Surf companies' profits continue to nose dive

By Bizclik Editor

The chilly weather has not done Aussie surf retailer Billabong any favours this summer.

The Gold Coast-based company’s shares have plummeted 34 per cent since forecasting a significant earnings decline for the first half of the financial year, forcing the iconic surf brand to issue a profit downgrade to the ASX.

In addition to the cold, wet summer sweeping Australia, Billabong blames its low earnings on slow sales in Europe, a late start to the northern hemisphere’s winter weather, and tough trading conditions in North America.


Click here to read the latest issue of Business Review Australia

"The reasons for the sales slowdown vary by region, but the data received reflects the European sovereign debt issues and the ensuing fears of global recession which are impacting consumer confidence and spending patterns significantly," the statement read. Billabong is reviewing its capital structure with advisor Goldman Sachs.

Clothing sales, particularly swimwear and shoes, have been hit the hardest this summer, according to Australian Retail Association (ARA) executive director Russell Zimmerman.

In Melbourne for example, the first four days of December never rose above 21 degrees, making it the coolest start to summer in 24 years, Weatherzone senior meteorologist Josh Fisher told the Sydney Morning Herald.

In slightly happier waters, troubled surf brand Hot Tuna has signed a wholesale and distribution deal with International Fashion Group Australia to expand its brand across the Indian Ocean.

"We are developing a strategy for the Hot Tuna brand to enter the rapidly expanding South East Asia market," Hot Tuna executive chairman Francis Ball told Just Style.

Here’s to hoping the sun shines more brightly for Australia’s surf wear companies in 2012.


Featured Articles

Nirvik Singh, COO Grey Group on adding colour to campaigns

Nirvik Singh, Global COO and President International of Grey Group, cultivating culture and utilising AI to enhance rather than replace human creativity

How Longi became the world’s leading solar tech manufacturer

On a mission to accelerate the adoption of sustainable energy solutions, US$30 billion Chinese tech firm Longi is not just selling solar – but using it

How Samsung’s US$5billion sustainability plan is working out

Armed with an ambitious billion-dollar strategy, Samsung is on track to achieve net zero carbon emissions company-wide by 2050 – but challenges persist

UOB: making strides in sustainability across Southeast Asia


Huawei smartwatch goes for gold with Ultimate Edition


How IKEA India plans to double business, triple headcount

Corporate Finance