Surfstitch has sold off Surf Hardware International to a subsidiary of investment company, Gowing Bros, after the brand was deemed “not a strategic fit.”

The reported fee paid for the brand is $17 million, with the decision taken to divest of the brand enabling “the group to focus on management’s attention and financial resources on its core business, e-commerce retailing.”

“The sale is another step in the group’s renewal process,” said Surfstitch chairman, Sam Weiss.

“Whilst SHI is a sound business, operated by a passionate team with an outstanding knowledge of their category, it is appropriate to free up funds that are better utilised in our e-commerce businesses.”

Surfstitch chief executive Mike Sonand said that, while SHI was profitable, it was not a strategic fit and the sale is a good outcome for the company.

“Over recent months we have undergone a robust sale process, handled by Deloitte Corporate Finance, and after discussions with many local and global potential buyers, we have now finalised a deal with Gowing Bros Limited which provides the best outcome for shareholders,” he said.

SurfStitch’s FY17 outlook of an underlying EBITDA loss of $2m to $3m, included SHI’s forecast earnings of approximately $2.2m for the seven months ended June 2017.

As a direct result of the sale of SHI, the company’s underlying EBITDA for FY2017 is now expected to be an underlying EBITDA loss of $4m to $5m excluding any impairment charge arising from this transaction.

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