Billabong (Australia)

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Surfing and extreme sports clothing and accessories label Billabong was one of Australia's fastest growing brands during the 2000s before running into severe difficulties after 2011. Branding agency Interbrand listed Billabong at its peak as one of Australia's most valuable brands, outranking even national airline Qantas, financial services company AMP or any of Australia's wine labels. The group delivered additional growth by acquiring a string of other sports apparel and accessories businesses, including Element skateboards and footwear and Von Zipper sunglasses. However the debt burden caused by that rapid expansion, accompanied by the slowing global economy, began to weigh heavily on Billabong in 2011, leading to talks with a number of buyout firms. As performance gradually worsened, one after another prospective buyer pulled out of talks, and the group only just avoided a full collapse with a last-minute deal in summer 2013. The market for extreme sports apparel and accessories is highly competitive, but Billabong remains the clear #2 worldwide behind US company Quiksilver, which has been facing a similar slowdown in performance.

Selected Billabong advertising

Who are the competitors of Billabong? See Clothing & Accessories Sector

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Billabong website

Brands

Honolua Element
Von Zipper Kustom
RVCA Xcel
Tigerlily

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 10th Sep 2015: A merger of the world's two biggest surfwear and action sports companies could be on the cards following market leader Quiksilver's decision to file for bankruptcy protection in the US following a prolonged downturn in performance, burdensome debts and over-expansion. It has agreed to hand majority control to financier Oaktree Capital in a debt-for-equity swap. Oaktree also happens to be the largest shareholder in Quiksilver's main rival, the Australian company Billabong, which recently announced a return to profit for the first time in four years following similar troubles.

Adbrands Weekly Update 4th Sept 2014: There were signs of a turnaround at Australian surfwear group Billabong following its rescue by private equity investors and the sale of struggling non-core operations. Revenues from continuing operations for the year to June were A$1.1bn, up 1% on a comparable basis, but down 18% on the figure reported for the previous year. Europe did reasonably well, and performance was sound in Asia Pacific, but revenues from the Americas slumped by 10% on a same-store basis. Net losses reduced by almost three-quarters to A$234m.

Adbrands Weekly Update 26th Sep 2013: Following pressure from investors, struggling Australian surfwear company Billabong ditched the rescue plan it had agreed with one investment fund to sign up with a different consortium offering a better deal. US funds Oaktree Capital and Centerbridge Partners will invest A$135m to refinance the business, and supply another A$360m in loans. Former Eddie Bauer leader Neil Fiske was named as CEO, Billabong's fourth in a year.

Adbrands Weekly Update 29th Aug 2013: Australian surfwear specialist Billabong reported dismal results for its full year, further emphasising its dire position. The company is struggling to persuade its banks and shareholders to accept a vital rescue buyout from US investor Altamont Capital, despite punitive interest rates and break clauses. As if to focus investors' attention, the group revealed a massive A$860m loss for the year (around US$775 and more than three times' the company's market value) as a result of a huge impairment charge against the value of its brands. Revenues slumped by almost 14% to A$1.34bn.

Adbrands Weekly Update 18th Jul 2013: Australian surfwear company Billabong was saved from imminent meltdown after securing an expensive refinancing deal with US investment firm Altamont Capital Partners. The agreement, which follows almost a year of rescue negotiations with several different potential partners, will allow the group to pay off A$300m of debt, and Altamont is expected to become Billabong's single biggest shareholder with 40% of equity. Former Oakley CEO Scott Olivet takes over from Launa Inman as CEO. It is a sign of how desperate was Billabong's position that it accepted a deal that involves paying Altamont a whopping 12% interest on its new loan and also surrendering US surfwear brand Dakine.

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