brand realignment strategy:
Regarding the domestic front, MacGregor stated, ``Part of the brand realignment strategy that we have discussed with the Australians is to shift the Hot Tuna(r) brand's distribution to the mid-tier department store and sporting goods channel. In essence, Hot Tuna(r) would replace the Xisle label in this channel and would be available at retail mid 2004. Assuming we come to an agreement with the Australians on a revised relationship, I feel that this is a significant upgrade in terms of brand (Hot Tuna versus Xisle) awareness and revenue potential in the mid-tier channel. This would also allow us to replace Hot Tuna(r) with the Bluetorch(tm) brand in the core and specialty shops, which once again, is a significant upgrade.''
Added Stewart Kawamura, National Sales Manager, ``As a result of our realignment of brands and their respective channels of distribution, we will not be shipping Hot Tuna(r) into the core shops such as Zumiez and Tilly's as previously announced. As a result, we will focus all our energies surrounding Hot Tuna(r) on the much larger mid-tier retail segment. In terms of the limited revenue we anticipated from Hot Tuna(r) in the core shops this quarter, we are confident that we will more than make it up with shipments of Bluetorch(tm) apparel into those same shops.''
MacGregor said, ``With Bluetorch(tm) replacing Hot Tuna(r) in the core shops, Hot Tuna(r) potentially replacing Xisle in the mid-tier and TSA(r) replacing Piranha in the mass-market, we feel strongly that we have dramatically enhanced our ability to achieve our sales projections over the next five years. The brand targeted to each level of distribution is significantly stronger and better known with consumers as compared to the brands they are replacing in each channel respectively.''
Aussie Apparel stated they anticipate coming to a final resolution with Federation Group regarding a potential restructuring of their relationship within the next two weeks and that an announcement would be forthcoming at that time.
