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Billabong profits wiped out as labels lose favour Billabong profits wiped out as labels lose favour
(about 11 hours later)
Billabong has fallen to a A$860m loss after the value of its surfwear and fashion brands crumbled over two years from $614m to only $90m today. Billabong has fallen to an A$860m (£498m) loss after the value of its surfwear and fashion brands crumbled in two years from A$614m to A$90m.
The Australian company said on Tuesday that global sales for the year fell 13% to $1.34bn, reflecting store closures, Europe's weak economy and the fading allure of its once hot brands. The Billabong label itself is now deemed essentially worthless, according to the company's accounts. The Australian company reported that global sales for the year fell 13% to A$1.34bn, reflecting store closures, weak European economies and the fading allure of its brands. The Billabong label is now deemed worthless, according to the company's accounts. The company has staggered through shake-ups and failed buyout offers. It said it was in the final stages of debt-refinancing negotiations that would allow the business to be rebuilt.
The company has staggered through shake-ups and failed buyout offers. It said it was in the final stages of debt-refinancing negotiations that would allow the business to rebuild.
"2013 has clearly been a tumultuous year with all that has gone on," Peter Myers, the acting chief executive, told investors."2013 has clearly been a tumultuous year with all that has gone on," Peter Myers, the acting chief executive, told investors.
The chairman, Ian Pollard, said Billabong wanted to secure a deal to reduce its $320m debt and fund restructuring "ASAP". The chairman, Ian Pollard, said Billabong wanted to secure a deal to reduce its A$320m debt and fund restructuring.
"Since 1973, Billabong has faced some tough times and has come through them stronger and will do so again on this occasion," he said."Since 1973, Billabong has faced some tough times and has come through them stronger and will do so again on this occasion," he said.
The company has reached a $US470m deal with the US-based Altamont Capital Partners, but the Billabong board is considering a rival offer from the US hedge funds Oaktree and Centerbridge Partners. The company has reached a US$470m (£300m) deal with the US-based Altamont Capital Partners, but the Billabong board is also considering a rival offer from the US hedge funds Oaktree and Centerbridge Partners.
Billabong's 2012-13 loss included a $604m writedown in goodwill and the value of its brands, plus a $129m write-off from the sale of Nixon, its US watch brand. Billabong's 2012-13 loss included a A$604m writedown in goodwill and the value of its brands, plus a A$129m write-off from the sale of Nixon, its US watch brand. Revenue fell by 12.6%, with the effect of currency movements excluded, to $A1.35bn.
Revenue fell by 12.6%, with the effect of currency movements excluded, to $1.35bn. Billabong said it was making progress on the sale of West 49, its Canadian retail chain, and had closed 158 underperforming stores. Billabong shares dropped three cents or 5.3%, to 53.5¢. The company's market value is A$271m, down from A$907m less than two years ago.
Billabong said it was making progress on the sale of West 49, its Canadian retail chain, and had closed 158 underperforming stores.
Billabong shares dropped three cents, or 5.3%, to 53.5 cents.
The company's market value is $271m, down from $907m less than two years ago.