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Billabong to review multi-brand ecommerce operations
07
Feb '14
Billabong has decided to undertake a strategic review of its multi-brand ecommerce businesses SurfStitch.com (“SurfStitch”) in Australia and Europe, and Swell.com (“Swell”) in North America. Billabong has appointed international investment banking firm Guggenheim Securities to assist in this review.
 
Billabong CEO Neil Fiske said the strategic review of SurfStitch and Swell would consider a range of options as part of the Company’s wider ecommerce strategy.“ As previously announced at our December AGM, our strategic priority is to focus on our direct to consumer mono-brand model across our retail and online operations.
 
This review will assist us in evaluating options for the multi-brand SurfStitch and Swell ecommerce businesses,” said Mr Fiske. “Given the consistent growth and performance of these assets, we believe that there is an opportunity to progress our mono-brand ecommerce strategy and at the same time unlock value for Billabong shareholders.”
 
Since launching in Australia seven years ago, SurfStitch has made an impression with its award-winning, innovative use of technology. It has quickly assumed a market-leading position in Australia and Europe, while Swell has also grown in the North America market.
 
Billabong owns North American-based Swell in its entirety and is a majority 51% shareholder in SurfStitch. The joint venture partners that own the remaining 49% interest in SurfStitch have appointed JP Morgan to represent their interests in the process.
 
Following constructive discussions with the joint venture partners as to Billabong’s wider ecommerce strategy and their future vision for the SurfStitch business, it’s been jointly agreed to explore future options.
 
The appointed advisors will evaluate a range of options to maximise the value of these businesses, including consideration of conducting an international sale process.
 
The Company also announces that it has entered into a new contract with Pat Tenore,the founder of RVCA, fastest growing global brand. “Signing Pat to a new agreement which extends the relationship out to 2018, is a key part of our strategic focus on our big three brands. 
 
There are few people with the creativity and impact of Pat Tenore. He is a unique force, visionary, and brand builder within the industry. The RVCA brand has tremendous potential globally and this arrangement aligns Pat’s incentives with those of our shareholders to maintain RVCA on a path of strong double digit earnings growth over the next five years.”
 
Finally, the Company also confirms that the previously announced sale of West 49 has closed. The final proceeds of approximately CAD$3m were below the previously announced range due to seasonal end of year trading and other factors contributing to lower working capital on closing.
 
"I am pleased that the Company has completed another of the simplification initiatives we have laid out in our turnaround plan. We continue to have an ongoing relationship with the purchaser, YM Inc to ensure we continue to serve our consumers in the Canadian market.” said Neil Fiske, CEO of Billabong.

Billabong


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