Surfing apparel and accessories label Billabong was one of Australia's fastest growing brands during the 2000s, and among the country's most valuable companies. The group delivered additional growth by acquiring a string of other sports apparel and accessories businesses, including Element skateboards and footwear, RVCA clothing, Xcel wetsuits 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 with a group of investors including private equity firm Oaktree Capital. Neil Fiske was appointed as CEO and set about gradually selling or closing under-performing brands and retail outlets to concentrate on a collection of core brands. Revenues for the year to 2017 were around US $750m - less than half the figure achieved a decade earlier - and the group reported a greatly increased net loss on goodwill write-offs against several of its remaining brands. Billabong's main rival, US-based Quiksilver suffered a similar slowdown in the early 2010s as interest in surfing waned. It filed for bankruptcy in 2015, and was itself also acquired by Oaktree Capital. After years of on-off negotiations, Billabong accepted an Oaktree-engineered takeover offer from Quiksilver's parent company Boardriders Inc at the end of 2017. That deal is awaiting shareholder approval. Billabong was founded in 1973 by champion surfer Gordon Merchant and his wife Rena to make surfing apparel and accessories. It began distributing overseas in the 1980s through licensees, and gradually moved into other extreme sports including snow and skateboarding. Merchant stepped down from an executive role in 2010 but remained a director and significant minority shareholder. Subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
Capsule checked 9th February 2018
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Adbrands Weekly Update 11th Jan 2018: The world's two top surfing apparel and equipment companies are to merge after years of on-off negotiations and mutual declining performance in the wake of the explosion of rival "athleisure" brands. Boardriders Inc, parent of the Quiksilver brand, is to acquire Australian rival Billabong for around US $315m. The resulting group will have sales of around $2bn and a network of more than 600 stores in almost 30 countries. Both companies are hoping to put an end to years of struggle. Once Australia's most valuable brand, Billabong came close to collapse in the 2000s following reckless over-expansion. Rival Quiksilver did in fact file for bankruptcy in 2015, emerging from that process under the new corporate name Boardriders. Both companies have been controlled for the past several years by private equity firm Oaktree Capital Management.
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.
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