Billabong posts $777m loss, brand value drops to zero
Distressed Australian surfwear retailer Billabong International- which is currently negotiating a A$325 million ($290 million) refinancing deal with a consortium led by Altamont Capital Partners - has booked a net loss of A$860 million, while cutting the value of its namesake brand to zero.
According the company's full-year results disclosed yesterday, global sales revenue dropped 13.5% year-on-year to A$1.34 billion, while the company's flagship American operations saw revenue slide 5.7% to A$636.7 million. Meanwhile, the value of the Billabong brand itself was written down from A$252.1 million to zero.
Plans for the company's restructuring include shedding its Canadian retail chain West 49 selling US accessories brand Nixon, closing 158 underperforming stores and reducing its suppllers by over 75%.
"Liquidity has been secured and we are within weeks of finalizing our long term funding arrangements," said Dr. Ian Pollard, chairman of Billabong, in a statement. "Our shareholders, our staff and our various business partners can be confident that we have a strong future following the most challenging period in the company's history."
The news comes as US firms Centerbridge Partners and Oaktree Capital Management vie with the Altamont-led consortium - which includes The Blackstone Group's credit arm GSO Capital Partners - to provide long-term financing and become the leading shareholder in the company.
Last week Oaktree and Centerbridge together made a fresh recapitalization offer of A$325 million to compete with a revised proposal put forward by the Altamont earlier in the week.
The consortium was forced to revise its offer after a complaint from Oaktree and Centerbridge - which own around A$300 million of Billabong's debt - prompted Australia's Takeovers Panel to deem the terms of the Altamont package as unacceptable.
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