Billabong moves for a return to cool


BillabongBillabong’s new boss has vowed to make the struggling surfwear brand cool again.

Neil Fiske’s seven-point plan to turn around the 40-year-old clothing retailer includes a 25 to 30 per cent reduction in product lines in a bid to reconnect with its traditional teenage base.

“One of the things that’s neat about brands with heritage as deep and as rich as brand Billabong is they always have comeback potential,” the CEO told reporters.

“I’m convinced it will become cool again to that 18  to 15 year old.”

Fiske, a former CEO of US outdoor clothing group Eddie Bauer, hinted Billabong’s restructuring could see job losses on the “non-customer facing, low-value added” back office side, as the company also beefs up it social media, digital marketing and global supply chain functions.

“There are functions … that are probably a little too big and need to be leaned out a little bit,” he said, adding he wanted the company to focus on being a Billabong-brand retailer instead of a multi-brand seller.

“I understand and appreciate the sensitivity around job losses.”

Fiske said it would take between 18 and months and three years to begin turning around the business.

US investment firm Coastal Capital International, which holds a 7.6 per cent stake in Billabong, unsuccessfully sought to remove chairman Ian Pollard and directors Howard Mowlem and Sally Pitkin at Tuesday’s annual general meeting on the Gold Coast.

Almost 34 per cent of shareholder votes went against Pollard’s re-election to the Billabong board, an indication of their displeasure with the company’s recent performance and drawn out refinancing process.

“It could be a reflection of significant lack of understanding by some shareholders of the circumstances which the new directors joined the company and unrealistic expectations of what directors can do in such a short period,” Pollard told reporters.

“A fundamental role of ours, as directors and mine as chairman, is to engage with any shareholders who have views they want to express, especially if they’re firm views.”

Billabong made a $860 million loss in the 2012/13 financial year.

In September, it secured a $586 million deal with Centerbridge and Oaktree Capital Management, after pulling out of an earlier deal reached with rival American private equity firm Altamont, which would have resulted in former Oakley boss Scott Olivet becoming CEO.

“Getting here has been difficult and strenuous for the company, and the distractions and costs of these processes have resulted in both lost opportunity and lost shareholder value,” Pollard told shareholders.

“Throughout this period, a brand that has been built on some of the simplest joys in life has been mired in high profile corporate transactions of extreme complexity.”

Investors have cheered the company’s optimistic outlook, with Billabong shares up 4.25 cents, or 13.1 per cent, at 36.75 cents at 1530 AEDT.

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