Billabong sells West 49 to stay afloat

West 49 on
display

After
negotiations with potential investor Sycamore Partners turned out to nothing
early May, the talks of the last chance – with Altamont – have also shut down
entirely. There is
now nothing left to do for Billabong but to go and talk with Altamont and Sycamore
about refinancing the company and the sale of parts of it. In February Billabong had given 80% of its properties and 85% of
its profits as collateral to its creditors, when it could not meet the demands
of its loans.

According
to the Wall Street Journal business bank Financo has been appointed to find a
buyer for West 49. Billabong had bought that Canadian fashion chain for young people
in June 2010 for 75 million euro, but since then the number of shops has halved from 138 shops to just over
70.

Share price
plummets

Because of
the bad news the price of the Billabong share has crashed at the exchange of
Sydney: the share lost almost half its value. Today the group is worth only
110.2 million Australian dollar (about 80 million euro). At its peak, in May
2007, Billabong was valued at no less than 3.84 billion Australian dollar
(about 2.8 billion euro).

And because
bad news never travels alone, Billabong has also lowered its profit forecast
for this financial year (ending on 30 June). Management is now counting on a
company result of 67 to 74 million Australian dollar (50 to 55 million euro).
Earlier Billabong had predicted somewhere between 74 to 81 million Australian
dollar.