Hedge fund Marcato Capital Management, which owns 6.1% of Deckers Outdoor Corp (DECK), said in a presentation on Thursday the company could focus on its core UGG brand by pursuing a sale or spin-off of non-core brands to boost shareholder value.
UGG is Deckers’ substantial footwear brand that generates strong cash-flows, returns and is underpenetrated internationally, Marcato said in slides presented at the Sohn San Francisco Investment Conference. Deckers is its second-largest investment at an average cost of $46 per share.
The fund said the company should hire consultants to implement efficiency program targeting aggressive retail closures and cost reduction, and it could also recapitalize its balance sheet and use the proceeds along with sale of brands to repurchase shares.
Deckers shares were 1.5% higher in late trade.