Billabong may sell its e-commerce businesses

Australian surfwear company Billabong International revealed details of its turnaround strategy, which includes the potential sale of its two e-commerce businesses, SurfStitch and Swell. This announcement comes shortly after the general meeting held in December, when shareholders

gave their nod of approval for the refinancing deal for Billabong, which was funded by US private equity firms Oaktree Capital Management and Centerbridge Partners to reduce debt and create a financial platform for the turnaround plan.

Billabong

has appointed international investment banking firm Guggenheim Securities to help its strategic review of its multi-brand e-commerce sites, Surfstich.com and Swell.com. Neil Fiske CEO of Billabong, states that the review of the two sites is part of a larger range of options in the company's new e-commerce strategy.

 

Billabong looking to shed its multi-brand online sites

"As previously announced at our December AGM, our strategic priority is to focus on our direct to consumer mono-brand model across our retail and online operations. This review will assist us in evaluating options for the multi-brand SurfStitch and Swell e-commerce businesses," said Fiske in a press release.

"Given the consistent growth and performance of these assets, we believe that there is an opportunity to progress our mono-brand e-commerce strategy and at the same time unlock value for Billabong shareholders." Both online sites sell products from other brands and a sale of the two would allow Billabong to focus on its main brand.

The

Australian surfwear company owns hundred of the North American-based Swell and is a 51 percent majority shareholder in Surfstitch, which currently has a market leading position in Europe as well as Australia. The joint venture partners that own the remaining 49 percent interest in SurfStitch have named JP Morgan as their representative during the review and potential sale.

Billabong adds that the appointed advisers will "evaluate a range of options to maximize the value of these business, including consideration of conducting an international sale process".

The surfwear company has also announced a new contract with Pat Tenore, founder of global brand RVCA and one of Billabong fasting expanding labels. "Signing Pat to a new agreement which extends the relationship out to 2018, is a key part of our strategic focus on our big three brands. The RVCA brand has tremendous potential globally," added Fiske. The company also added that the sale of West 49 had been finalized, another key step in Billabong turnaround plan.