If a surfer says, "Dude, pass me my Billabong," relax, he's just asking for his T-shirt. Billabong International makes surf and extreme sports (skateboarding and snowboarding) apparel and accessories. Its brands include namesake Billabong, as well as Element, Von Zipper, Nixon, Two Seasons, Sector 9, RVCA, and DaKine. Products sporting its wave logo include board shorts, swimwear, T-shirts, jackets, backpacks, watches, and footwear. Board riders and wannabes can buy the firm's gear at specialty sport stores and at Billabong stores in more than 100 countries. Director Gordon Merchant founded Billabong in 1973. In 2013 V.F. Corporation offered to acquire Billabong to boost its outdoor and action sports business.
Drops in consumer spending in Europe and Australia has helped Billabong load up on debt. As the company worked to sell off assets, cut jobs, and close stores to lighten the load, the apparel maker and retailer has been approached with takeover offers. TPG Capital, based in Texas, offered to buy out Billabong in a deal valued at A$765 million ($823 million). Private equity firm Trilantic Capital Partners also sought to acquire a 48.5% stake in the company's Nixon accessories unit, leaving Billabong with an equal share of 48.5% and Nixon founders and management with the remaining 3%. All previous deals have fallen through. V.F. Corporation's early 2013 bid with investment firm Altamont Capital Partners is valued at A$526.8 million ($556 million) and represents the latest deal on Billabong's table.
Mergers and Acquisitions
The company has largely grown its operations through acquisitions. One of Billabong's strategies is to acquire companies that boast strong brand names. It then maintains them, rather than folding them into its operations, and leverages their strengths. An example of this is Billabong's 2010 acquisition of West 49, a leading action-sports retailer in Canada. The C$83.2 million (about US$73 million) all-cash deal added West 49's roughly 140 mall-based retail outlets to Billabong's operations, strengthening its footprint in North America. West 49's key management team, including founder and CEO Sam Baio, was retained. Also that year, Billabong acquired RVCA, a skate- and surf-inspired apparel brand based in California, as well as the Surf Dive 'n' Ski and Jetty Surf retail assets in Australia from General Pants Group. This deal follows several purchases in 2008. Sector 9 is a US skateboard firm that Billabong bought for its longboards and unique product offering. Billabong also acquired established DaKine Hawaii, maker of snow, bicycle, and surf accessories, to beef up its boardsports group.
While it doesn't consider itself to be a brick-and-mortar retailer, the surfwear company has been looking to extend its reach into retailing by acquiring small chains of sports stores and those who peddle their products online and through catalogs. To give its business a boost in the online marketplace, Billabong acquired Swell.com, a California-based retailer of boardsports apparel and gear. The deal has extended Billabong's brands to Swell's established e-commerce site and catalog. The company also purchased 15-store chain Two Seasons, based in the UK.
The company sells its products in the US, Australia, Brazil, Europe, Japan, and New Zealand. Billabong generates about half of its revenue in the Americas.
Sales and Marketing
To effectively target its primary audience, it sponsors surfers, skaters, and pro surfing tournaments in Australia, South Africa, and Spain. – less