Surfwear retailer, SurfStitch, expects its pro-forma EBITDA for FY2016 to be a loss, somewhere between $17.3 million to $18.3 million.
It’s the second time the online retailer has slashed its earnings guidance in as many months. The company originally forecast full-year earnings before interest, tax, depreciation and amortisation of at least $15 million but revised that down to $2 million last month.
While trading conditions are unchanged, revenue is expected to be $20.3 million less than originally forecast due to an issue with a licensing deal, the company said in an announcement to the market today.
SurfStitch expects to return to profitability and be cash-flow positive during FY2017.
Appointment of new CEO
SurfStitch has appointed Mike Sonand as group CEO with immediate effect. Sonand joined the company in May 2016 as COO and was previously the COO of the Charles Parsons Group and CEO of M Webster Holdings and Globe International.
Current joint CEOs, Lex Pedersen and Justin Stone, who stepped into the role after the surprise resignation of Justin Cameron, will assume new positions with Pedersen named director – business development and Stone, director – global support.
SurfStitch chairman, Howard McDonald, said in his first month in the role Sonand had already made a significant contribution.
“Mike has already had a very positive impact on the leadership team and has spent a considerable amount of time visiting all the businesses in the group. He has already demonstrated a firm grasp of the company’s immediate priorities and growth initiatives. Justin and Lex, who are both very supportive of the appointment, will now focus on delivering outcomes in their new roles,” McDonald said.
Sonand has had an extensive career in the retail sector both in Australia and internationally. In 2010 as CEO of M Webster Holdings, a vertical fashion retailer with the David Lawrence, Marcs and Jigsaw brands. Also on his resume are roles with Pacific Brands, Just Jeans Group and Myer.
“I am very excited to be given the opportunity to lead the Surfstitch Group, a highly innovative business with an engaged and talented team,” Sonand said. “There are both major opportunities and challenges and one of my first priorities is to establish an operating and management framework, which Lex’s and Justin’s new positions are a part of, that I believe will restore the business to a position of strength. I am fully focused on rebuilding value for shareholders.”
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