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TheStreet Open House

[video] Skullcandy CEO: Innovation Process Similar to Apple

Stock quotes in this article: SKUL, AAPL, NKE

What can we expect coming from Skullcandy in 2014?

Darling: Really big four primary stories that we're telling this year are around innovation and solving problems. The first one is what I talked about that Crusher technology -- how do we truly drop you into the front row of that concert to revolutionize how you think about audio, how you think about watching a movie, how you think about being in a video game versus just being audio listening.

The second is we started our women's line. Historically there have been other brands that have gone out with a "Shrink it and pink it" mentality. We spent a lot of time with the consumer on whether that was acoustics or whether that was really sizing you don't like. We're going to completely change the sound curve. Men and women happen to hear differently ... women tend to hear mids and highs much clearer and they hear bases much lower. We also took and redid all the measurements on our headphones, applied an antibacterial agent to the cup [that] makes it so the makeup doesn't smear as much and shrunk down the cup so that it's not in your earring. It's going to be out April/May mostly at boutiques [that are] higher end.

The third story is around sports performance and that sticky gel always staying in your ear. And then we have feature that we developed that allows you to bring in ambient sound.

Our last one is the Air Raid Bluetooth speaker.

Skullcandy recently announced a partnership with Toshiba, should we expect more partnerships like this one?

Darling: Toshiba is a great one for us. You take an iconic brand like Toshiba that traditionally is a little bit older when you think of the demographics that it applies to, but has a great product. As they want to age down a little bit, we can bring that fun, young, irreverent creative attitude to their products from a branding perspective and activate around that. Our deals are around laptops, if you think about what kids are using laptops for its not to do PowerPoint to do Excel. They're watching movies, they're playing video games and so the audio becomes really important so we can go in and help them tune their audio to much better than what it had been and give them a competitive advantage in the market so that's a fun one for us.

For the future I think we have such a strong brand and we resonate so well with our consumer that's attractive [to partners] and we have great in-house capabilities around audio, so I think there are more opportunities.

Skullcandy sells in such a variety of retailers from Best Buy to RadioShack to TJ Maxx, does that hurt the brand at all, particularly in a case like the discount retailers?

Darling: Absolutely. At the end of the day a great product and great storytelling are what win and separate us. Part of that is where do you distribute? One of the big things I did was look at that distribution piece ... and with off-price [said] we're doing too much there, it's not great for the brand. So this year we ripped the Band Aid off, we cut that by 60% of what it was. A lot of people hear our revenue has been down pretty significantly. We're going to be proactive and if this is going to be a great brand long term were going to have to make some tough decisions for the short term.

We want to be the best retail partner to those retailers we think tell us a great job telling the story and in some of those that haven't been able to tell the story as well we've pulled back on them.

As far as those long term plans for the company, there's a lot of talk about whether Skullcandy will remain independent or consider a buyout. Any general thoughts you can share?

Darling: This one is actually an easy one for me. Before I came here I was the general manager for Nike+ Digital Sport -- my dream job having been a high school and college athlete. I didn't leave that job just to sell a company. I left it to go really create an amazing and special company. So we're going to go do that.

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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