The Australian surfing brand Billabong has been desperately trying to stay afloat for quite some time, but after even more blood red financial results, even the Australians themselves had to admit their brand is now completely worthless.
Despite the closure of 158 stores and redundancy of fifteen percent of the European workforce, Billabong's losses are increasing and all attempts to steady the sinking ship seem futile.
Thetotal loss for this past fiscal year was 860 million Australian dollars (576 million euro), three times higher than the year before. The number even blew away the predictions made by analysts, who had feared a loss of 547 million dollars (384 million euro).
The thirteen brands belonging to Billabong International are worth a mere 90 million dollars (60 million euro), a stark contrast to their maximum worth of 3.8 billion dollars (2.5 billion euro) only six years ago. The Billabong brand has been described as ‘worthless’ by the company itself, a stamp Element (skateboards) and Palmers (surfing accessories) have also received.
Thestock market reacted badly after the results were revealed, seeing the share fall 5.3 percent to 53.5 cents a share. In the past year alone, the share plummeted 36 percent.
Hard times ahead
Despite the extra breathing space from the sale of West 49 and DaKine, the future does not look bright. Failed negotiations with the Sycamore Consortium, offering 60 cent a share, have forced Billabong to admit that it has been a ‘tumultuous year’, but the company still has hopes for the future.
A refinancing deal would free up 95 million euro in interest over the next five years, even though the net debt would still be huge. That debt rose 28 percent over the past year, reaching 138 million euro. Net losses over the past two years (760 million euro) have now eclipsed the profits of the eight years before that (735 million euro).