Ouch. That’s a big net loss.
Three years ago, Billabong announced they had a strategy to right their sinking ship. If it worked, it would transform the once-flush company into something great again. Recently, though, at a shareholders meeting, the company dropped some bad news: a net loss just shy of $20 million US in 2016.
“2016 was a challenging year for our global action sports industry,” said Ian Pollard, the Billabong International Chair. Although the three big companies under the Billabong umbrella (Billabong, Element, and RVCA) all did alright, it wasn’t enough. “Even with the continued sales growth of our big three brands, operational progress and significant reductions in our costs of doing business, we reported a net loss of $23.7 million Australian dollars ($17.5 million).”
Over the course of the last few years, a few action sports companies have taken a real hit in the wallet. Take Quik, for example. Last year, they filed for Chapter 11 bankruptcy (which is basically just a bail out with some major restructuring), lost/booted a few huge names (think Slater and Reynolds), and basically became a throwback to the ’90s. Billabong is almost in the same boat–maybe their boat isn’t sinking quite as fast, but it seems as though it’s taking on water.
A few months ago, news broke that the company was required to pay somewhere around $45 million to pissed off investors after Billabong “engaged in misleading and deceptive conduct over a series of earnings updates.” The suit said, in a nutshell, that Billabong didn’t hold up its end of the bargain when they failed to continually disclose market information regarding the price of their shares.
So what’s their plan? Well, they’re not closing up shop just yet. Part of their strategy includes selling off smaller companies in order to get rid of about $200 million in debt. Billabong owns XCEL Wetsuits, VonZipper Eyewear, and Tigerlilly among others. They used to own Sector 9, but they managed to unload it earlier this year to Bravo Sports for $12 million.
It seems, though, that bigger brands–at least in surfing–are quickly falling by the wayside in favor of smaller ones. Not everyone wants to end up a corporate billboard. But face it: nearly everything you wear has a logo somewhere on it. Unless you’re making your own clothes, you’re something of a walking advertisement.
