Youth Against Establishment and action sports-inspired brand Volcom announced today, May 2, 2011, that it will merge with PPR, owners of Gucci, Yves Saint Laurent, and Puma for $607.5 million or $24.50 per share.

The merger represents another indicator of how the action sports industry is evolving and the changes that are taking place in streetwear fashion in general. Hard hit by the recession, like many other retailers and apparel brands, Volcom, while still popular among youth culture as indicated in our Spring Youth Culture Study 2011, had dropped in terms of preferences by the marketplace in several categories, whereas PPR has been making a push to move into more sports and lifestyle brands, particularly with what they are doing with Puma.

According to Richard Woolcott, Volcom’s Chairman and Chief executive officer, “PPR is the perfect partner to help take the Volcom and Electric brands to the next level of success. For more than 20 years we have worked to inspire a movement that provokes freedom of thought and expression, and celebrated this spirit through our athletes, worldwide events, rock tours, feature films and, of course, our apparel. PPR, with its expertise gained through both Puma and its Luxury Group, could bring international market knowledge, sourcing capabilities and other operational expertise in areas such as product development and retailing to help the company grow Volcom globally, while preserving the elements that make the brands authentic.”

For PPR, according to the Wall Street Journal, “Given the runaway ascent in production costs, anytime a brand portfolio such as PPR could combine two business units to gain scale, it’s good,” said Wall Street Strategies analyst Brian Sozzi in a research note.

Puma, which is mostly known for shoes, and Volcom, which only has a small footwear division, make a complimentary fit. PPR plans to open more Volcom stores and tap into Puma’s Asian manufacturing.

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