Billabong’s rollercoaster ride is far from over. The apparel company has flagged it will lop off underperforming brands and focus on those that work.
New Billabong chief executive Neil Fiske addressed the Billabong AGM yesterday on the Gold Coast clad in surf-wear, The Australian reports, to deliver the company’s strategy to shareholders.
“I am convinced it will become cool again among 18 to 24-year-olds,” Fiske said.
A three-pronged approach unveiled yesterday will focus on three brands, Billabong, Element and RVCA. The company’s suite of other brands will be divided into growth opportunities and those to be offloaded.
The strategy is expected to cut more than a quarter of the company’s products with final plans expected over the next month-and-a-half. The shopping experience overseas will be whittled down to mono-brand retail stores, The Australian reports, and single-brand online shops.
In August the company posted an $859.5 million loss, which was followed by Fiske’s appointment in September. His appointment was related to a refinancing deal worth around $586 million from US investment firms Centerbridge Partners and Oaktree Capital Management.
The company’s share price tumbled to $0.23 in June, falling 49.45%, after takeover talks failed to reach a deal between Billabong, Sycamore Partners, and a consortium of Altamont Capital and VF Corporation.
Former chief executive Launa Inmam was in charge for a brief time, after 20 years of management by Derek O’Neill.
Retail Doctor Group chief executive Brian Walker told SmartCompany this morning the brand would still be “relevant” in five years, but the company had no choice but to make cuts and focus on its core.
“This surf merchandise has become the domain of discount department stores,” he says. “To become cool again with Billabong will be a challenge in my view.”
The road to coolness requires a shake-up in marketing strategy, Walker says.
“They’re going to have to get back to the basics of what made them popular – very cool, contemporary surf merchandise – and they’re going to need to do it in a way they have never had to do it before, which is all omni-channel retailing, viral marketing. It’s a generational change they’re facing.”
He says while the Billabong brand still has “good cachet” the board should allow the executive to pursue the strategy without impediment.
“I don’t think there’s unity in the camp,” he says.
Billabong, coolness, marketing, retail.