Zumiez to buy European retailer Blue Tomato
Everett-based Zumiez says it will pay 59.5 million euros for Blue Tomato, which has five stores in Austria and an e-commerce site that sells in 14 languages across Europe.
Seattle Times business reporter
Everett-based retailer Zumiez, which expanded into Canada last year, now has its sights set on Europe.
Zumiez said Tuesday it is buying Blue Tomato, an Austria-based seller of snowboarding and surfing merchandise, for 59.5 million euros ($75 million) to strengthen its international expansion.
Blue Tomato, founded in 1988 by snowboard champion Gerfried Schuller, operates five stores in Austria and an e-commerce site available in 14 languages across Europe.
Zumiez said it will use cash on hand to pay for the purchase.
"Joining forces with Blue Tomato represents the next step in our strategic plan to build the leading global action sports retail business," Zumiez CEO Rick Brooks said in a statement.
He added that Zumiez plans to "selectively" expand Blue Tomato's European footprint.
Jefferies analyst Randal Konik said the deal is a positive development in Zumiez's long-term growth.
"The company has done a great job expanding its store base and gaining market share domestically over the past few years, and we believe an entrance into the international market is the next logical step," he wrote in a research note.
The deal carries some risk, given the uncertain economic picture in Europe, but Konik said Zumiez's decision to buy a local company with an established brand and management team could give it an edge.
Blue Tomato will remain based in Schladming, Austria, and senior managers will keep their positions, Zumiez said.
The deal is expected to be completed before the end of the second quarter.
Zumiez sells snowboarding- and skateboarding-style clothes, shoes and accessories at nearly 450 stores in the U.S., as well as 11 new stores in Canada.
Also Tuesday, Zumiez raised its second-quarter outlook, citing better-than-planned sales. It now expects sales between $134 million and $136 million, up from its previous forecast of $128 million to $130 million.
The new guidance includes $2 million in projected sales from Blue Tomato, assuming the deal closes by July 1.
Zumiez maintained its outlook for a second-quarter profit between 4 cents and 6 cents a share.
The company's stock closed Tuesday up $1.79, or 4.5 percent, at $41.16, its highest level since fall 2007.
Amy Martinez: 206-464-2923 or firstname.lastname@example.org. Material from The Associated Press is included in this story.