Tossed On Stormy Financial Seas And Seeking A Leash, Billabong International Ltd. Eyes A Private-Equity Life Ring

The surfs of capitalism are a-froth down under, where action sporting goods developer Billabong in recent weeks has found itself courted by Mitt Romney’s Bain Capital and a rival private equity enterprise, TPG Capital, both of which eyed plans to acquire the ‘Bong, buff out its financial dents, slap on a new coat of paint and present a trimmer, more profitable extreme enterprise to the capital markets. Billabong, purveyor of the eponymous boardshorts supplier as well as tree-hugging-and-then-cutting-down skateboard maker Element and the glasses company Von Zippa, already has mapped out a path to enhanced earnings power but the investment mavens of the private equity world bring to the table their own ideas. Boil the Ocean has put its own venturing capital war-chest away in the attic in favor of more economically conservative armchair critiques of the contemporary scene, but nonetheless proffers a few strategic alternatives that Billabong’s management squad and its new partner may take under consideration in this heady season of risk-taking and risk-making.

Incentivize multiple disciplines among RVCA signess. The unpronouncable alternative sporting clothes unit already keeps one foot on the board and the other in the proverbial octagon of mixed ultimate fighting, a scenario that represents an elixir for investors thirsting after operational synergies. Thought leaders such as Jason Ellis already have paved the way for pro skateboarders to test their capacity for head injuries within the fighting pits of Las Vegas and elsewhere, and RVCA already counts within its skate ranks well-known aggressor types such as Kevin ‘Spanky’ Long, Josh Harmony and Nestor Judkins.

Set an aggressive hurdle rate for Mike V’s next contract with Element. Multiple stints with Powell and a record of high attrition among his own hardgood ventures virtually ensure that Mike V has another nature-future ahead of him at some point, plus he already got the tattoo. Vallely’s ceaseless grind, grassroots efforts to reach the kids and willingness to tackle new projects like pro wrestling have seen his board-selling abilities endure, but striking a deal that would require a certain number of pachyderm-printed decks, wheels and shoes to move before alotting incentive pay would be one way to maximize income before Mike Vallely roams on toward life’s next green pasture.

Sell more $46 t-shirts. New Billabong CEO Launa Inman last month identified a AUD40 million sales target for the Element, Da-Kine and RVCA brands. At the current conversion rate, you would only have to sell 909,091 such shirts to make up the difference, compared to about 2 million regular shirts at like $20, less than half the work.

Harness Element’s ‘back to nature’ vibe. “Just to give you a little bit of a sense, Element is very much a skate brand. It’s all about urban,” said CEO Inman, remarking to analysts on a conference call last month. “It’s a brand that has done well in America, we just need to refresh it.” This makes sense — the U.S. launched ebonics, rap music and the career of Keith Urban. However, it leaves another segment of the marketplace untapped: rural. The hinterlands match up well with Element’s rootsy ethos but there is also a smart business move to be made here, as there seem to be far less competitors. Google returns about 127,000 results for “urban lifestyle brand” compared to just 4,200 for “rural lifestyle brand.” There may also be opportunities for a smaller, more nimble retail competitor to entrenched big-boxers such as Fleet Farm, Farm & Fleet and Runnings’.

Avoid global financial crises when possible. Responding to a shareholder query in August, Billabong CFO Craig White acknowledged that the worldwide financial meltdown of 2008 may have set the parent company back some 10 years in terms of earnings, which had to be a bummer. Now the European sovereign debt crisis is afflicting Billabong’s wholesaling business in that region, all of it highlighting the import of extraplanetary diversification.

Summertime Mixtape #4: Kenny Hughes “Third Eye View”

“Work” is the low-hanging fruit of the Gangstarr catalogue for the purposes of video part soundtracks, or if you like, the unawares and poorly defended coastal town rich with grains and tradable goods to be pillaged. If “Work” came out in the Youtube age there would be a half-dozen edits soundtracked to it within a fortnight. It takes a more discerning mind to have predicted the tectonic shifts of industry trends and ‘outboard hype’ such that Kenny Hughes doing a melon grab above the coping on a mini ramp for an Emerica ad, my own personal first recollection of skating, would potentially be a realistic ad to see run in the current environment ad cycle some 15 years later. Kenny Hughes is here skating in sweated up T-shirts, 360 flipping across schoolyards and putting the pressure to crooked grinds generally. And, that nollie f/s heelflip. Kenny Hughes for better or for worse was an Element careerist, and you may be tempted to call the company’s bottom around the time of his exit. Does he get more respect or less for riding for Element as long as he did? I would argue, more.

11+1+11 +/- 11+11+11 =/≠ log sin cos

Ever since the skateboarding industry rebounded from its early-90s revenue nadir pros and companies alike have dreamed of releasing a video in November 2011, to reap the branding advantages of the 11/11 dateline that would occur only once in this thousand-year span. But several challenges arose. First several pros became drunk and forgot their plans. Later, California radio preacher Harold Camping predicted a rapture event occurring May 21, 2011, prompting several other parties to abandon their effort as sales were widely seen slackening after the end of the world. Then the Rev Harold Camping postponed his date further to October 21, 2011, and several more plans were waylaid. But that did not happen and now there are dueling video parts from Walker Ryan and Nyjah Huston, the only two with the sheer gumption to grasp hold of these powerful dates after so many others lost hope, and each laying claim to one of the all-ones dates that we are to see in our lifetimes, 11/1/11 vs 11/11/11.

True as it has been, there can only be “one” and the contest is rightly joined. Immediately Nyjah Huston rises to the level of advantagor because he has more letters in his name, and understood the ancient power of claiming runes. Nyjah Huston’s youthful mastery of alphabetics and numberology carries power over to him that allows him to jump down more stairs than the average person who is five or ten years older and several hundred six-packs heavier than he is. Nyjah Huston has chiseled these handrail tricks many times over in the walls of the Maloof caverns and soaked them for 50 days in some cauldron full of Monster Energy Drinks. His reward is to bathe in vats of gold pieces, gathering even more through the sale of an exclusive video clip on Itunes.

Walker Ryan was cursed with an over-functioning brain that burdened him from a young age, kidnapped by G-men and enslaved at a secret government facility known as “the Shop” where specially gifted individuals are studied. The curse drives Walker Ryan to spin rapidly in a switch backside direction, into frontside tailslides and bigspin flips. He has rejected society and bombs more hills than Nyjah Huston, creates a greater number of lines and more peculiar manuals like the switch wheelie switch backside flip, or the kickflip up onto the table at the new spot. This part is given away for free, signaling that Walker Ryan has rejected material objects.

The twin video sections clash because either one could be the same title of a terrible Kanye West CD, with the edge going to Walker Ryan because it actually was. The two clash at Rincon, with Nyjah Huston risking more limbs by kickflip backside lipsliding on the railing. Nyjah Huston’s backside flip nosegrind edges the one done by Walker Ryan, but Walker Ryan battles back since he never cried after losing an expensive contest on TV.

But in the ultimate end Nyjah Huston turns in an aggressive last couple of tricks (if that sequence wasn’t pieced together), but even still Walker Ryan turns in a lesser-hyped volume that applies a greater tax to the mind and has not already been ladled out over a thousand and one street courses, thereby decapitating Nyjah Huston in the great battle to release video footage on either November 1 or November 11 of this month. Each man’s thoughts and dreams are now his to know.

Is Nyjah Huston’s Element Victory Lap The “New Coke” Of Sponsorship Arrangements?

The above pic of a shirtless LL Cool J functions as a multi-purpose vehicle, in that it’s aimed to increase this blog-spot’s marketshare among female consumers of sk8 commentary [via content-farming] while also calling into question the much-ballyhooed (by Transworld this month) comeback of Nyjah Huston, 16-year-old Element prodigy turned hardgood entrepreneur turned Element prodigy. According to an exclusive interview given to the periodical, Nyjah’s two years in the skate industry wilderness nearly cost him everything, from sponsors to the coveted Maloof’s Money Cup, and his personal journey of becoming an older and wiser teen as a result begs the question of which other professions or pursuits involve making career comebacks at age 16 — those weird “Lil Miss” pageants? Gelding racehorses? Gymnastics?

Nyjah Huston’s skating doesn’t do a whole lot for me on a personal level (although much credit due for caballerialing onto the rail the hard way). Yet the TWS interview offers much to chew over. The Maloof powers that be preferred to hand the cash to a skater like Chris Cole who is backed by major corporate sponsors instead of a grassroots effort like Huston’s I&I although he retained the support of his loyal fans on the face book and even Element, who waited patiently and eagerly for him to return to the fold from the day he departed. He intends to shift his focus to technical skating as he enters the autumn years of his late 20s and is wary of becoming “lost in the core” if he strays too far from the spotlight of mainstream competitions and sponsorships. Manny Santiago is off the hook and he is more motivated than ever to expand his career.

It is possible this the drama of the recent years is part of a broader plan for Nyjah Huston. This entry on Yahoo! Answers! suggests that under a pseudonym he began planning his “comeback” as long as three years ago, even before he departed Element at the urging of his dad and launched what is described as a one-man operation in I&I skateboards, which found the then-ninth grader struggling to set up a profitable distribution model while simultaneously arranging demos and originating positively themed board graphics. Which leads us to ponder whether striking out on his own was a preemptive move to build anticipation for an ultimate comeback to Element and generate board sales revenue in the seasonally weak first quarter financial cycle, similar to the conspiracy theories that for years have dogged the introduction and eventual burial of the beloved “New Coke” recipe for all-time. Will Nyjah Huston’s market value, like that of Coca Cola Co., rise 2200% in the future and prompt an investment from the Oracle of Omaha?

Block Movement

Recalling a time when world records were giggled at

Element’s newest towheaded amateur Nick Garcia doesn’t exactly stand out from the current generation of ditch-skating ATV types, but there’s a couple things worth checking in this welcome-to-the-team video: namely the opening manual, the half-cab frontside nosegrind and the backside 180 magic-feet maneuver that takes a few rewinds to fully sink in. As far as that manual goes, at a quarter of the video’s runtime it’s probably one for the record books, up there with Hufnagel’s SF city block in “Roll Forever” and Vallely in that one older video I’m having trouble remembering right now. In terms of sheer distance, though, I think the one at the end of “Come Together” still takes the cake, right?

Mike Vallely Films the First ‘Battle Commander’ Part I Watch More Than Once

File under: skateboard tricks

When the untamed New Jerseyan, slam poet and personal brand that is Mike Vallely parked his black novelty sportscar outside the Berrics’ hallowed walls, we should have known something was up. Inviting the streetplanting hockey blogger to a technical flip-trick contest for which he was ill-suited was silly enough, and while Vallely kept a lid on his famously flaring temper throughout what looked like a pretty lighthearted affair, it stands to reason that he/his people wanted a little sugar to go with the tough flatground medicine that Chris Cole was dishing out. And so it swung onto the interwebs this weekend, the Mike Vallely “Battle Commander” section, crushing preconceived notions of skateboarding and reality itself. Sort of exactly like the iconic monster truck scene from “Road House.”

These little parts have been used by marquee pros to tease “legit” video parts and test-drive new tricks, but for me at least they’re generally snoozers, seeings’ how it is a part filmed entirely in one skatepark (dramatic light notwithstanding). For Vallely though this is kind of the ultimate environment. It’s a park for one, and the dude has filmed entire documentaries and TV miniseries in parks. Their legal nature provides him plenty of tries for the type of big jumps that get the kids on their feet, and the Berrics’ malleable format gives Vallely’s inner elephant plenty of room to swing its tattooed trunk and plant its broad feet here and there, as the whims of Vallely dictate. At one point they even show him drilling down a board that I thought was going to facilitate an even more huger boneless, but in a typical Mike V twist, he uses it for a drop-in (!) and leaves me confounded once more.

There are all types of amazing tricks in this part though, set off with that somersault/cartwheel into the Chris Cole-approved streetplant transfer thing. Vallely shits upon naysayers, breaking out his legendary no-handed 360 flip along with a couple other flip tricks that incorporate grabs and/or walking up a hubba ledge. Proving that he pays more attention to “new school” skating than he likes to let on, he throws in an up-the-stairs move, along with an up-rail trick with a launch-ramp assist, an obvious reference to “Storm”-era T-bone. Also he wears a vest.

Mike Vallely has been many things to many people. For instance he was once a vegetarian, a lifestyle he left behind in order to chew scenery in the Paul Blart movie.* He’s been called more politician than skateboarder, but what I think Mike V is, is a showman. And he figured out a while ago that he tends to perform best in controlled environments, with the possible exception of Warp Tours, where it seems like just about anything goes. Revolution Mutha music included, this really was the most entertaining Berrics segment I’ve watched in a long time. A few tricks over that hot rod and two solid minutes of purposeful pushing and it would’ve been easily the best part Mike V has filmed in the last 20 years I bet.

*oh, we went there

I Sort Of Want To Believe

Caught you lookin for the same thing

I’m not sure what to make of Hype!, which is by all appearances a Popwar retread complete with mass-culture motif, sub-Street Corner graphics (excluding the hover board, and that’s probably already been done by somebody at some point) and an even more muddled mission statement:

AN ESSENTIAL PART OF THE “BEING” SURVIVES DEATH TO BE REBORN IN A NEW BODY,
HYPE! IS THE SAME AS IT NEVER WAS…
ACCORDING TO CERTAIN BELIEF SYSTEMS, A NEW “PERSONALITY” IS DEVELOPED
DURING EACH LIFE IN THE PHYSICAL WORLD,
BUT SOME PART OF THE SELF REMAINS CONSTANT THROUGHOUT THE SUCCESSIVE LIVES.

Word.

But, rather than dwell on their migraine Magic Eye website, Hype has my full support when it comes to their slowly filling handful of team riders. One is Element amateur scorned Mike Barker, a tousle-headed Popwar refugee himself who turned in one of the better parts in the not-nearly-so-bad-as-its-name “This Is My Element” video a couple years ago and apparently was shown the door for his trouble.

Back to throw the dice with another startup after his corporate sponsorship adventure, Barker joins the consistently underrated wandering Texan Jeremy Holmes, the whole point of this posting being his little clip of footage put up on the Hype site a week or so back. The nollie b/s 180 switch b/s 5-0 shove-it trips me out in this clip because of how fast the shove-it is, just about Satva Leung switch frontside flip in “Welcome to Hell” fast:

Supposedly Hype also provides boards to Tyler Price of Toebock fame, possessor of the last part in “Don’t Act Famous” which I ought to address one of these days. He’s really good and all, but I have kind of a hard time getting real excited about his skating. For whatever reason. He reminds me a little bit of another Element-For-Lifer, Colt Cannon, whose name has also been mentioned in the same sentences as Hype, but honestly I don’t know anything about that. If they keep coughing up the Holmes footage I guess I won’t ask any questions.

Mall Justice No Match For Mike Vallely

“Somewhat integral”

Mike v is a man of contrasts. There are those who would call him a hypocrite. I view him as a beardly figure brimming with nuance and harsh truths about the human condition. Also, bonelesses. Truly he is a man of our times, but as it ever was, the measure of a man is made not in X-Games or even the wrestling ring, but rather in that penultimate court of American accomplishment, the box office.

Last weekend, you see, Mike V met and introduced himself to the U.S. public, or at least those unlucky few who haven’t seen his Fuel TV series or his numerous biographical documentaries or his poems. As one of the chief villains in the new retail-themed thriller “Mall Cop,” our Vallely is garnering passing mentions, if not rave reviews, in the national press. To wit:

Finally there’s champion skateboarder and musician (in the band Revolution Mother) Mike Vallely, who plays the criminal ringleader, Rudolph.

“They had to find the most bad-ass skateboarders on the planet,” says Vallely, a voracious reader and father of two who wears his blond hair long and scraggly. “I was at the top of that list.”

Vallely has the biggest action sequence of the bunch, battling James throughout the mall. In what he describes as an undoubtedly riveting climax, Rudolph will leap from floor to floor as he chases Paul Blart. Then, in a never-before-done skating move, he’ll jump on – and break into – a moving elevator.

“It’s a whole new challenge,” Vallely says. “I’m not just skateboarding. I play a character that is somewhat integral. This is the first time I feel, as athletes, we’ve really been taken in.”

Somebody’s been taken in for sure, as the Blart-star vehicle hoisted an estimated $40 million over the three-day weekend, putting it in the number one box-office spot.

But the tidings of Vallely’s Hollywood success is of course no news to those of us in the skateboarding sphere, who gladly cheer the multifaceted Mike V as he flexes his pecs in the squared circle, gets his nose cracked open on the hockey rink, recites verses at the poetry slam, snarls through his beard at the Warp Tour, or pushes over and over and over in that Black Label video. Cuz it’s not the destinaton. It’s the journey.

“I just had water, anger and a destination. It’s just how I am,” Vallely says.

Equally transfixing are Vallely’s intellectual travels, transitioning through vegetarianism, straight-edgeism, and non-violence over the years. (Yes, non-violence.) He hews closely to the punk purism of local scenes and staying true to skating’s roots, whatever those may be, while fervently embracing mega-corporate sponsors. He remains fiercely loyal to his sponsors of the moment and wastes no time in spewing poison upon those who dare to cross him.

To this end there’s actually a really good interview in the new Transworld (2-09) where Mackenzie Eisenhour kind of gets Mike V to admit he wants to have his beating-people-up cake and eat it too.

TWS: You repudiated violence after the “Greatest Hits” DVD. (re: fighting “Creature Lee” at Van’s Downtown Showdown last year)
MV: In a broader sense, I have spoken out of both sides of my mouth…. “Greatest Hits” was definitely the capitalist pig in me [laughs]. After the craze of “CKY” and “Jackass”, I saw an opportunity in the marketplace to package that stuff and that’s something I can understand someone disagreeing with.

There’s a lot more, it’s a pretty good interview in terms of putting the harder questions to Vallely as far as his perceived jock nature, whether he ever considers learning new tricks, how he’d be a great cop and that hoary old cliche “skateboarding saved my life.” Also there are two photos of bonelesses.

Christ Air

The only way to fly

Australians love to party, and who can blame them? Their scenic island nation is surrounded by lovely beaches and reefs, crocodiles and concrete skateparks are abundant, and the land was immortalized by 80s hit machine Men At Work (later covered by Sheckler favorites MGMT).

But, as Rupert Murdoch has made clear, there’s always one guy who’s gotta take things too far. Behold the sobering tale of a homebound Aussie and his ignoble choice of coke mule:

A 33-YEAR-old Victorian man faces up to 25 years in jail after cocaine was found hidden inside two skateboards at Sydney Airport.

The man was stopped by Customs officers yesterday after arriving on a flight from Auckland, Customs and Australian Federal Police (AFP) said in a joint statement.

Get it? Joint statement? Anyway.

Customs officers became suspicious that drugs were hidden inside two skateboard decks and an X-ray revealed an image consistent with a possible drug concealment.

Now when I read this I immediately thought to myself, how exactly might one go about hiding a bunch of blow in a board? And it came to me. The Element Push/Helium constructions! Obviously this Down Under Rick Ross had read his TWS Buyer’s Guide.*

If you think about it, this sort of makes sense. We’re nearly a decade on from one of Muska’s more nefarious contributions to the skateboard style canon – the weed stash pocket – and as the stair sets get bigger and the rails longer and the mega-ramps span more and more famous landmarks, it’s natural for someone to come along and up the stakes. Hence the coke smuggling board from Element. Shit, check out the Helium construction logo. No business like snow business.

Curiosity got the better of me and I pulled up this handy cocaine street value calculator, because that’s the beauty of the internet right there, and if the estimate is correct, this dude fit like $75 grand worth of blow in each board. “$75 grand per board… I don’t care how many Dew Tours you win… you got to win forever to make that kinda loot.”

No doubt. You have to wonder how deep this goes. Is Tosh Townend’s new deal over at Pocket Pistol skates a new distribution venue, or a pit stop on the way to a Colombian necktie? Does Element operate an extensive and shadowy Latin American “flow team?” Does this all somehow explain Mike Vallely’s seemingly constant aggression? Are the, ahem, Helium deck exports keeping Element afloat through this difficult economic period? Too many questions, and too many bad puns. I’m quitting while I’m ahead…

*It’s worth revisiting Cairo’s comments on deck technology: “I’m totally not backing anything with a missing ply inside. I’m not going to name names.” Possible endorsement of the stop snitching campaign?

Heard On the Street

Listen up

Sad news from Listen today:

First of all thanks to everyone who has supported us for the past 4 years. Due to the unforeseen economic downfall and obstacles beyond our control, we have collectively decided to take these next two months to restructure our company financially and operationally in order to bring you a new and improved Listen skateboards and Listenskateboards.com, in January 2009.

Man. First of all, let’s hope that’s two months in calendar time and not “Fulfill the Dream: Coming Soon” time. Either way, hopefully these dudes can hold it together, because right now skateboarding could do with more Listens and less multinational conglomerate hard/softgood concerns.

Speaking of, those guys aren’t doing so hot either…

Foot Locker Inc.

Citigroup Global Markets analyst Kate McShane describes shares in the new owner of CCS as “beaten down” and ripe for buying after FL lost 30% of its value over the past month. It hurts, like a shinner or seeing the words “Core Shop Exclusive!!” in a $102 million mail-order company’s catalog. McShane telegraphs what may be positive news for Es, however: “Over the longer term, we think Foot Locker is well positioned to capitalize on a healthier consumer & a technical athletic footwear trend.”

Globe International Ltd.

Globe caught a tough one last month when they closed out fiscal 2007/2008 with a $24.6 million net loss, but they’re keeping an Australian stiff upper lip judging from their annual report, which looks more like a booking catalog and is probably the only shareholder document to feature beardmaster Chris Haslam gooning it up in a Slayer shirt. Do you think he gets photo incentive for that?

Also, important facts to bear in mind when considering GLB.AX: Major competitors would be other apparel-related businesses providing the same services to the general public through its shops or on-line. Customers are the general public who are fashion conscious.

Billabong International Ltd.

Australia-based surf clothier and owner of Element finds itself pitched on the fickle waves of teen consumerism, and while Billabong hasn’t been hit as hard as some of the other guys, one of their top executives last month unloaded a quarter-million shares just prior to the credit crisis kicking into high gear. It’s never really a good look when one of your top dogs trims his personal stake in the company, but by selling when he did our boy avoided losing $500,000 or so, which speaks to brains of a sort at the helm.

Quiksilver Inc.

ZQK has had a tough run of things, trading this week to a one-year low as debt balloons and investors flee the DC parent like so many Lakai riders. The plunging chart pretty much tells the tale, but why not give the last word to messageboard advice-dispenser “giveitup4muffinz”… “ZQK DEBT NOW = 150% OF MARKET CAP this turd is sinking fast!!! this company is f*cked!!! do not invest in this company. you’ll be broke. it’s going under!! no future for ZQK.