Posts Tagged ‘equity private’

The Incredible Shrinking Alien Workshop

February 23, 2014

thanks_ohio

Singular as it was to see the Dill/AVE ‘Dear John’ letter pop up on AWS’s site last spring, it is wild to look upon the ‘Team’ page in recent weeks and count just four working professionals and two amateurs, half the year-ago number, and relegating 30-years-young 2006 Sect inductee Omar Salazar to de-facto elder statesman status. Setting aside Heath Kirchart’s retired jersey and the mercurial standing of Rob Dyrdek the absentee landlord, if you were to trim now-departed ridership from the ‘Cinematographer’ section (and keep the between-clip clips) you’d get about a three-minute vignette; just three parts from ‘Mind Field’ would survive.

The narrative seems to go like this: aging bones and the lack of any equity stake in the company that employed them for some 15 years, Van Engelen and Dill dipped after seeing the title to DNA’s corporate UFO change hands multiple times in recent years, in the most recent case supposedly finding out only after the fact that Dyrdek had abruptly flipped the company to sunglass investor and Street League licensor Pacific Vector Holdings. (‘Despicable Me’ teaches us that a vector possesses direction and magnitude, while Pacific refers to the ocean that abuts California.) Sans these sometime-roomies and industry spirit-guides, Ohio-rooted bean-planter Kevin Terpening quietly exited, followed by the long-anticipated departure of Mikey Taylor, Grant Taylor’s seemingly preordained leap to Anti-Hero and most recently that of onetime franchise fakie 360-flipper and recent DKNY booster Dylan Rieder*.

The slow ebb of branded professional talent from the AWS roster over the past three quarters probably does not rise to the level of the World Industries ship-jumping of the mid-1990s or the nearly absolute Toy Machine team abscondiment that left Ed Templeton and Austin Stephens to rebuild by themselves the house of the Transmissionator. The steady grabbing of coats leaves open the question though as to whether the exodus has yet run its course. The curb-carving hair-greaser known to fans as Donovon Piscopo is seen to remain close with the DAVE contingent; hardly a fortnight can pass without wallride impresario Jake Johnson being instagrammed in close proximity to Polar hardgoods and he has really started to do a lot of no-complies these past 18 months.

Are the quartet of Jake Johnson, Omar Salazar, a recently reinvigorated and spectacleless Tyler Bledsoe, and Gilbert Crockett — who for one has voiced on the record his commitment to remaining aboard the grand Alien trip — strong enough to sustain and refresh this hallowed and murky well of Midwestern weirdness? Did recent “collaborations” with the estates of Warhol and Haring* signal a grasping at creative straws for a company with one of the strongest track records of art still going? To what extent are DNA’s new owners vexed by the exits, versus what their financial models may have divined prior to agreeing the purchase? Will the excellently disjointed TOUROHIO clip from late last year come to be seen as bridge or a bookend? Are the personnel moves to be interpreted as some right-sizing of DNA’s pro-level staffing, given Josh Kalis’ recent comments to the effect that even the MTV-moneyed boardroom chessboxer Dyrdek struggled to keep the company financially viable?

*Noting the Dill and Ave note, as the industry becomes increasingly press-release driven it seems more and more strange when companies keep silent on the departure of marquee names, especially those of years-long riders, instead quietly deleting them from their websites and re-screening their boards.
**does the world need a Radiohead album of Beatles covers?

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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.