Bong in big trouble

[channels]

When the death throws of Billabong finally finish, what do you reckon Hollowed Out will post about?

[Karlos]

I scored a brand new pair of AI signature boardies at the Chatswood Vinnies last week for $4. Even had a wax comb in the pocket. Treated myself to a nice big lunch after that at one of the Asian food halls. Choice.

[steve shearer]

Ice those Karlos, could be worth big bills one day.

[Karlos]

Yeah I thought that to, but you know something Steve, they really are a good pair of boardies.

[Nick Carroll]

Shows how out of touch I am. I didn't know Bong owned Kirra Surf. Peter Turner must have got a few quid for that sale in the day.

He did. And a unit in the high rise. Prett happy last time I talked to him He was just back from a few (6?) months in the Maldives or somehwhere.
He owned the site, too.

Maybe Bong should bring back the Gilltraps Car Museum that used to be there, more profitable than kirra surf right now.Mow don't tell us you never went to Gilltraps Nick?

Never did.

Billabong's purchasing bender sure enriched a few old core guys.

Gary Timperley and his brother joined Pete Turner in the happy corner when bong bought out their Byron shops for a considerable whack.

[Hollowed out]

look like Naude stole Bong for $287 M which will be welcome news for many as there is now a chance Gordon and a bunch of others can get it stripped back to the core and away from those institutional vultures.
Money on parko to stay with Bong with a big share incentive to help them regain cred and see them keep backing the bong WCT events.
Interesting days to come and hope that Bong stays domicile here and not become usa owned.

[Nick Carroll]

If the deal goes ahead, Billabong WILL be USA owned.

Sycamore Partners is a New York based private equity company which for a little while now has been making quite carefully targeted purchases and investments in retail clothing and supply firms. One imagines they see Bong in that light. All their investments have been made in US domiciled companies. They will not want to invest substantial capital in a company and continue to let it be run out of Australia, where they may well perceive many of the company's difficulties can be sourced. Naude lives in CA, it's hard to see how this deal would cause him to move across the Pacific.

Would be amazed if Sycamore lets the company keep spilling blood into professional surfing at the rate it's been doing for the past 10 years. To many marketing people out there in actual business world, that sort of expenditure would seem ludicrous. They'd probably be better off spending a good chunk of it on developing more effective online sales.

I say bloody good luck to all of 'em and would expect this change to shift Billabong further into the future, ie an effective brand-based business run leaner and cleaner, rather than back into a former quasi-cottage-industry existence, where it clearly can't go with any success.

[Hollowed out]

If the deal goes ahead, Billabong WILL be USA owned.

Sycamore Partners is a New York based private equity company which for a little while now has been making quite carefully targeted purchases and investments in retail clothing and supply firms. One imagines they see Bong in that light. All their investments have been made in US domiciled companies. They will not want to invest substantial capital in a company and continue to let it be run out of Australia, where they may well perceive many of the company's difficulties can be sourced. Naude lives in CA, it's hard to see how this deal would cause him to move across the Pacific.

Would be amazed if Sycamore lets the company keep spilling blood into professional surfing at the rate it's been doing for the past 10 years. To many marketing people out there in actual business world, that sort of expenditure would seem ludicrous. They'd probably be better off spending a good chunk of it on developing more effective online sales.

I say bloody good luck to all of 'em and would expect this change to shift Billabong further into the future, ie an effective brand-based business run leaner and cleaner, rather than back into a former quasi-cottage-industry existence, where it clearly can't go with any success.

well Nick if what you say does go down then staff from Bong HQ are pretty fcuked and the GC will loose one of it's biggest companies. Me thinks there will be a deal done to support Bong staying here (not unlike the Gov. assistance Holden got but way smaller and without such waste). You being associated with ASL would have to have some insght as to the damage done if Bong deserts our shores. Got any thoughts?

[Nick Carroll]

It's really difficult to say, I don't have any special insights, I can't see them "deserting our shores", it's not a zero sum game nor is it a question of patriotism or whatever. Australia is an important market in anyone's language. You don't "desert" a market.

But it's hard to see a US owned Billabong being run from Burleigh.

[Nick Carroll]

ka boom. that's that then.

http://www.smh.com.au/business/billabon ... 2nmyw.html

[tootr]

Hmmm..

Mkt cap now $112m, total liabilties $720m odd as at December half....

That's all she wrote!

[Natho]

No takers for Rip Curl yet either. Like Billabong the Curl is getting cheaper every day. Warbick & Singer want out, but how low are they prepared to go? looks like they kinda missed the boat in timing the 'behind the dunny block' sale of the Curl, which has been the industries worst kept secret for some time.

[Hollowed out]

Billabong wiped out as suitors flee
Date
June 4, 2013 - 4:56PM
131 reading nowRead later
Zoom in on this story. Explore all there is to know.
US Australian

inShare
Pin Itsubmit to redditEmail articlePrintReprints & permissions

Billabong hopes to sell assets to pay down debt. Photo: Bloomberg
Elizabeth Knight: Billabong jilted as suitors end courtship
Timeline: Billabong's spectacular fall from grace
Troubled surfwear retailer Billabong has issued its third profit warning in six months as it revealed this morning that potential takeover suitors have walked away from a deal.

Shares in the company plummeted as much as 58 per cent after it said it was instead discussing refinancing options with the two consortiums - one led by its former US boss Paul Naude and private equity firm Sycamore Partners, and the other by private equity firm Altamont Capital Partners and US clothing group VF Corp.


Bye-bye Billabong? The share price chart shows the peaks of 2007 are far away.
"This is the worst fear that we had," said IG markets strategist Evan Lucas. "They are now in the situation where they are going to have to be completely refinancing; that will obviously dilute their share price and dilute any form of debt that they've already got, which is the concern they've had the entire time."

Advertisement
Billabong and its shareholders have endured a horrible year since rejecting a bid of $3.50 a share, valuing the company at $850 million, from rival private equity firm TPG Capital Management in February 2012.

Billabong's shares sank to an all-time low of 19 cents this morning after coming out of a trading halt, before recovering slightly to end the day at 23 cents, still down nearly 50 per cent. The stock has tumbled from a high of $14.06 six years ago.

Plagued with high debt from an ill-timed expansion and struggling as its brands fell out of favour, the company has sold assets, closed stores, replaced its chief executive and embarked on a new strategy as a series of takeover proposals came and went.

Both the Sycamore and Altamont consortiums had put forward initial bids worth $544 million in December and January before conducting due diligence. Billabong then entered into exclusive talks with the Sycamore consortium about a reduced $300 million offer.

Billabong said this morning it was now discussing "alternative refinancing and asset sale transactions" with the two consortiums and any proceeds would be used to repay its existing syndicated debt facilities in full.

"It's our intention to conclude these discussions as soon as practically possible while aggressively reducing costs across all our global operations," Billabong Chairman Ian Pollard said in a statement.

Profit downgrade

Billabong said that weaker trading in Australia and higher-than-expected start-up losses in its Surfstitch Europe business meant earnings before interest, tax, depreciation and amortisation (EBITDA) would be $67 million to $74 million.

It was the third time since December that Billabong had downgraded its earnings outlook from an August forecast of $100 million to $110 million.

"It certainly does not look like a great place to be and there'll be a lot of questions in regards to how their reporting was done considering how bad the company looks," said Mr Lucas.

The company said Australian retail year-to-date sales on a comparable store basis were down 5.4 per cent from the previous corresponding period, while gross profit dropped 2.3 per cent.

Retail in the Americas was slightly ahead of plan for the half, but the company said it was considering the sale of its Canadian retail chain West 49.

Reuters, AAP





Read more: http://www.smh.com.au/business/billabon ... GnIV69just a while ago ...cheap Bong owned stuff now at a store near u
Billabong wiped out as suitors flee
Date
June 4, 2013 - 4:56PM
131 reading nowRead later
Zoom in on this story. Explore all there is to know.
US Australian

inShare
Pin Itsubmit to redditEmail articlePrintReprints & permissions

Billabong hopes to sell assets to pay down debt. Photo: Bloomberg
Elizabeth Knight: Billabong jilted as suitors end courtship
Timeline: Billabong's spectacular fall from grace
Troubled surfwear retailer Billabong has issued its third profit warning in six months as it revealed this morning that potential takeover suitors have walked away from a deal.

Shares in the company plummeted as much as 58 per cent after it said it was instead discussing refinancing options with the two consortiums - one led by its former US boss Paul Naude and private equity firm Sycamore Partners, and the other by private equity firm Altamont Capital Partners and US clothing group VF Corp.


Bye-bye Billabong? The share price chart shows the peaks of 2007 are far away.
"This is the worst fear that we had," said IG markets strategist Evan Lucas. "They are now in the situation where they are going to have to be completely refinancing; that will obviously dilute their share price and dilute any form of debt that they've already got, which is the concern they've had the entire time."

Advertisement
Billabong and its shareholders have endured a horrible year since rejecting a bid of $3.50 a share, valuing the company at $850 million, from rival private equity firm TPG Capital Management in February 2012.

Billabong's shares sank to an all-time low of 19 cents this morning after coming out of a trading halt, before recovering slightly to end the day at 23 cents, still down nearly 50 per cent. The stock has tumbled from a high of $14.06 six years ago.

Plagued with high debt from an ill-timed expansion and struggling as its brands fell out of favour, the company has sold assets, closed stores, replaced its chief executive and embarked on a new strategy as a series of takeover proposals came and went.

Both the Sycamore and Altamont consortiums had put forward initial bids worth $544 million in December and January before conducting due diligence. Billabong then entered into exclusive talks with the Sycamore consortium about a reduced $300 million offer.

Billabong said this morning it was now discussing "alternative refinancing and asset sale transactions" with the two consortiums and any proceeds would be used to repay its existing syndicated debt facilities in full.

"It's our intention to conclude these discussions as soon as practically possible while aggressively reducing costs across all our global operations," Billabong Chairman Ian Pollard said in a statement.

Profit downgrade

Billabong said that weaker trading in Australia and higher-than-expected start-up losses in its Surfstitch Europe business meant earnings before interest, tax, depreciation and amortisation (EBITDA) would be $67 million to $74 million.

It was the third time since December that Billabong had downgraded its earnings outlook from an August forecast of $100 million to $110 million.

"It certainly does not look like a great place to be and there'll be a lot of questions in regards to how their reporting was done considering how bad the company looks," said Mr Lucas.

The company said Australian retail year-to-date sales on a comparable store basis were down 5.4 per cent from the previous corresponding period, while gross profit dropped 2.3 per cent.

Retail in the Americas was slightly ahead of plan for the half, but the company said it was considering the sale of its Canadian retail chain West 49.

Reuters, AAP





Read more: http://www.smh.com.au/business/billabon ... z2VEGnIV69

[Nick Carroll]

Rip Curl aren't in the kind of strife Billabong are now in, not even close.

They have owners who would like to sell, that's different from being underwater.

I doubt Zosea are massively concerned, they are spreading a wide net for partners in the 2014 WCT, they're gonna save the surf cos a lot of money in the process, and Billabong currently holds two of the most saleable franchises on the tour - Teahupoo and Pipeline.

The Billabong employees, argh, they've been hurting and watching this go on for too long, I feel for many of them, there's a lot of good people who'll have to cop this sweet.

[Hollowed out]

Nick ,If RC do sell it will most likely be bankers or VC who buy it so it will go the Bong way because thats how they operate so future of industry looks shaky.
Also what do you know about Insight clothing rumoured to be in liquidation and CEO or FCS/Surf Hardware flicked for an aggressive banker brought in to kick heads and sell the whole show (as they have been trying to do for years)
Strange days ideed mama

[BA]

Dooma was working behind the counter at RC Manly yesterday. They must be in trouble. Not a hipster to be seen.

[Natho]

Yeh Rip Curl certainly are not in trouble like Billabong as Nick pointed out. Problem is Billabong a bringing the market value of such companies down with it. Certainly not to the lows of Bong though.

[Nick Carroll]

Yeah I am not that interested in Insight Clothing

FCS/Surf Hardware might be better off without the bank investor ownership, they seem perfectly positioned to take advantage of the growth of surfing as a passion/recreation as opposed to that of a fashion trend.

Natho I suspect an intelligent investor could pick the difference between a healthy company and a debt ridden horrorshow – it's not an issue of a global niche in crisis so much as a company running into a double brick wall. Plenty of that going on elsewhere in the apparel universe.

I think overall the best guide to the future of the so called "surf industry" is Quiksilver -- it was the first surf major to publicly list and it's been the one to watch throughout as it has tweaked, fcuked up, and adapted to changes in the business environment.

Quik now appears to have cleared the worst of its debt worries and has a forceful and decisive management crew in charge.

It still has a few bombs in the glovebox, some of 'em a bit unexpected, but they aren't being weighed down the way Bong is.