Billabong has reduced its brand value to zero, following an annual statement detailing trebled losses and a share price drop of over 60 percent.
The company started in 1973, with Gold Coast shaper, Gordon Merchant, sewing boardshorts on his kitchen table, and gradually grew into one of the corporate giants of the surf industry. However, following a failed campaign of international expansion, and poor sales throughout all of the major markets, the company became laden with debt.
A statement released today mentions a net loss (after tax) for the year of $859.5 million, sending its shares plummeting a further 16 percent. The brands Element, Palmers and Beachculture, which form part of the Billabong group, have also had their values stripped to zero.
“They have had an absolutely ginormous writedown, and that’s the only way that you can describe it,” said IG Markets analyst Evan Lucas.
Central to the company’s fiscal woes is its failure to maintain sales in key markets such as Europe and the US. Furthermore, it has been suggested that the brand, which once exuded countercultural grit, has somewhat lost its edge within the youth market.
Despite the apparent devastation, Billabong’s chairman, Dr Ian Pollard, retains a degree of optimism for the future.
“Financial stability is critical to rebuilding Billabong” said Pollard. “Liquidity has been secured and we are within weeks of finalising our long term funding arrangements. Our shareholders, our staff and our various business partners can be confident that we have a strong future following the most challenging period in the Company’s history.”
Measures taken to limit damage and revive the perishing company include the closure of 158 “under-performing” stores, the sale of the DaKine brand, and likely separation from a joint venture with Nixon.
Latest episode of Fergal Smith's fantastic Growing series
Lucas Silveira charging heaving pits at Mexpipe
A double serving of sickness for Kalani David during his fix of tropical barrels
An auto-follow camera drone to capture your extreme endeavours
The ASP announces that the 20th Annual Siargao Cloud 9 Surfing Cup will offer points to both the ASP Qualifying Series and the Asian Surfing Championship