Billabong (clothing)
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Billabong International Limited is an Australian company focused on
surfing Surfing is a surface water sport in which an individual, a surfer (or two in tandem surfing), uses a board to ride on the forward section, or face, of a moving wave of water, which usually carries the surfer towards the shore. Waves suitabl ...
, primarily a
clothing Clothing (also known as clothes, apparel, and attire) are items worn on the body. Typically, clothing is made of fabrics or textiles, but over time it has included garments made from animal skin and other thin sheets of materials and natural ...
retailer that also produces accessories, such as
watch A watch is a portable timepiece intended to be carried or worn by a person. It is designed to keep a consistent movement despite the motions caused by the person's activities. A wristwatch is designed to be worn around the wrist, attached by ...
es and
backpack A backpack—also called knapsack, schoolbag, rucksack, rucksac, pack, sackpack, booksack, bookbag or backsack—is, in its simplest frameless form, a fabric sack carried on one's back and secured with two straps that go over the shoulders ...
s, and
skateboard A skateboard is a type of sports equipment used for skateboarding. They are usually made of a specially designed 7-8 ply maple plywood deck and polyurethane wheels attached to the underside by a pair of skateboarding trucks. The skateboarde ...
and snowboard products under other
brand name A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
s. Founded in 1973 by Gordon and Rena Merchant, the company first traded on the
Australian Securities Exchange Australian Securities Exchange Ltd or ASX, is an Australian public company that operates Australia's primary securities exchange, the Australian Securities Exchange (sometimes referred to outside of Australia as, or confused within Australia as ...
in August 2000. The name "
billabong Billabong ( ) is an Australian term for an oxbow lake, an isolated pond left behind after a river changes course. Billabongs are usually formed when the path of a creek or river changes, leaving the former branch with a dead end. As a result ...
" is derived from the
Wiradjuri The Wiradjuri people (; ) are a group of Aboriginal Australian people from central New South Wales ) , nickname = , image_map = New South Wales in Australia.svg , map_caption = Location of New South Wales in AustraliaCoordinates: , ...
word ''bilabaŋ'' that refers to a "creek that runs only during the rainy season". As of September 2013,
Von Zipper VonZipper is a subsidiary of the American surfing brand Boardriders, Inc., and specializes in eyewear for surfing, skateboarding, skiing, and snowboarding - sunglasses, goggles, and optics. It was founded in 2000 in San Clemente, California ...
, and Element were two of the prominent brands that Billabong owns. Honolua Surf Company, Kustom, Palmers Surf, Xcel, Tigerlily,
Sector 9 Sector 9 is a skateboard manufacturer and subsidiary of Bravo Sports. The company was started in La Jolla, California in 1993 by cofounders Steve Lake, Dave Klimkiewicz, Dennis Telfer, and Tal O'Farrell.Debra Phillips, G. David Doran, Elaine W. T ...
, and RVCA were the company's other brands. In 2018, Billabong International Limited was acquired by Boardriders, Inc, owner of rival brand Quiksilver. From late 2012 onwards, following the company's decline in the period since 2008, Billabong International has been the subject of several protracted bidding and takeover processes in which the company's former United States chief Paul Naude has been a participant. During one period, Billabong used a corporate turnaround strategy to return the company to profitability, which it achieved in 2014. In December 2016, former chief executive Matthew Perrin was found guilty of fraud and forgery by a jury in the district court in Brisbane, and was sentenced to jail in January 2017.


History


Early history

Billabong was founded in the
Gold Coast, Queensland The Gold Coast is a coastal city in the state of Queensland, Australia, approximately south-southeast of the centre of the state capital Brisbane. With a population over 600,000, the Gold Coast is the sixth-largest city in Australia, the nati ...
, Australia, in 1973 by Gordon Merchant. At first, he designed and created board shorts at his home, and then sold them to local surf shops. Surfers soon realized the durability of Merchant's shorts that was the result of his triple-stitching technique. Merchant understood that his company needed to expand to achieve success, so Billabong started to sponsor contests, which increased the public's awareness of Merchant's products, and the company expanded. By the 1980s, Billabong board shorts were present throughout Australia. Based upon his success in Australia, Merchant decided to export Billabong's products, and by the late 1980s, Merchant's board shorts were available in other countries, including
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
,
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
, and
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
. In the 1990s, the surf industry as a whole grew significantly, and Billabong was a part of this growth process. The company was first traded on the Australian Securities Exchange 2000, which provided the company with the funds to further expand and acquire other companies.


Acquisitions

As the company developed further, it acquired new brands and retail outlets to move beyond the wholesale business, and the first decade of the 21st century was a particularly active period of expansion for Billabong.
Von Zipper VonZipper is a subsidiary of the American surfing brand Boardriders, Inc., and specializes in eyewear for surfing, skateboarding, skiing, and snowboarding - sunglasses, goggles, and optics. It was founded in 2000 in San Clemente, California ...
, an eyewear brand, was acquired in early 2001 and the acquisition of skateboarding apparel and hard-good brand Element was announced in July 2001. The acquisition of the Kustom surf shoe brand, as part of Billabong's purchase of the Australian Gold Coast-based Palmers Surf company, was disclosed in September 2004. The following year in December, an official press release was published to announce the acquisition of
Nixon Inc. Nixon is an American wristwatch, watches, accessories and audio brand, founded in 1997 in Encinitas, California, United States. Focused on the youth lifestyle market. Currently sold in 80 countries worldwide, Nixon maintains stand-alone retail ...
, a watch and accessories brand in the board-sports market. The acquisition of wetsuit and technical watersport accessories brand Xcel became effective on 1 September 2007, and
Jodhi Meares Jodhi Meares (born 24 March 1971) is an Australian glamour model, television personality and fashion designer. Career Meares took her first steps into the spotlight when she was chosen as a model for Moove, a brand of flavoured milk. In 1992, ...
's former Tigerlily brand was acquired in December of the same year. The Tigerlily decision represented the first time that Billabong had acquired a brand focused exclusively on the 'girls' market, and the management intended to position the new addition so that it complimented the company's own 'Billabongs Girls' line. In 2008, Billabong continued with the consistent acquisition activity that occurred in 2007 and announced four acquisitions over four successive months. Following the acquisition of the Gold Coast store Kirra Surf in May, the company announced its acquisition of the retail operations of Quiet Flight, a retail company on the
East Coast of the United States The East Coast of the United States, also known as the Eastern Seaboard, the Atlantic Coast, and the Atlantic Seaboard, is the coastline along which the Eastern United States meets the North Atlantic Ocean. The eastern seaboard contains the coa ...
that had already been operating licensed Billabong and Element retail outlets in
Times Square Times Square is a major commercial intersection, tourist destination, entertainment hub, and neighborhood in Midtown Manhattan, New York City. It is formed by the junction of Broadway, Seventh Avenue, and 42nd Street. Together with adjacent ...
, New York City. The Quiet Flight deal resulted in the addition of 14 Quiet Flight and Surf Warehouse retail stores, most of which were located in Florida, USA. Then in June 2008, the founders of the Sector 9 skateboard company accepted an offer from Billabong that also included the purchase of the Gullwing skateboard truck brand. Finally, in August, Billabong confirmed the acquisition of board-sport accessories brand
DaKine Dakine is an American outdoor clothing company specializing in sportswear and sports equipment for adventure sports. Founded in Hawaii, the name comes from the Hawaiian Pidgin phrase "da kine" (derived from "the kind"). Now based in Hood River ...
, which specialises in
backpack A backpack—also called knapsack, schoolbag, rucksack, rucksac, pack, sackpack, booksack, bookbag or backsack—is, in its simplest frameless form, a fabric sack carried on one's back and secured with two straps that go over the shoulders ...
s, bags, gloves, and accessories, in a press release that projected that "DaKine is expected to contribute approximately 4% of Billabong International Limited’s Group sales in the 2008-09 financial year". Billabong's retail expansion continued into late 2008 with the November purchase of the United Kingdom (UK)-based 13-store retail chain Two Seasons for an undisclosed sum. Billabong only announced a single acquisition in 2009 with the purchase of Swell, a US-based online retailer of board-sports brands, for an undisclosed sum. Billabong began 2010 with the signing of a 10-year licensing deal with popular skateboard company
Plan B Plan B typically refers to a contingency plan, a plan devised for an outcome other than in the expected plan. Plan B may also refer to: * Plan B, a brand name of levonorgestrel, an emergency contraception drug Film and television * Plan B En ...
, and Plan B subsequently entered into a partnership arrangement with Element. In May 2010, Billabong's retail expansion continued with the acquisition of American surf retailer Becker Surf and Sport in May (the Becker deal included the business's online operations, but not its surfboard operations), followed by the purchase of prominent Canadian action sports retailer
West 49 West 49 Inc., is a Canadian specialty retailer of fashion and apparel, footwear, accessories, and equipment related to the action sports lifestyle. The company was founded in 1987 as Jumbo Entertainment, Inc. to manage the Jumbo Video franchis ...
in late June. Further acquisitions were then announced in the remainder of 2010; the acquisition of apparel brand RVCA was confirmed in July and the label's founder Pat Tenore explained his decision in the Billabong press release: "One of the key things about Billabong is its respect for the creative independence of each of its brands and that level of flexibility will allow RVCA to maintain its identity while benefiting from the support of the wider Billabong group"; after RVCA, Billabong then returned to the retail market and ended the year with the October acquisition of the Australian retail stores
Surf Dive ‘n' Ski Billabong International Limited is an Australian company focused on surfing, primarily a clothing retailer that also produces accessories, such as watches and backpacks, and skateboard and snowboard products under other brand names. Founded in ...
and Jetty Surf—from vendor General Pants Group—for an undisclosed amount.


Collapse

On 16 February 2012, trading in Billabong shares was halted at the company's request because of reports of a 776 million takeover offer from
TPG Capital TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American investment company based in Fort Worth, Texas. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth c ...
, a US
private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a ty ...
firm. On 17 February 2012, Billabong announced its intention to undergo a major restructure. Up to 150 stores closed, and 400 full-time jobs would be lost internationally, including up to 80 in Australia. About 48.5% of its Nixon watches and accessories brand name will be sold to
Trilantic Capital Partners Trilantic Capital Partners (Trilantic) is a global private equity firm focused on control and significant minority investments across a range of industries in North America and Europe managed by Trilantic North America and Trilantic Europe. The f ...
to establish Nixon as a joint venture. The partial sale would give about US$285 (or A$265.78) million in net proceeds to Billabong. Proceeds from the sale will be used to reduce debt. In February 2012,
TPG Capital TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American investment company based in Fort Worth, Texas. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth c ...
made two takeover proposals, neither of which was accepted. Billabong announced that Gordon Merchant, who owns 15% of the company's shares, had rejected both the offers. On 27 August 2012, chief executive Launa Inman presented her four-year plan to try to return Billabong to positive sales growth and increase earnings. The plan included a range of measures with the key focus being on simplifying the business, leveraging its namesake brand, improving its supply chain and e-commerce offerings. The new initiatives are estimated to cost roughly A$80 million. In September 2012, two private equity firms, TPG Capital and
Bain Capital Bain Capital is an American private investment firm based in Boston. It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, and real estate. Bain Capital invests across a range of industry se ...
, were bidding for ownership of Billabong.


Takeover

The company was to finalise a takeover deal with either of two American private equity suitors; a refinancing deal was nearing completion as of 5 June 2013. On 4 June 2013, Billabong stated that it was unable to reach an agreement with US private equity funds
Altamont Capital Partners Altamont may refer to: Places Canada * Altamont, British Columbia * Altamont, Manitoba India * Altamont Road, in south Mumbai United States * Altamont, California ** Altamont Pass, in California * Altamont, Illinois * Altamont, Kansas * Altamo ...
and
Sycamore Partners Sycamore Partners is a private equity firm based in New York specializing in retail and consumer investments. The firm has approximately $10 billion in aggregate committed capital. History Founding Sycamore Partners was founded in 2011 by Stefa ...
, 16 months after the first takeover move emerged. A media report published on 18 July 2013 conveyed that the takeover process had "exploded into acrimony", as two US hedge funds contested the offer from Altamont Partners that was accepted by the company on 16 July 2013. Acting together, the hedge funds claimed that they had made a superior offer to the one that was accepted, whereby a debt-for-equity swap was proposed that would result in a 60% stake in Billabong. As of 19 July 2013, Billabong rejected the claim from hedge funds
Centerbridge Partners Centerbridge Partners is a multi-strategy private investment firm focused on leveraged buyouts and distressed securities. The firm manages over $32 billion of assets
and
Oaktree Capital Oaktree Capital Management is an American global asset management firm specializing in alternative investment strategies. As of March 31, 2022, the company managed $164 billion for its clientele. The firm was co-founded in 1995 by a group that ...
, stating that the proposal in question was conditional, so could not be accepted. As of 23 August 2013, Billabong confirmed that is considering a rival deal from US hedge funds Centerbridge and Oaktree after the company had initially announced that plans to accept a US$300 million loan from an Altamont-led consortium. The two hedge funds offered a higher price than Altamont, as well as a lower interest rate on a loan. Also as of this date, Billabong shares gained 6.8%, to 58.75 cents. A media report on 27 August 2013 stated that Billabong would be moving ahead with the $US325 million refinancing proposal from Altamont and Blackstone. As of the same date, Centerbridge and Oaktree were actively pursuing Billabong directors in relation to their deal that they believe is significantly superior to the accepted proposal. The consortium also claimed that they could finalise the details and a recapitalisation within a brief time period, and would allow Altamont-installed acting boss Scott Olivet to remain if their offer succeeds. The company's chairman Ian Pollard explained:
We are nearing the end of a long process that has caused distraction, impacted on staff morale and has been very costly. The company looks forward to refocusing, reinvigorating its brands and rebuilding the business on a solid, long-term financial footing.
Pollard stated on 29 August 2013 that the chance of Billabong considering the Centerbridge and Oaktree consortium offer was low. At the time of the interview, Pollard explained that Billabong's board is still evaluating the proposal, but also stated that the board is hesitant to overlook the deal brokered with Altamont and Blackstone. As of 21 September 2013, Billabong's deal with Altamont was no longer valid, and the company was in the process of seeking approval from shareholders to finalise an arrangement with Centerbridge and Oaktree, and their affiliates. If brokered, the deal will mean that the Centerbridge and Oaktree consortium will control most of the company's senior debt, it will own up to 40.8% of Billabong's shares, and will also be entitled to install three representatives on Billabong's board. On 21 September 2013, the Centerbridge and Oaktree consortium appointed new chief executive Neil Fiske; as of this date, Billabong was also continuing the search for a buyer for the Canadian skateboard retail chain West 49. The company's sale of the West 49 retail chain was announced on 4 November 2013, with fashion retailer YM Inc. identified as the buyer. West 49 was sold for about CA$9–11 million, and Billabong has also entered into a two-year nonexclusive wholesale agreement with YM Inc. worth approximately CA$34 million. The ownership of 92 West 49 retail stores, located across Canada, was to be transferred through the deal. In January 2014, Oaktree Capital Management and Centerbridge Partners refinanced Billabong's debt for a 40.8 percent ownership. Billabong International, announced that it was selling, with the help of
Guggenheim Securities Guggenheim Partners is a global investment and advisory financial services firm that engages in investment banking, asset management, capital markets services, and insurance services. Organization The firm is headquartered in New York City an ...
, its 51 percent stake in
SurfStitch Billabong International Limited is an Australian company focused on surfing, primarily a clothing retailer that also produces accessories, such as watches and backpacks, and skateboard and snowboard products under other brand names. Founded i ...
and its 100 percent stake in Swell.


Return to profitability

In 2000, the company was
listed Listed may refer to: * Listed, Bornholm, a fishing village on the Danish island of Bornholm * Listed (MMM program), a television show on MuchMoreMusic * Endangered species in biology * Listed building, in architecture, designation of a historicall ...
with sales of A$225 million that grew to A$1.7 billion in 2011. Profits of A$249 million were achieved in 2007. For the six months to 31 December 2011, Billabong experienced a 71% drop in net profit to A$16.097 million. In early 2013, Billabong revealed earnings collapses across core business markets that "decimated its business". Losses in the December half are A$536.6 million. A late August 2013 media report stated, "the Billabong label itself is now deemed essentially worthless, according to Billabong's accounts" following the declaration of an A$859.5 million loss for fiscal year 2013. Billabong's brands were worth A$90 million at the end of June 2013, and on the morning of 27 August 2013, the company stated that global sales of A$1.34 billion were down by 13.5% in reported terms for 2012–13. The company returned to profitability in 2015—for the 2014 earning reports—with a net profit after tax around A$25.7 million. This was first time the company became profitable since 2011.


Awards

In 2009, as part of the Q150 celebrations, Billabong was announced as one of the Q150 Icons of Queensland for its role as an iconic "innovation and invention".


Teams

Billabong sponsors teams of riders in different subcultures who play an ambassador-like role for both the brand and the corresponding lifestyle. As of 26 August 2013, a skateboard team is no longer listed on its website. Surfing is continuing to gain popularity, so more money is being put into it; now Billabong sponsors hundreds of surfers.


See also

* Billabong Pro Jeffreys Bay *
Billabong Pipeline Masters The Billabong Pipeline Masters is an event in surfing held annually at Banzai Pipeline in Oahu, Hawaii. It was established in 1971, and has been sponsored by Billabong since 2007. The event attracts the top 34 surfers from The World Surf Lea ...
*
Billabong Pro Teahupoo Billabong Pro Teahupoo is a professional surfing competition of the World Surf League held at the break Teahupo'o in Taiarapu, Tahiti Tahiti (; Tahitian ; ; previously also known as Otaheite) is the largest island of the Windward group of t ...
*
Billabong XXL The Billabong XXL is a global big wave Big wave surfing is a discipline within surfing in which experienced surfers paddle into, or are towed into, waves which are at least 20 feet (6.2 m) high, on surf boards known as "guns" or towboards. Sizes ...
*
Tribal Gear Tribal Gear, Tribal Streetwear or simply Tribal was launched in 1989 by Bobby Ruiz and his brother Joey as a Southern California lifestyle-inspired clothing brand. History Bobby Ruiz started Tribal Street wear on November 20, 1989, with his broth ...


References


External links

* {{Authority control Sportswear brands Companies formerly listed on the Australian Securities Exchange Clothing companies established in 1973 Clothing brands of Australia Retail companies of Australia Swimwear manufacturers Skateboarding companies Snowboarding companies Surfwear brands Companies based on the Gold Coast, Queensland Sporting goods manufacturers of Australia Surfing in Australia Australian fashion Multinational companies headquartered in Australia Companies based in Irvine, California Australian subsidiaries of foreign companies