Billabong Lands Investor
As one of the dominant brands in surfwear, Billabong International Ltd. remains one of the category’s popular labels.
But the Australian-based company, with a significant California business, is weathering tough times with a patch of good news.
After numerous takeover bids, slumping sales, and the dismissal of its chief executive, Derek O’Neill, financial-services company Macquarie Group Ltd. in Australia came to the rescue and purchased
23.9 million Billabong shares, or a 5.8 percent stake in the company.
The Australian stock market reacted positively to the news. Billabong’s stock price recently climbed 12.5 percent to 1.17 Australian dollars per share after a low of 93 cents.
Investors and the surf industry are waiting for Billabong to announce its new direction after Aug. 24, following a strategy review accompanied by sales results for fiscal 2012.
Launa Inman, appointed Billabong’s new chief executive in May, said the strategic review will be wide-ranging. “We will need to make substantial changes in how we operate, and we are already making these changes,” she said in a June conference call.
Billabong may need a boost of confidence financially, but it remains a dominant brand at surf shops, according to Action Watch, an action-sports market-research company headquartered in Grass Valley, Calif.
In point-of-sale surveys at 250 independent retailers between January 2007 and May 2012, Billabong has consistently ranked in the top three action-sports brands for the overall apparel category, said Cary Allington, Action Watch’s co-founder. “Billabong’s revenue will go up and down with the industry,” Allington said. “In terms of market share, they are one of the leaders.”
Billabong is very strong in categories such as shorts, boardshorts and women’s fashions.
Other top brands cited in recent Action Watch surveys were Quiksilver and Volcom.—Andrew Asch
