Although Australian clothing retailer Billabong just wrapped a successful WCT event in Tahiti, the company continues to struggle financially in a downward trend as the company reported its financial results for the 12 months ended June 30. Billabong International incurred a net loss of AUD $275.6 million.
News of Billabong’s sliding profit broke after a tough year for the company, which saw the sale of accessories giant Nixon Inc. earlier this year for $285 million in net proceeds, which was used to help pay the company’s debt. Though the company remains hopeful with its recent turnaround strategies, it also faces a possible takeover from Texas-based private equity firm TPG Capital LP. Billabong previously rejected two offers from TPG earlier this year, the firm offered yet another bid in July at $713.7.
To alleviate these problems, Billabong unveiled a strategic turnaround strategy today. The company released a four-year “Transformation Strategy” which includes closing stores, cutting product lines, expanding its online business presence and globalizing its supply chain.
CEO Laura Inman reassured Billabong’s position in the industry commenting, “At an underlying trade level, the Group remains profitable. As previously flagged to the market, various significant and exceptional items have adversely impacted the Group’s results. In recording the various significant and exceptional costs and charges, the Group has endeavored to adopt a conservative position. The Group is well on track in implementing the initiatives outlined in the previously announced Strategic Capital Structure Review and will continue to implement a number of new strategic initiatives announced today as part of Billabong’s Transformation Strategy. These initiatives will target both cost savings and revenue growth.”
On the heels of reporting its $275M loss and revitalization strategy, the company announced its appointment of former Target colleague Colin Haggerty as its Global Retail Operations Manager. The addition of Haggerty falls in line with Billabong’s strategy to continue globalizing the brand and supply chain.
Billabong now faces a possible takeover from Texas-based private equity firm TPG Capital LP, which offered $713.7 million for the company in July. That follows Billabong’s rejection of two offers from TPG earlier this year of $825.3 million and later $909.2 million.