Yahoo Finance Billabong posts massive losses, admits its brand is worthless
Troubled surfwear company Billabong has made a net loss of $860 million with major writedowns and a drop in revenue, and has admitted that the brand itself is worthless.
The company’s 2012/13 result was affected by $867 million in significant items, including more than $604 million in writedowns in the value of goodwill,brands and other intangibles.
It also included a $129 million writedown as a result of transactions involving US brand Nixon.
Bloomberg adds that the company’s brands, worth A$614 million at the end of2011, were worth A$90 million at the end of June.
Related: Billabong's staggering loss
Revenue was down 12.6 per cent, in constant currency terms, to $1.35billion.
It has been a difficult 12 months for the company, that has been the subject of a number of takeover bids during the year.
“The company has been experiencing continued difficult trading conditions,particularly in Europe,” Bloomberg quoted Michael Simotas, an analyst a tDeutsche Bank AG in Sydney, as writing in a note to clients Aug. 7.
In Billabong’s home market, “consumer sentiment continued to weaken and warm weather weighed on winter apparel sales,” he wrote.
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The company last month reached a $US294 million ($A325 million) deal with US-based Altamont Capital Partners which will allow it to repay its existing debts.
But two US hedge funds, Centerbridge and Oaktree, have since approached Billabong's board with their own recapitalisation plan, which they say provides Billabong with greater flexibility to address its financial problems.
Buyout ahead?
Billabong has confirmed it its considering the fresh offer.
The company chairman Dr Ian Pollard said the task of managing the multiple bids and refinancing proposals had been distracting for the company, but said the company had achieved a number of important reforms.
They included progress on efforts to sell Canadian retail chain West 49,cost savings and simplification of its businesses.
Related: Buyers walk away from Billabong
"We are nearing the end of a long process that has caused distraction,impacted on staff morale and has been very costly," he said in a statement on Tuesday.
"The company looks forward to refocusing, reinvigorating its brands and rebuilding the business on a solid, long-term financial footing."
Inputs from AAP and Bloomberg
