Billabong International Inc., a 40-year-old Australian surfwear company, reported its most dismal earnings ever as it wrote down the value of its namesake brand to zero.
For the fiscal year ended June 30, the business said it suffered a net loss of 859.5 million Australia dollars, or about $770 million. That’s more than triple the loss the company reported the prior year.
The Billabong brand is now essentially worthless, the company said, after its value was pegged at roughly $226 million a year earlier. All of the business’ brands together are now worth $80.7 million, down from $343 million last year.
Revenue slid 13.5% to $1.3 billion.
Billabong has suffered what Chairman Ian Pollard called “the most challenging period in the company’s history.”
The business is selling off holdings such as Canadian retail chain West 49. It has closed 158 stores and trimmed its supplier list by 75%. The company also slashed 15% of its European headcount.
“We are nearing the end of a long process that has caused distraction, impacted on staff morale and has been very costly,” Pollard said in a statement.
Billabong is weighing multiple takeover overtures as well as refinancing proposals from private equity groups, including a deal led by Altamont Capital jostling with a proposal from Centerbridge Partners and Oaktree Capital in Los Angeles.
Surfwear firms in California also didn’t fare well in their most recently reported quarters. Quiksilver Inc. of Huntington Beach said its second-quarter net loss widened to $32.4 million from $5.1 million the year before. Pacific Sunwear of California Inc., based in Anaheim, said its first-quarter net loss expanded to $24.2 million from $15.6 million.
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