Billabong is reportedly among several parties to submit a proposal to SurfStitch’s administrators, John Park, Quentin Olde and Joseph hansell of FTI Consutling group.
Billabong International is understood to have submitted an expression of interest to the ailing brand, and is considered the frontrunner in a field that also includes local and offshore trade and private equity buyers, according to a news announcement on the Australian Financial Review this morning.
Billabong previously sold its 51% interest in surfstitch.com to SurfStitch co-founders Justin Cameron and Lex Pedersen for about $35 million back in 2014, months before SurfStitch’s initial public offering.
The collapse of the online retailer could well be reason for the renewed interest from Billabong, which had been moving away from multi-brand retailing and focussing primarily on the Billabong brand. Billabong CEO Neil Fiske, has steered the surf company away from selling other brand’s apparel, instead setting up dedicated Billabong and RVCA bricks and mortar and online stores.
Billabong posted a $77 million loss earlier this year citing a weak Australian retail market as the cause. The move to snap up the still profitable SurfStitch could see the turnaround needed to see their stock surging towards the close of this financial year.
“Looking ahead, market conditions remain challenging, particularly in Australia, but we see opportunities for sustained earnings growth” said Fiske.
Billabong expects 2018 EBITDA, excluding significant items, to exceed 2017’s $51.1 million.