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$FOSL, A Continuing Struggle
Fossil is a surprisingly deep company from the iconic Fossil watches to Michael Kors, Armani Exchange, Kate Spade, and Diesel the company boasts a "House of Brands."

Unfortunately, these brands do not seem to be at the forefront of many consumer's minds. The Fossil Group has struggled immensely over the last few years. As of their most recent earnings report, Revenue had fallen 14%.
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This caused the stock to fall 10% sparking a greater selloff that saw the company tank 30% in two weeks.
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In fact the carnage the market cap of $FOSL has fallen to $120 million, less that their total cash on hand of ~$198 million. This excess cash is nothing compared to their total debt of $835 million, $425m of which is very current debt.

This fact is made worse when you see that the company is unprofitable and is continuing to guide for negative revenue growth and continual unprofitability going forward.
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There is one particularly interesting part of their most recent earnings. Direct-to-Consumer grew by high single digits and comp sales grew as well in all regions. This growth couldn't stop the destruction of the wholesale channel though.
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I think it might be time for long time CEO Kosta Kartsotis to finally step down and bring in a new leader to turn things around. I say these because I feel Fossil might not have much time left without some pretty major changes.

Joshua Simka's avatar
Joshua Simka
In your experience with consumer goods companies like $FOSL that are flagging due to depleted appreciation for the brand, how successful is a change in leadership likely to be? Is the idea that a new CEO would bring a different approach to marketing?
Nathan Worden's avatar
Nathan Worden
As far as the product, it seems like people often bash Fossil for being mass produced.

It's made for the "as long as it looks good and tells the time" crowd.

Nothing wrong with thinking like that, of course, but it doesn't particularly interest the enthusiast. Just like a Bic disposable pen isn't going to get pen enthusiasts excited.
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