Billabong’s Recent Nose Dive
Billabong is a popular Australian company whose business includes surf, skate, snow, sports apparel, accessories, and hardware. The company started in 1973 in Gold Coast, Queensland, Australia and through their four decades of business they have established brands such as Element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf, Xcel, Tigerlily, Sector 9, DaKine, and RVCA brand names. In 2008, the company witnessed peaking numbers with profits of $158 million and $1.2 billion in revenue. As the economy came to a spiraling downfall, the Australian clothing brand was no exception to the recession. Many of their business making decisions in acquisitions cost the company millions of dollars. Resulting from the loss, Billabong had to make a corporate decision of selling their Nixon watch brand to help cushion some of their debt. Following their profitable year they acquired Sector 9, their now skateboard subsidiary, in which they spent an undisclosed amount. Few months later, the acquisition of an online retailer, Swell.com, was also purchased for an undisclosed amount. DaKine was purchased for $100 million expanding their market into backpacks, luggage, and accessories. Billabong also bought out some small clothing retail stores as a means of brick and mortar instead of building their own flagship buildings. The company took many hits over the last couple of years foreshadowing their surf brand wipeout. They lost many of their wholesale suppliers who were mainly independent surf shops and also the loss of PacSun, its largest North American buyer, who started manufacturing their own surf and swim wear. A group of private equity firms that included, Altamont Capital and Blackstone Group offered a loan package to help reduce the debt of the brand. The package included an estimated $325 million bridge loan, purchase of the DaKine brand for $64.4 million, and a newly hired chief executive officer. Launa Inman who is the current CEO...
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