Skullcandy Goes for Epic Win

NEW YORK ( TheStreet) -- Skullcandy ( SKUL) turns 10 this year, and the headphones company says it's just getting started.

The Park City, Utah-based company designs and sells audio and gaming headphones, and other related accessories geared toward the younger set, who are into video games and alternative-action sports. It sells under three brands: Skullcandy, Astro Gaming and 2XL, its lower-priced model.

Skullcandy considers itself "one of the world's most distinct audio brands by bringing color, character and performance to an otherwise monochromatic space; helping to revolutionize the audio arena by introducing headphones, ear buds and other audio and wireless lifestyle products that possess unmistakable style and exceptional performance," according to its website.

The company's products are sold and distributed through a variety of channels in the U.S. and about 80 countries worldwide.

"Skullcandy revolutionized what was then a boring category. As the Apple ( AAPL) iPod has come on to the scene, devices were evolving and the accessories were uninteresting," CEO Jeremy Andrus said during the 15th Annual ICR XChange Conference in Miami on Wednesday. "We brought something new to the market."

(Full disclosure: I listened to Andrus' presentation via my Skullcandy earbuds.)

With more than 76,000 Twitter followers and nearing 2 million Facebook fans, Skullcandy, which went public in 2011, has got quite a following. The company attributes that to strong brand development, in part by having "brand ambassadors," a list of professional athletes like NBA superstar Kevin Durant, Australian professional surfer Owen Wright and Buffalo Bills' Stevie Johnson, among its users.

"These people live the Skullcandy lifestyle," Andrus says. "They love the Skullcandy brand and are great ambassadors for what we are doing."

Andrus sees opportunity in the global headphone market, estimated at $5 billion and growing, by "executing on a dual-brand gaming strategy," referring to its Skullcandy and Astro Gaming brands for gaming headsets, and in international markets.

"We're big believers that as smart devices proliferate and our consumers spend more time on them, they care more about performance. ... Not all brands are created equal," Andrus says.

"Gaming has a lot of overlap with audio," he says. "It's a growing marketplace. It's a relatively new category and it's really grown in the last three or four years, yet a dominant single brand owns over 50% of the market on the console side. Mobile gaming and PC gaming is an opportunity where we see a resurgence" of increased demand.

"A lot of gamers aren't using headsets yet," Andrus says.

But the brand is up against some strong competitors in the headphone space, including Harman ( HAR), Sony ( SNE), Bose, Beats by Dre and -- specific to the gaming space -- Turtle Beach .

Andrus doesn't seem deterred. "We built an in-house design team that is critical to our ongoing strategy of all of our brands," he says. "Product is huge ... we will win with great product."

Astro Gaming is the company's "high-end, premium gaming headset. It's very well-respected" among professional gamers, Andrus says.

When Skullcandy acquired the company in 2011, Astro Gaming was sold exclusively online. Skullcandy remade the product with better margins for the retail space. It began rolling out the new line this past fall, Andrus says.

The company wants to push internationally. Skullcandy was originally using a third-party distribution model in its international markets, but Andrus says there are disadvantages. The company plans to increase market share abroad, specifically in Europe, "by being in those markets, by having operations on the ground where we are grassroots marketing to the consumer," he says.

The company acquired distribution rights for Europe in 2011 and opened an office in Zurich.

"We're not simply developing technology for technology's sake," Andrus says. "We believe that ultimately we win when there is a convergence between great brand and great product."

Shares of Skullcandy rose 0.8% to $7 on Wednesday.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to:

>To submit a news tip, email:


Follow TheStreet on Twitter and become a fan on Facebook.

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

More from Technology

Tuesday Turnaround in Politics: Is a Trade War on the Horizon?

Tuesday Turnaround in Politics: Is a Trade War on the Horizon?

FANG Stocks Get Swept Up in Broader Market Selloff

FANG Stocks Get Swept Up in Broader Market Selloff

Snap Shares Plunge After Cowen Cuts Price Target

Snap Shares Plunge After Cowen Cuts Price Target

Netflix Shares Hit All-Time High as Market Flounders

Netflix Shares Hit All-Time High as Market Flounders

18 Auto Stocks Trump Just Ran Over With His China Tariff Attack

18 Auto Stocks Trump Just Ran Over With His China Tariff Attack