Posts Tagged ‘Billabong’

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

September 24, 2012

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.

Mike V Takes The Biggest Risk Of His Career By Launching A Company With A Three-Word Name

July 13, 2010

Mike Vallely is nothing if not a man of law. You support him, he supports you. You show up at one of his one-man middle America prefab skatepark demos, you get to see at least one brawny mute grab. You drunkenly wrest a hockey pole from the fingers of his daughter, and you may endure a televised pummeling that could ultimately cost Mike Vallely a coveted hockey blogging gig but not the dignity of his family.

So it is then that Mike V, as he is known, once again cashes in his deck sponsorship chips to go it alone again with the third (fourth? [shit, fifth?]) hardgoods concern, after several years of diligent brand building under the Element/Billabong parasol. He extends his latest business venture into risky territory though by choosing not a mononymous nym like “Transit” or “Vallely” or even “TV” but instead taking a gamble with the powerful yet weighty name brand “By The Sword.”

It makes sense because the tri-nommed brand hints at the powerful violence with which Vallely has long been associated. Yet also it suggests he is coming to terms with his own mortality, perhaps after shearing his locks, similar to the biblical story of Samson or Britney Spears. Vallely represents a figure of controversies and contradictions, but he remains emboldened by his do-it-yourself approach, signaled with his hiring of Jason Filipow to do the artwork for the skateboards.

But even bearing a personal brand as established and cultivated as Vallely’s, it’s hard to overstate the danger of employing more than one word in the name of your company. The ditches are littered with the delaminated corpses of those who tried and failed: Sixty-Forty, City Stars, Tree Fort, Channel One, Gordon & Smith, Santa Monica Airlines. Zoo York and Alien Workshop got bought. Birdhouse Projects moved to the singular burbs, Powell dropped the Peralta and World Industries has all but collapsed under its own weight. Even the venerable Black Label was flirting with the singular “Label” for a while, when the subprime mortgage crisis was peaking.

Can Vallely buck the trend? This is a question that must be and will be answered with time and the developing battle for market share he faces against JR’s Rand Paul-influenced venture, which has the benefit of a one-word name and a music career that may not be as long-lived as Vallely’s, but has certainly captured more blog attention, a priceless commodity in the 24-hour blog buzz cycle. He also is challenging this site in the realm of search engine optimization, a tall order against mounted men bearing halberds.

Why Birdhouse Desperately Needs Nyjah Huston

December 8, 2008


Not to put too fine a point on it

In news that may be a ghost of bummers yet to come for Element’s current patchouli-scented incarnation, Mike V’s favorite Billabong subsidiary announced this weekend that 14-year-old Jah aficionado Nyjah Huston has either died, or else no longer shares the widely held “Element For Life” view, for reasons of his own. Those reasons could very well be tied to the American dollar; despite current weakness in Australian’s version of the greenback (a good thing), Element’s pater familias continues to grapple with the same bear that’s biting into Pacific Sunwear sales and claiming warehouse jobs.

All of this, or none of this, may have to do with Nyjah being out of his element (heh) and entertaining offers. And ignoring the very possibly totally for sure logic that he will end up at Plan B, due to existing Syndrome ties through Silver and FKD as well as Danny and Colin’s ongoing crusade to lock up superhero talent, checkbook be damned… I would like to make the unsolicited argument as to why Tony Hawk seriously needs to step in and put Nyjah Huston on Birdhouse.

1. Tony Hawk understands the child star
Hated on for much of the 80s, Tony Hawk possibly understands what Ryan Sheckler is dealing with right now, beloved by the secular world and despised by people who, you know, actually skateboard. Nyjah Huston, being five years younger and about 50 times more talented than Ryan Sheckler, is a kid Hawk could (heh heh) take under his wing and (fuck it) teach to soar in both the real skateboard world and whatever market exists outside of it when the recessionary dust settles.

2. The Shaun White experiment has failed
Half the kids who skateboard don’t know who the Flying Tomato is, the other half think he’s a retard, nobody considers him a for real pro skateboarder and the leopard-print tights aren’t helping anybody. Birdhouse long ago cast its lot with the cartoon graphic-fixated tween demographic, and with Tony Hawk in the announcer booth instead of the winner’s podium at the X-Games or Gravity Games or whatever, the company needs fresh star power to move those re-screened Brian Sumner decks.

3. Revenge
Self-explanatory. Scooping up Element’s treasured prodigy would slake the Birdman’s thirst for vengeance after Element appropriated his own protege, race car driver and projectile pooper Bucky Lasek.

4. Birdhouse has the money
Or maybe they don’t, but while pro paychecks get delayed at your favorite deck purveyor, Tony Hawk likely continues to sleep upon a sizable pile of cash with any number of beautiful women. Since bringing Birdhouse under the illustrious Tony Hawk Inc. power umbrella, the proprietor has stated that “increased oversight and involvement” in the team will be his highest priority. This would give him the opportunity to put his money where his mouth is bills where his bill is.*

5. Birdhouse needs a power move
Putting Nyjah Huston on would remind people that A. Birdhouse exists, B. they give a shit and C. that they want a seat at the table as far as high-profile team maneuverings (no disrespect to Nesser, Ploesser, Willy Santos et al). It would also suggest that the company has some sort of longterm plan for the future aside from Riley Hawk and selling repro’d Hawk graphics, which, if you read Sean Eaton’s interview in TSM recently, doesn’t seem especially certain.

TSM: You look at Birdhouse as a big mistake?
SE: I personally do, yeah.

Was it disheartening to see Tom Green and Shaun White go pro before you?
Dude, that’s exactly what I’m talking about.

Now, bear in mind that this whole posting carries the major disclaimer of relying upon my own questionable judgment and intelligence, as I prepare to fully fail Nate Sherwood’s “skate IQ” test. Stay tuned as I report back the assuredly depressing results.

*That was awesome

Heard On the Street

October 24, 2008


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.