Fossil Sees Misfit Acquisition As ‘Catalyst’ to Reverse Recent Sales 'Headwinds'

inspiring new entrants into the watch space, as well as explosive growth in activity trackers,” he said. That is why Fossil decided to buy activity-tracker supplier Misfit for $260 million cash, he said. The acquisition “will allow us to combine our key competitive advantages in design, sourcing, distribution and powerful brands with a business that is already a recognized player in technology-infused accessories and possesses a world-class software and hardware engineering team that stays ahead of emerging technology trends,” he said. The acquisition leaves Fossil “uniquely positioned to lead the convergence of style and technology to become the fashion gateway to the high-growth wearable technology and connected device markets,” he said. “This acquisition accelerates our ability to compete in the connected accessory space as we expand our addressable market while leveraging all the design and scale with which we serve the existing watch market.” The activity-tracker space “is one of the fastest-growing segments in accessories, given strong consumer interest in learning more about health, wellness and improving the quality of life,” he said. “We believe some of the headwinds we have been experiencing result from a lack of technology in our core business, and this acquisition will allow us to quickly start turning those headwinds into tailwinds.” Integrating technology into watches “is the next innovation in the evolution of the category, and we believe we can once again do what we did to the functional watch category, grow and gain share by elegantly and seamlessly blending design and brands with function,” Chief Financial Officer Dennis Secor said on the call. Fossil thinks the Misfit acquisition “can be the catalyst to reverse our most recent trends, to quickly restore growth and has the potential to drive strong growth beyond what we might have imagined just a couple of years ago,” Secor said.