Skip to content Skip to navigation

Billabong says total sale off, possible asset sale on

Print Friendly and PDF
  • Billabong says total sale off,

 

Billabong announced this afternoon that negotiations to sell all of the company have ended without a deal, but that it is still in talks with Sycamore Partners and Altamont Capital Partners about refinancing its capital structure and selling pieces of the company.

The aim of the potential refinancing and sale of assets is to pay off the company’s existing debt obligations and to be in a better position to implement its transformation plan, Billabong said in a release.

Neither party has been granted an exclusivity period for the potential transactions, and both have submitted proposals.

While the talks continue, Billabong said it is aggressively moving to cut costs around the globe. I am getting reports about layoffs today at the company.

OUR SPONSORS

Billabong also said it would ask to have trading in its stock restarted. The stock has not been traded while sale discussions were ongoing. It last traded at 45 cents.

A company spokesman said in an interview that this latest development means Billabong will remain a publicly listed company in Australia, that shareholder's will not be asked to pay for a new equity raising, and the same two parties are still interested in being involved with Billabong, even though a change of control will not happen.

Billabong is also focused on completing a final deal as soon as possible, the spokesman said.

Earnings guidance lowered

The company also lowered its earnings guidance again, citing weakness in Australian retail, and higher than expected losses from launching online retailer SurfStitch in Europe.

In Australia, retail comps year-to-date are 5.4% below the same period last year, while the wholesale division is on plan.

OUR SPONSORS

Americas is slightly above plan, and the Europe region remains weak.

Billabong lowered its EBITDA guidance to a range of AUD $67 million to AUD $74 million, excluding special items and Nixon. Previously, the company had expected EBITDA of AUD $74 million to AUD $81 million.

West 49

The company also confirmed it is exploring the sale of Canadian retail chain West 49, which Shop-eat-surf reported last week.

See Page 2 for the official press release

 


Press Release:

COMPANY UPDATE


GOLD COAST, 04 June, 2013: On 9 May 2013, Billabong International Limited (“Billabong” or the “Company”) requested that its securities be voluntarily suspended from quotation pending an announcement with regard to possible transactions affecting the Company, including in connection with the bid process announced on 14 January 2013.


Billabong today announces that change of control discussions with the Sycamore Consortium and the Altamont / VF Consortium have now concluded.


Billabong also announces it is currently in discussions with Altamont Capital Partners (“Altamont”) and in discussions with Sycamore Partners (“Sycamore”) regarding proposals presented to the Company for alternative refinancing and asset sale transactions, the proceeds of which would be used to repay in full the Company’s existing syndicated debt facilities (“Refinancing”). No period of exclusivity has been granted to either party with regards to the potential Refinancing.


“The Refinancing is intended to provide the Company with a comprehensive solution and an appropriate capital structure, allowing it to continue its reform agenda,” said Billabong Chairman Ian Pollard. “It’s our intention to conclude these discussions as soon as practically possible while aggressively reducing costs across all our global operations.”


There is no guarantee that binding documentation acceptable to Billabong will be agreed with either Altamont or Sycamore in relation to the potential Refinancing transaction. In the meantime Billabong shareholders do not need to take any action in relation to this matter.

Billabong trading update

Australia: Australasian trading is below expectations, principally in Australian bricks and mortar retail (excluding ecommerce). Whilst Australian wholesale is on plan, our performance in Australian retail is below last year. On a comparable store basis, year to date sales are 5.4% below the previous corresponding period and gross profit is 2.3% below the previous corresponding period.


Americas: The Americas is slightly ahead of plan for the half. Retail in particular has improved. It should be noted that June is an important month, especially for our wholesale business in the northern hemisphere, and earnings can be volatile depending on shipping cycles.

Europe: Europe remains weak, especially for our principal surf brand Billabong, as was largely anticipated in the guidance provided in our February announcement. Our ecommerce start-up losses in SurfStitch Europe (which we consolidate but only have a 51% interest in) have been $4m larger than anticipated and we are taking appropriate steps to limit these losses.

Summary: The February guidance provided by Billabong was for EBITDA in a range of $74m to $85m which included up to $4m from our equity accounted share of Nixon NPAT in the top end of the range. Excluding the Nixon equity accounted share of associates the range would have been $74m to $81m.

As a result of the weaker trading in Australia and the higher than expected start-up losses in SurfStitch Europe we now expect EBITDA (excluding any equity accounted share of Nixon NPAT and before Significant and Exceptional Items) to be between $67m to $74m.

Further, as part of the focus on costs and overall business performance, the Company is exploring the possible sale of Canadian retail chain West 49.


Based on the information in this announcement, the Company intends to seek its reinstatement to trading.

 

More news

Last updated: : 07/27/2017 - 15:36

Kering released details about Volcom's first half results today. We have the numbers, and talk to CEO Todd Hymel about what they say about Volcom's business and the overall market.

Last updated: : 07/26/2017 - 12:14

Given the skeptical view of environmental issues in the new administration, we talk with the SIMA Environmental Fund President about the need for the industry to come together to protect the future of the surfing lifestyle and business

Last updated: : 07/25/2017 - 04:21

Details about Vans' stellar Q2, plus information about the brand's eye-popping store comp increases

Last updated: : 07/26/2017 - 12:13

Doug Palladini shares the thinking behind Vans first proper headquarters in 51 years, and we discuss his first year as company President

Last updated: : 07/24/2017 - 11:28

Swim brands from across the world came out to Miami Swim Week to show their Spring and Resort 2018 lines

Last updated: : 07/24/2017 - 06:15

Billabong hosted a cocktail party for retailers Sunday at the W Hotel during Miami Swim Week

Last updated: : 07/21/2017 - 09:30

We talk to Eric about why he is optimistic about "craft" retail and the industry, why retailers shouldn't take money for windows from brands that have grown beyond the core, and which newer brand may be on the brink of big things

Last updated: : 07/19/2017 - 16:14

Partner Stephen Bruner on barware brand Corkcicle's growing presence at surf retail and why they think their boutique approach is an advantage over more widely distributed water bottle competitors

 

Last updated: : 07/18/2017 - 07:56

An interesting talk with Frank Messmann about the challenging hardgoods market, future plans for Penny, and why he has added brands like Arbor to the Absolute portfolio

Last updated: : 07/17/2017 - 14:39

The first ever Agenda Festival opened its doors to the public Saturday in Long Beach for a music and shopping experience in skate, surf, street culture, food and art