Recently, Deckers Outdoor Corporation which is a manufacturer of sheepskin boots and slippers has acquires the Sanuk brand on July 1, 2011.

In an early release, Deckers stated that it has acquired the Sanuk brand which is known for its exclusive sandals and shoes and notable marketing with an initial payment of $120 million in cash.

The contract includes further participation payments based on the performance of the brand in the coming five years and contains certain assets and liabilities of the brand. Through the buyout, Deckers gain Sanuk’s customer base in the action sports footwear segment and will be modestly accretive to the earnings of fiscal 2011.

Sanuk will continue to operate with its present headquarter. Which is from Orange County, California. The brand gained more than $43 million of net sales in 2010. The company’s cash reserves will help the acquisition.

Deckers’ sustained pay attention to product innovation and terrain expansion facilitated the company which will help the company achieve robust growth. Further, Deckers is now directly managing the distribution of UGG, Teva and Simple brands in the U.K which sells directly to wholesale customers to gain incremental sales and margins

Moreover, global markets provide a significant growth opportunity to the company. Globally, Deckers distributes its products throughout Europe, Asia Pacific, Canada, and Latin America.

However, in the event of stagnation or decline of UGG sales growth, Deckers’ overall results will be affected adversely which is due to the percentage of contribution from the company’s other brands, which are too small to offset any slowdown in UGG sales.

Further, Deckers faces stiff competition in the footwear industry from Nike Inc. (NYSE:NKE) and Timberland Czo. (NYSE:TBL), on several attributes such as style, price, quality, comfort and brand name, which might adversely affect the company’s sales and margins.