Skip to content Skip to navigation

Billabong acquires RVCA

Print Friendly and PDF
  • RVCA Founder and Creative Director Pat Tenore.

Billabong International Limited continued its acquisition streak Sunday by announcing it has a conditional agreement to buy RVCA.

Terms of the deal were not disclosed because the purchase price is not material to Billabong's results.

Billabong did say RVCA is expected to contribute 2% to Billabong group revenues in the 2010/2011 fiscal year and be neutral to earnings. In the 2008/2009 fiscal year, Billabong recorded $1.67 billion in revenue.

RVCA is relevant in several categories including skate, surf, fashion and Mixed Martial Arts. It also has deep roots in art and music, and has entered the female, New York fashion world with its collection by model-turned-designer Erin Wasson.

RETNA, Pat TenoreIt sells everywhere from fashion boutiques to surf shops, skate shops to Nordstrom. It has also become popular at PacSun stores.

OUR SPONSORS

RVCA, founded in 2001, is considered one of the strongest apparel brands in the market with the potential to someday make the leap to the top-volume tier currently dominated by Quiksilver, Billabong, Volcom, Hurley and O’Neill.

(The artist RETNA with Tenore at the New Image Art Gallery.)

RVCA’s product is in strong demand, and the company needed more financial resources to meet it, I am told.

For Billabong, it continues the company’s strategy of acquiring top brands in different categories. (See timeline below of Billabong’s acquisitions.)

It comes on the heels of the news that Billabong is bidding for Canadian mall retailer West 49, as is Zumiez. Billabong also recently acquired five Becker Surf stores and Becker's online operation, and online retailer Swell.com.

OUR SPONSORS

(Above: Pat Tenore at Agenda last year.)

RVCA in board stores

Here is some RVCA information from the ActionWatch Retail Panel courtesy of Cary Allington. The panel consists of approximately 250 boardsport retailers.

- RVCA is the sixth-largest apparel brand in the ActionWatch Retail Panel and is especially strong in the Ts, wovens, jeans and pants categories. It is also stronger in men's products than in women's.

- RVCA's distribution penetration in the panel is similar to all the other top apparel brands other than Volcom (most top apparel brands are in the 50%-60%-penetration range while Volcom is nearly 80%).

- The ActionWatch same-store panel shows RVCA holding its market share with essentially flat sales (Jan-May 2010 compared with the same period last year). However, sales are up for its male products. The brand has had a huge sales and market share increase in the pants category (non-denim), based largely on strong sales of the Romero series pants.

Helping the backend

Paul Naude, Michael TomsonIn a statement, Billabong North America President Paul Naude said RVCA has done a great job of building its brand and will now benefit from Billabong’s global infrastructure.

“There comes a time in the development of a young brand when the administrative side of doing business can start to consume resources that are better applied to the creative development of the brand.

“I think this is one of the strengths of the Billabong group. We have capabilities in areas including sourcing and the management of the supply chain, distribution and general financing and these types of support structures allow our brands to focus on product and marketing,” Naude said in the release.

(Above: A busy Paul Naude talking with Michael Tomson Friday night at the Waterman's Ball. Paul is the Chairman of the SIMA Environmental Fund Board of Directors and a passionate advocate for environmental protection.)

Billabong’s philosophy of letting its acquired brands keep their identity and operate fairly independently appealed to RVCA founder Pat Tenore.

“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,” Tenore said in a statement.

See Page 2 for a timeline of Billabong's acquisitions

 


 

Billabong’s acquisition history

2001 - Von Zipper (sunglasses), Element Skateboards (skate hardgoods, apparel)

2004 - Honolua Surf Company (retail/wholesale), Kustom Footwear, Palmers Surf (surfboard accessories)

2005 - Airport-based retail chain

2006 - Nixon (watches), Beachworks retail

2007 - Xcel (wetsuits), Tigerlily (contemporary apparel)

2008 - Sector 9 (skate longboards), DaKine (backpacks, accessories), Quiet Flight retail

2009 - Swell.com, investment in Surfstitch.com (both online retailers)

2010 - License Plan B (skate hardgoods), Becker Surf retail, bid for West 49 retail, RVCA

Source: Billabong International Limited website, news stories.

Here is press release today released in the U.S. about the RVCA deal, followed by the release put out in Australia.

JULY 11, 2010: Billabong today confirmed it had reached conditional agreement to acquire the California-based RVCA brand.

Billabong North America President Paul Naude said the acquisition signalled an exciting time in the evolution of RVCA and would afford the brand more creative freedom.

“RVCA has done an incredible job to date in terms of building its brand, differentiating its product and supporting various subcultures through its Artist Network Program, its athletes and its advocates,” said Mr Naude.

“We want to see it build on these strengths and we’ll offer the necessary support to allow it to achieve its potential.”

He said RVCA would benefit from the global infrastructure of the Billabong group.

“There comes a time in the development of a young brand when the administrative side of doing business can start to consume resources that are better applied to the creative development of the brand,” said Mr Naude.

“I think this is one of the strengths of the Billabong group. We have capabilities in areas including sourcing and the management of the supply chain, distribution and general financing and these types of support structures allow our brands to focus on product and marketing.”

Brand founder Pat Tenore said he was looking forward to working with Billabong.

“The original concept of RVCA was, and still is, to be a lifestyle brand that integrated different subcultures within one platform … a platform for likeminded people to produce great art and other creative endeavours, while getting recognition for their contribution and involvement,” said Mr Tenore.

“RVCA will be able to take this concept even further and provide a more extensive support base for the artists, athletes and advocates we work with.

“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.”

See Page 3 to read the release from Billabong headquarters in Australia

 


 

Australia release:

GOLD COAST, 12 July 2010: Billabong International Limited today announced it has reached conditional agreement to acquire the progressive apparel brand RVCA.

RVCA, based in California, was founded in 2000 as an art and design-driven brand focusing on a diverse range of activities that both represent and inspire youth.

Billabong International Limited chief executive officer Derek O’Neill said RVCA was one of southern California’s most exciting emerging brands.

“RVCA is not defined by any single sport or culture. It represents a community of culturally aware youth and is inspired by a diverse range of interests, each of which is underpinned by an original, highly creative design element,” said Mr O’Neill.

“It is a brand that has developed a very strong presence in the United States, particularly in southern California, on the strength of its fashion-forward ranges in categories including art-driven t-shirts, denim, wovens, boardshorts and, more recently, its girls’ line.”

The bulk of RVCA’s revenue is currently generated in the US, while its expansion into other key markets including Australia and Europe is in its infancy.

Brand founder Pat Tenore said he and his existing management team will continue to drive the development and growth of the brand.

“RVCA’s key strength has been its ability to differentiate itself through creative design,” said Mr Tenore.

“By joining with Billabong we can retain our focus on our creative strengths, while leveraging the distribution and supply chain infrastructure and support of the Billabong group.”

It is anticipated RVCA will contribute approximately 2% of Billabong group revenue and will be EPS neutral in the 2010-11 financial year. The purchase price, which is not considered material, remains undisclosed.

The asset acquisition agreement is subject to usual conditions precedent. Billabong and RVCA anticipate the conditions will be satisfied shortly.

 

 

 

 

 

 

 

 

 

More news

Last updated: : 01/18/2018 - 11:29

Executives explain the robust holiday sales for industry customer Journeys. Plus, insights into what is happening with landlords and rents at malls.

Last updated: : 01/17/2018 - 16:43

One category dampened results at the Urban Outfitters chain. Plus, the key internal change that has lead to improved results in women's apparel.

Last updated: : 01/16/2018 - 12:30

How Tom Campion created the results-oriented culture at Zumiez and how that culture came alive in Kelly Sanders, the No. 1 sales person who sold over $1 million in goods in 2017

Last updated: : 01/15/2018 - 09:06

Banks Journal, a clothing brand inspired by coastal living and a love of design, is having a successful start to 2018, especially with fashion accounts

Last updated: : 01/15/2018 - 09:47

We have a comprehensive report from the Swim Collective about upcoming swim trends

Last updated: : 01/11/2018 - 13:42

Kering plans to focus on its luxury roots by exiting Volcom and Puma

Last updated: : 01/11/2018 - 12:03

We spent two days with Zumiez in Colorado and have lots of photos from the 100K event

Last updated: : 01/09/2018 - 08:30

Several news outlets reported GoPro is exploring strategic options, meantime the company is cutting jobs and had to drop prices during the holiday season on some products

Last updated: : 01/10/2018 - 10:06

Cedar Carter, the Director of Marketing for O’Neill Women’s, is exiting the La Jolla Group to join an Australian activewear company called 2XU.

Last updated: : 01/08/2018 - 09:22

Currently, the Swell e-commerce business is off line. We checked in with SurfStitch Australia to find out what is planned for Swell in the future.