Fall in sheepskin prices boosts Deckers Outdoor
26/04/2013
Ugg sales increased 7.9% to $170.6 million compared with $158.1 million for the same period last year, which CEO Angel Martinez attributed to new store openings and an increase in same-store sales.
The winters in 2011 and 2012 were the warmest on record in key markets for the Ugg brand such as the north-east of the US, and sheepskin prices had been the highest on record. “Prices for us went up by 40% in 2012,” said chief operating officer Zohar Ziv, “and that was on top of a 30% rise in 2011.”
Sheepskin is the most important raw material for company as the bulk of its revenue comes from the Ugg brand. However, sheepskin prices had fallen 11% at the start of this year due to a larger sheep herd and stabilised wool prices.
Mr Martinez added: “The investments we are making in our product lines, direct-to-consumer channel and international markets are creating strong growth pillars for our brands. We feel good about our current course and continue to be optimistic that our strategies will lead to sustainable growth.”
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