Oakley Inc. will open its first store next month at the Irvine Spectrum Center, part of a broad push under a new chief executive to increase the company's visibility and expand all of its product lines.
During Oakley's annual shareholders' meeting Friday, the new chief executive, William D. Schmidt, outlined steps the Foothill Ranch company will take to boost its brand, including hiring an outside advertising agency for the first time.
Although its stock continues to struggle, Oakley, which had limited itself to making sunglasses, is clearly not backing down from its decision to tackle new markets by selling athletic shoes and watches.
The company will introduce a third shoe line by the end of the year--including an "urban assault combat boot" dubbed "Das Boot." It also will expand its watch line, adding seven new styles. Demonstrating its determination not to be pigeonholed, Oakley displayed one of its limited-edition, solid-gold $25,000 watches.
Chief Operating Officer Link Newcomb blamed the flagging share price on concern by investors over the company's prospects as a shoemaker. Erasing that uncertainty is a top priority, said Newcomb, who had been chief executive until Schmidt took the position last month.
Oakley's stock, which hit a 52-week high of $14.88 last July, closed Friday at $7.81, down 6 cents a share.
Founder Jim Jannard, who has been buying up shares, made it clear to other shareholders that he too is upset by the sagging stock.
"Every time I look at our stock price, I have an out-of-body experience," he said.
Analyst Mark R. Miller of Merrill Lynch Global Securities agreed with Newcomb's assessment about what's dragging down the share price.
Sales of the first shoe--introduced last year--were disappointing, he said. A second, less expensive line will be in stores shortly, and the third line will be ready by the year's end.
"It highlights that management is committed to this endeavor," Miller said. "We think Oakley is a brand that probably can be directed to a wider audience."
Oakley is also hoping to reach a wider group--and perhaps a broader age range--of customers with its new wire frames for prescription lenses.
Prescription eye wear represents only about 1% of the company's sales, but the new line can move Oakley deeper into that market, the company said.
"Prescription glasses is a huge market opportunity for us," said Schmidt, a former Gatorade executive.
The company's new O Store, which opens July 2, will be used as a "test market" for new products and to educate customers about the company's technology.