High jump <<5/28/99 >
While nowhere near the size of giant Nike, K-Swiss (KSWS: news, msgs) has been a really bright light in this sector, thanks mostly to renewed interest in its classic tennis shoe line. In Q1, K-Swiss reported an increase of 275 percent in net earnings and a 110 percent jump in total revenues. Shares in its common stock have skyrocketed in the past year from 9 ½ to a recent high of 57.
"Right now it looks like K-Swiss is not going to be able to repeat the increases of the last four months," Boswell said. "That's kind of a done deal."
Is there another K-Swiss waiting in the wings? "Van's (VANS: news, msgs) would probably be my next choice," Boswell said.
Van's, which has an alliance with Pacific Sunwear of California, Inc. (PSUN: news, msgs) and a recently announced allegiance with Sunglass Hut (RAYS: news, msgs), operates a chain of retail stores and also designs, markets and distributes sports footwear and products, "active-casual" footwear, clothing and accessories. Van's is also building skate parks, another venue for peddling it's youth-oriented goods.
Boswell also likes New Balance, the privately held sports shoe company which could be an attractive acquisition target.
"The consumer is very jaded. Everything is promotional," Boswell said. "Stores are everywhere and they're selling the same thing. Niche players like K-Swiss and Van's are just doing better."
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