By the power vested in me by AOL, its corporate parent Time Warner Inc. (NYSE: TWX), and those associated with the above entities, I declare the Heelys Inc. (NASDAQ: HLYS) fad to be over.
Mr. and Mrs. America, you will no longer be forced to dodge hordes of tweens flying around the mall in their God-awful and unsafe wheeled sneakers thanks to my sinister and cunning plan. I am urging my fellow thirty-something suburbanites to buy Heelys and roll on them in public. Once kids see how dorky we look "heelying," they will surely give up their expensive, trendy footwear, which they will grow out of sooner rather than later.
Perhaps the market is anticipating my plan. Shares of Heelys, which was one of the most highly touted IPOs last year, have slumped about 3% this year. Parents everywhere should rejoice. The company, unlike Crocs Inc. (NASDAQ:CROX), is a one-trick pony, and fads do eventually end.
Though the company recently posted better-than-expected results, there were some signs that worried investors. For one thing, gross margins fell to 35.4% in the three months ended March 31, compared with 36% during the year-earlier period. The company attributed the decline in part to an increase in estimated reserves for returns. Sites such as Model's and Sneakerland.com are offering free shipping on some Heelys models. Plus big shareholders are starting to sell off.
These aren't good signs for a company that gets 98% of its sales from one pretty pricey product. Some models cost more than $80. Crocs has a much broader array of products at differing price points, which will make that fad more sustainable than Heelys. Plus, many businesses don't allow people to "heel" on their premises for fear of lawsuits. Kids are supposed to wear protective gear with their Heelys, but I haven't seen many do so.
Though my colleague Georges Yared recently labeled Crocs as the next Nike Inc. (NYSE: NKE), I'm going to need more proof before I'm willing to jump aboard that bandwagon. CEO Ronald Snyder recently unloaded some of his holdings. Snyder's move is understandable since Crocs shares have almost doubled this year. The Heelys sales are more problematic.
But if Heelys starts to spin its wheels financially, it's likely that a private equity company would be interested in acquiring it for the brand name alone. Heelys still means something to kids even if it continues to send chills up the spines of their parents.
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Reader Comments (Page 1 of 1)
6-01-2007 @ 8:56PM
Edward mk said...
heelys are not the problem- if a kid falls they just fell. nothing to it. plus i strongley disagree with you calling them, "dorky", because i myself own a pair of heelys. sure i fall, and get hurt, but i can admit it was my fault~ not the company's.
6-04-2007 @ 8:09AM
tawny wagstaff said...
I totally agree with Edward, Heelys are not dorky and are still taking off in certain countrys around the world, i bought a pair and find it the best training for skiing and rehab on knees and i fall often which is the only way to improve. Heelys are here to stay so everyone just needs to chill and get use to it.
6-04-2007 @ 8:09AM
Lisa said...
Don't rejoice too soon--tweens, especially tween boys, will find some OTHER way to drive adults nuts and require repeated visits to the emergency room. It's just the way children, especially boy children are made. If children weren't supposed to do dumb, risky things resulting in injury, the lord wouldn't have invented emergency rooms.
6-04-2007 @ 1:33PM
Lorin Thwaits said...
I'm 37, and have been heeling for the last 4 years. It's phenomenal in airports when you've only got a few minutes to try to make a connecting flight. And most parking lots as well. Granted that it takes some patience while you're learning to "get the hang of it", but after becoming proficient I find it to be an excellent timesaver. Don't be fooled with how simple it looks, it ends up being moderate exercise. You can really only go maybe 50% faster than walking on most sidewalks due to all the cracks. In Wal-Mart or Costco where there's a nice surface you can get up to about twice walking speed in an 100% safe manner. I walk 100% in the busy sections at the front of the store or aisle intersections, and heel in the empty aisles to make my way to the back of the store. (Seems like everything you really want is always in the back of the store, right?) It really is 100% safe. I've never run into anyone.
The #1 question I get asked when I'm heeling: "wow, where did you find a pair in your size?" They're available on eBay or at Mervyn's and Big 5 sports. Remember that there's a significant learning curve involved here, and you'll build up ankle muscles you never knew you had. But after you're practiced up, it's an excellent way to get around.
For all those naysayers: with something that's currently this popular with the youth, and has the potential to make the everyday commute easier, there's a good possiblity that it won't die out like the hoola-hoop. I expect that in another decade these heely-proficient youth will still use the shoes to get around. I recommend going out and trying it for yourself to see what all the fuss is about before you blindly try to get the shoes blacklisted.
6-29-2007 @ 2:42AM
Joon said...
I totally agree with #4. I'm 39, and have heeled for 3years so far. I
think these heelys shoes are sort of a breakthrough behind a lot of
practical shoes. For instance, in-line skating gives us a lot of
benefit in many ways; however, you should spare some time for it at
particular places such as a park. You can change the buses or the
subways wearing them. You should change into normal shoes.In this
point, heelys give us a good way to move and walk on busy streets.In
Seoul, Korea, heelys was once very popular, but as soon as many
manufacturers made similar shoes with low price, many kids enjoyed
them.So even though many people have heelys, they cannot even show up
with heelys because they feel like being childish.Actually I don't
care what other people think about me wearing heelys and heeling
because I don't offend people with heelys. I just enjoy walking and
moving a little fast with some fun. Heelys are great especially when
you go somewhere by subway, when you go shopping at the mall.I even
traveled with heelys on it. They save me a lot of time to look around
many places such as Canada, Singapore and Japan.I love heelys and
enjoy them with my wife.
6-29-2007 @ 4:45PM
Joon said...
I totally agree with #4. I'm 39, and have heeled for 3years so far. I think these heelys shoes are sort of a breakthrough behind a lot of practical shoes. For instance, in-line skating gives us a lot of benefit in many ways; however, you should spare some time for it at particular places such as a park. You can change the buses or the subways wearing them. You should change into normal shoes.
In this point, heelys give us a good way to move and walk on busy streets.
In Seoul, Korea, heelys was once very popular, but as soon as many manufacturers made similar shoes with low price, many kids enjoyed them.
So even though many people have heelys, they cannot even show up with heelys because they feel like being childish.
Actually I don't care what other people think about me wearing heelys and heeling because I don't offend people with heelys. I just enjoy walking and moving a little fast with some fun.
Heelys are great especially when you go somewhere by subway, when you go shopping at the mall.
I even traveled with heelys on it. They save me a lot of time to look around many places such as Canada, Singapore and Japan.
I love heelys and enjoy them with my wife.