Which Multi-Billion Dollar Company Just Acquired The Volcom Stone

It’s been a little over a year since luxury group, Kering (formerly PPR), announced it was returning to its roots- selling really expensive stuff to rich people- and would be divesting itself of any brands which fell outside that scope.

Kering sold its stake in Stella McCartney to Stella McCartney and spun Puma off into its own company by distributing the majority of shares to existing Kering investors. Volcom, which had been acquired for $608 million in 2011, was placed on the auction block, where it has remained since.

Yesterday it was announced that a buyer has been found. A pretty bow’s been wrapped around Volcom’s neck and it has been led offstage to join the stable of brands owned by multi-billion dollar brand development, marketing, and entertainment company, Authentic Brand Group.

In 2018 ABG boasted total global revenues of nearly $8 billion and, in addition to Volcom, is the proud owner of brands such as Marilyn Monroe, Mini Marilyn, Elvis Presley, Muhammad Ali, Shaquille O’Neal, Dr. J, Greg Norman, Neil Lane, Thalia, Michael Jackson, Nautica, Aéropostale, Juicy Couture, Jones New York, Herve Leger, Judith Leiber, Frederick’s of Hollywood, Frye, Adrienne Vittadini, Taryn Rose, Misook, Hickey Freeman, Hart Schaffner Marx, Spyder, Tretorn, Tapout, Prince, Airwalk, Vision Street Wear, Above The Rim, and Hind.

In other words, another very big fish has come to play in our very small pond.

The operating arrangement going forward is interesting, and somewhat unique in comparison to how ABG typically operates. While ABG purchased all of Volcom’s trademarks and intellectual property, Veeco’s actual operations- its employees, offices, distribution network, and athlete contracts, will be under the umbrella of the newly formed Liberated Brands.

ABG is a minority shareholder in Liberated Brands, partnered with current Volcom executives- CEO Todd Hymel, CMO Ryan Immegart, COO Brad Holman, and CFO Desi Swanson. Liberated Brands holds the master licenses for all of Volcom’s various product categories and has plans to eventually acquire additional properties, or work with others owned by ABG.

What does this mean? Well, at the very least, that sticker is likely never leaving Ozzy Wrong’s nostril. Photo by Tom Carey

CEO Todd Hymel:

Typically, this is how [ABG] structures their deals: they buy the IP of distressed companies, and even some companies out of bankruptcy, and they would pick up the intellectual properties and then go and find operators around the world to pick up the pieces of the brand and rebuild it. They would go to category experts to do that and just license the name over to that new operating company.

When they acquired Aéropostale it was the first time they made a similar structure to this one, where they took a minority position in the operating company. And they found that to be a very successful platform. When they looked at Volcom they obviously saw that the intellectual property had a lot of value to them, but then they realized that, unlike a lot of their brands, we already operate a global distribution setup. Because Volcom used to be a standalone, publicly traded company, distributing to 60-70 countries around the world. It has retail platforms, e-commerce platforms, distribution centers, everything you need to run a global business. So they definitely see that platform as strategic to their group and they wanted to have a minority stake in the operating company. Which we’re excited about because it means they’re committed to what we’re doing and are going to get even further behind what we’re doing.

When you look at all of those things, it’s where they saw the value and why they wanted to partake in doing the operating company, instead of buying the whole thing straight out.

The burning question, insofar as Volcom’s employees and athletes are concerned, is “What comes next?” A change in ownership is, all too often, a precursor to lay-offs, slashed rosters, and misguided change for the sake of change.

But there’s good news for Volcom’s current roster of employees, retailers, and athletes. With the current executive staff remaining in control of the brand there are no plans for any changes going forward.

Vice President of Surf Brad Dougherty:

We went out and had a big rager last night, old school style, just to let everyone know that we’re excited about the future. That day one is the same as day two. This isn’t a consolidation of anyone. It’s an opportunity for us to start investing in infrastructure, either through new acquisition, or through [ABG’s] existing companies. Operationally, everything is the same thing.

And we’ve just confirmed the Volcom Pipe Pro for 2020, which we’re really excited about. [The City and County of Honolulu] just let us know last month that we secured the permit for three years. We’re letting the WSL know today, officially.

CMO Ryan Immegart:

ABG loves the brand and what we’ve created and they’re behind our athlete programs and all the events, the real core marketing stuff that we do. The Pipe houses in Hawaii are a very important part of the program. We’re moving forward with all that stuff. And those are some of the questions that have come up. It’s like, ‘Hey, what’s going on with the athletes and the houses and events?’

We’ve got their full support to move forward and keep investing in those programs. We’re putting brand new sewage in the Pipe houses right now. It’s gonna be pretty awesome because we have an old cesspool and it’s taken a lot of butts. We’re gonna get that thing buttoned up!

So no restructuring, no redundancies, no “streamlining.”

Just business as usual at the surf/skate/snow titan born in a Costa Mesa garage.