It’s been a strange few years for the big five surf companies.
One of cutbacks, corporate re-structuring, losses and struggles to stay relevant in a constantly shifting marketplace. Yesterday it was announced that two of the biggest companies are merging to face the seemingly relentless uphill battle as one. Meet Quik-Bong (it’s not going to be called that).
Quiksilver’s acquisition of Billabong will reportedly create a mega-corp, not seen in the surf industry since Surfstich’s massive monopoly was disbanded, which will pull in $2 billion in annual sales and own 630 stores in 28 countries.
The acquisition follows a tough few years for Billabong, with the company registering $77 million worth of losses in the 2017 financial year and having its former CEO sent to jail for fraud last year.
“The board considers that it will become necessary for Billabong to materially reduce debt if it is to continue with its current strategy which, given the company’s existing high debt levels, is expected to require asset sales or a dilutive equity raising,” said Chairman Ian Pollard earlier today.
“Having regard to these factors, and the fact that shareholders are being offered an attractive premium for their shares, the board believes this offer is in the best interests of shareholders.”
In some instances, like when Billabong acquired Von Zipper and Element back in 2013, new ownership creates very little change to the companies’ overall look and feel, however, when, last year Surfer and Surfing magazine merged, the corporate overlords were quick to kill off the smaller of the titles to focus on the bigger. Accordingly, whether this Bong-Quik merger will have any meaningful impact on the way the companies are run, their surf teams, their staff and their branding remains to be seen.
Still, it’s undeniably odd times when two of the biggest rival brands in any given marketplace merge.