SYDNEY—Billabong International Ltd. said Thursday it has agreed to sell its 51 percent stake in Australian surfwear e-commerce player SurfStitch and 100 percent of the California-based surf site Swell to a consortium of investors including SurfStitch founders Justin Cameron and Lex Pedersen, for 35 million Australian dollars, or $33 million at current exchange.
Conditions apply, including the completion of the funding process being undertaken by the SurfStitch consortium, with this condition to be satisfied by the close of business on Monday. Completion is expected to occur in mid-September.
In late July, as confirmed by sources close to Cameron and Pedersen, the duo met with a dozen fund managers at their Gold Coast headquarters to discuss the proposed buyback from Billabong and a 300 million Australian dollar ($279 million) IPO.
A SurfStitch spokesperson was unavailable for comment at press time.
"In recent months we have begun the process of taking over the branded websites previously outsourced to SurfStitch," said Billabong chief executive officer Neil Fiske. "With these agreements we can accelerate our investment in the online presence and digital marketing of brands such as Billabong, RVCA and Element, which will engage our core customers and in turn benefit the wider business."
“This is the next natural step for our global market-leading ecommerce operations,” said Cameron. “Today’s agreements will allow both parties to pursue their strategic vision. We’ve valued the close relationship with Billabong and, like Neil, we're glad it’s one that will continue."
Founded in late 2008 by Cameron and Pedersen, SurfStitch claims to be not only the largest surfwear e-tailer in Australia and Asia, but the world’s largest online action sports and fashion e-tailer, offering 600 brands and 20,000 products, with sales of 80 million Australian dollars in fiscal 2014, or $75.25 million at average exchange.
Billabong acquired Swell and a 20 percent stake in SurfStitch in 2009, increasing to 51 percent in late 2012 as SurfStitch ramped up its European operations by establishing a 86,111-square-foot distribution center on the west coast of France, where 70 of the company’s 300 staff are now based.
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