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Not a secret that the top line at K-Swiss has been under massive pressure. The 2 and 3-year trend line is just about as bad as I can find in retail. That said, the sales decline has been flattening out, and SG&A growth recently rolled over, which is a pretty attractive inflection point in the operating profit trajectory from my perspective.

My interest in this one was all but squashed today when my sources realized that KSWS has taken the knife to its salesforce, with some senior layoffs over the past 2 weeks. Could we see the SG&A trend continue to improve at face value? Perhaps. But it always gives me the creeps when cost saves come at the expense of a salesforce.

Note: Chart below shows the change in market share for K Swiss in its 2 largest categories; Tennis and Lifestyle. Not a pretty trend. Data compliments of NPD Fashionworld.