SYDNEY — Billabong International Ltd. plans to inject cash into new acquisition Rvca and move the California-based skate and lifestyle brand from a licensee operation to direct sales in 2011.
This story first appeared in the August 24, 2010 issue of WWD. Subscribe Today.
Billabong, which reached a conditional agreement to buy Rvca on July 12, said it will make a “significant investment” in the brand to maximize its long-term potential. The company said there has been strong retail interest in Rvca, particularly in Europe, where it has a low profile. Rvca generates an estimated $50 million in annual revenues.
The company also said it has made several other acquisitions.
Billabong has reached a conditional agreement to buy the 36-door Australian retail chain Rush Surf and recently acquired Becker Surf and Sport in the U.S., Bay Action in Australia, an interest in Australia’s leading online surf retailer SurfStitch.com and, via a joint venture, another Australian retail chain called Surfection.
The company reported a net profit after tax of 146 million Australian dollars, or $129.6 million, for the 2010 financial year, down 4.5 percent compared with the previous year. Total group sales of 1.48 billion Australian dollars, or $1.31 billion, were flat in constant currency terms. The company attributed the result to the volatile consumer environment, compounded by a strong Australian dollar. Conditions improved in the second half in its U.S. and European markets, while the Australian business deteriorated.
Billabong is forecasting net growth of 2 to 8 percent in the 2011 financial year.