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UPDATE 1-Marcato takes stake in UGGs maker Deckers Outdoor
February 8, 2017 / 9:26 PM / 10 months ago

UPDATE 1-Marcato takes stake in UGGs maker Deckers Outdoor

(Adds details, background)

By Michael Flaherty

Feb 8 (Reuters) - Activist hedge fund Marcato Capital Management LP reported a 6 percent stake in Deckers Outdoor Corp , saying it intends to discuss strategy and options for the struggling maker of UGG boots and apparel.

Marcato’s disclosure sent Decker shares up 8 percent to $49 late on Wednesday.

Sales of Deckers’ sheepskin UGG boots, popular across U.S. cities, college campuses and malls, exploded to $1.52 billion in fiscal 2016 from $37 million in 2003.

But growth has slowed, and Decker’s share price has fallen by half since the start of 2015.

The $1.5 billion company reported weak earnings last week, missing analyst expectations and cutting its 2017 revenue forecast, sending shares down nearly 20 percent.

Marcato said in its securities filing that it intends to hold discussions with Deckers regarding its business, strategies and other matters. (bit.ly/2lrAAeI)

Marcato said the talks may include options to boost stockholder value through strategic alternatives such as acquisitions or sales.

The San Francisco-based activist fund is locked in a proxy fight against restaurant chain Buffalo Wild Wings and recently joined the board of crane maker Terex Corp.

Marcato’s stake in Deckers Outdoors makes it the company’s sixth-largest shareholder, according to Thomson Reuters data. (Additional reporting by Sruthi Shankar in Bengaluru and Noel Randewich in San Francisco; Editing by Savio D‘Souza and Meredith Mazzilli)

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