Billabong refuses new offers

Incoming Billabong CEO Scott Olivet’s hope of leaving the surfwear group’s troubled financial history behind and focus on restoring sales has been spoiled by a new bid for the company by rival hedge funds.Resource-4

Olivet fronted media in Sydney on Thursday afternoon after having flown into Australia on Wednesday to speak with staff.

Billabong announced on Tuesday night that it had restructured its debts with US private equity group Altamont Capital Partners and that Olivet would replace Launa Inman as CEO.

After a whirlwind 36 hours, Olivet said he would not be able to offer a detailed five year turnaround plan but said he had told staff he wanted to change the focus of attention on Billabong.

“This has been a balance sheet story for too long – it’s time to turn this back to a brand transformation and a brand strength story.”

That hope was dashed as hedge funds Centerbridge Partners and Oaktree Capital Management lodged a new, unconditional offer on Thursday.

Billabong chairman Ian Pollard said there was only one executable proposal before the board at the time the decision was taken on Tuesday.

After reviewing the proposal from Centerbridge and Oaktree, Billabong said late on Thursday that it would not be accepted.

The proposal contains several conditions that cannot be satisfied, Billabong said.

Meanwhile, Olivet, a former boss of the global Oakley sunglasses company, said there was scope to cut costs in Billabong as part of a reorganisation.

He said most opportunity existed in cutting supply chain costs and said the cuts would “not necessarily” involve job cuts.

Billabong has already closed stores as part of its restructure.

“I believe there are still some stores that need to work their way through and then after that we’ll evaluate,” Olivet said.

“I don’t know the number off the top of my head on how many remain to be closed but at the same time we’re opening stores in other locations in other parts of the world.”

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