while this had been trimmed to nineteen percent, Sunglass Hut was Oakley’s largest and most important retail account.