Surf's down for Australian retailers

By Bizclik Editor

Australia's beaten down retailers have proved attractive for buyout firms this year as harsh trading conditions battered sales and share prices. Rip Curl Group Pty Ltd's larger rival Billabong International Ltd is also fielding two private equity bids.

It has been suggested that Rip Curl could seek about 10 times its forecast fiscal earnings of A$48 million for 2013.

Rip Curl, founded in 1969 by friends Doug "Claw" Warbrick and Brian "Sing Ding" Singer near the surfing haven of Bells Beach, southwest of Melbourne, is one of the three largest global surfwear brands.

The company said it has appointed Bank of America Merrill Lynch to assess the merits of introducing an investor to the group.

“We have recently received unsolicited approaches from several international organisations which have indicated a desire to invest in our company,” Rip Curl said in a statement.

It added that unaudited revenues and earnings for the year to June had increased over the prior year, in contrast to general surf industry performance.

Rip Curl competes with Billabong and Quiksilver Inc, which was also founded near Bells Beach in 1969 but listed in the United States in 1986.

Billabong, which is struggling after a debt-fuelled global expansion just before the financial crisis hit, has had two takeover offers worth $700 million, from U.S. private equity firm Bain Capital LLC (of Mitt Romney fame) and from TPG Capital. Both are examining Billabong's books.

Rip Curl is a manufacturer and retailer, with stores in Australia and New Zealand, the United States and Canada, Europe and South America. It has one main brand, unlike Billabong, which owns many brands.

Its founders took over an old house in the seaside town of Torquay and bought a pre-World War II sewing machine to start production of wetsuits, according to the company's web site.

The owners are now aged 68 and 70 and are considering their options for the business, having had approaches over the past decade.

Source: Reuters

Share

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

Sustainability

Huawei smartwatch goes for gold with Ultimate Edition

Lifestyle

How IKEA India plans to double business, triple headcount

Corporate Finance