Skullcandy's Customers Performance

Domestic (U.S.). As we have grown our retailer base from independent retailers to large regional and national retailers, we have sought to protect and enhance our brands' images by carefully controlling the distribution of our products as well as the product mix we offer to each retailer.

Our specialty retailers include independent retailers focused on action sports, gaming and the youth lifestyle, as well as a number of national and regional retailers with an action sports, gaming or music orientation, such as Tilly's, GameStop, Journey's and Jack’s Surfboards. These specialty retailers provide a direct connection to our consumer influencers and serve as the platform upon which we develop, reinforce and maintain our reputation that our brands have an authentic lifestyle.
We have a sales and distribution strategy intended to allow us to build relevant and exclusive products for our specialty retailers while giving us a runway to build demand creation and scale production before launching into large format retailers. This is designed to build the authenticity of our brands with our specialty retailers while creating a robust product pipeline for the future. Keeping our product mix specialized and focused on our consumer is the essence of our sales, marketing, and product strategy. We currently sell into a broad spectrum of retailers, including those focused on consumer electronics, such as Best Buy, those focused on sporting goods, such as Dick’s Sporting Goods and large retailers, such as Wal-Mart, Target and Fred Meyer. We are selective about the national retail partners that we align with as well as with the product mix we offer to these retailers in order to reinforce our Skullcandy's brand positioning as the original performance lifestyle audio brand, Astro Gaming's brand positioning as the premium leader of gaming headphones that lives at the epicenter of technology, lifestyle and design. Historically, we have managed our relationships with these large retailers through independent, commission-based sales representatives. However, we continue to build out our team of in-house sales professionals focused on driving the business with our top retailers and connecting our internal sales, marketing and product teams. Our national sales team enables us to improve the frequency and level of interaction with these retailers. Our other large retailers are managed by our regional sales managers through independent sales representatives where we can put the best team in place to meet the needs of our retailers and our business.