Dansko, Inc.
Introduction
Beginning in 1990, the “Danish Clog” was brought to life in the United States. It began as a small company selling the shoes at horse shows but quickly grew larger than was imagined. Expansion of the product went from a single closed back clog to over 3000 products being sold in over 3,500 retail locations. During the past fifteen years there have been many offers to sell interest in the company. You are now becoming concerned that the company that was such as success all of these years may not be structured appropriately to promote further growth. You are now faced with a decision on how to can move forward. Should you consider a merger that will allow growth and a more conventional way of operations?
Financial Analysis
As of 2006, Dansko had approximately $90 million in annual revenue. This seems quite impressive given only 110 employees and only one small manufacturers. The company has succeeded in not taking on any debt as they have grown. Dansko remains a privately owned company so finding financial information proves to be difficult. There is much room for growth in the footwear industry. It has been projected that by 2009 footwear consumption will reach $60 billion. This is a forecasted growth of approximately 14.72%. Dansko management believes that it can grow 10-15% a year without putting any stress on the company. You have successfully made a brand of the product setting price beginning at $100. This allows you to achieve margins of 50-60%. This company has continued to be profitable with high margins and no debt.
Strategy
Dansko, Inc. trains employees by what they call a “Home Schooling” approach. You have typically hired younger motivated people with little to no business experience, let alone footwear industry experience. Time is taken to mentor and train the employees and give them many opportunities for growth within the business. This strategy would be just fine if there were no desire to grow. Because of the desire to expand
Beginning in 1990, the “Danish Clog” was brought to life in the United States. It began as a small company selling the shoes at horse shows but quickly grew larger than was imagined. Expansion of the product went from a single closed back clog to over 3000 products being sold in over 3,500 retail locations. During the past fifteen years there have been many offers to sell interest in the company. You are now becoming concerned that the company that was such as success all of these years may not be structured appropriately to promote further growth. You are now faced with a decision on how to can move forward. Should you consider a merger that will allow growth and a more conventional way of operations?
Financial Analysis
As of 2006, Dansko had approximately $90 million in annual revenue. This seems quite impressive given only 110 employees and only one small manufacturers. The company has succeeded in not taking on any debt as they have grown. Dansko remains a privately owned company so finding financial information proves to be difficult. There is much room for growth in the footwear industry. It has been projected that by 2009 footwear consumption will reach $60 billion. This is a forecasted growth of approximately 14.72%. Dansko management believes that it can grow 10-15% a year without putting any stress on the company. You have successfully made a brand of the product setting price beginning at $100. This allows you to achieve margins of 50-60%. This company has continued to be profitable with high margins and no debt.
Strategy
Dansko, Inc. trains employees by what they call a “Home Schooling” approach. You have typically hired younger motivated people with little to no business experience, let alone footwear industry experience. Time is taken to mentor and train the employees and give them many opportunities for growth within the business. This strategy would be just fine if there were no desire to grow. Because of the desire to expand