Billabong Chair Steps Down, Company Provides Turnaround UpdateWednesday, October 24, 2012
Ted Kunkel resigned as chairman of Billabong International Ltd. following yesterday’s annual shareholder meeting.
Australia-based Billabong International is the parent of Billabong USA, which is headquartered in Irvine. The company owns a stable of brands that includes its namesake label as well as Orange County-based RVCA, Element, Honolua and VonZipper, among others. Billabong also owns several retail chains.
Kunkel announced his intent to step down as chair earlier this year, with the company later naming Ian Pollard chairman-elect.
Billabong has about $1.6 billion in sales but has seen declines in revenue in recent years. It recently laid out a turnaround strategy as it considered two buyout offers. Texas-based private equity firm TPG Capital LP withdrew its $714 million offer earlier this month. A competing offer, from a bidder the company did not identify, was withdrawn in September.
The withdrawal of the bids has prodded the company forward on its turnaround plan.
“The company needs to move forward quickly with the transformation strategy and it is appropriate that it does so under its new chairman,” Kunkel said during the shareholders’ meeting.
Kunkel will stay on as a non-executive director to assist with the transition and expects to retire from the board by the end of November.
Chief Executive Launa Inman provided an update on the company’s turnaround strategy during the annual shareholders’ meeting. The plan was launched in August and includes store closures and a slimmer offering of clothing styles.
Billabong has so far closed 90 underperforming stores and expects to have a “significantly reduced” lineup of 2013 winter styles, Inman said.
Inman also hinted at possible changes in the company’s organizational structure, which had been put off to address the two former buyout bids for the company.
“The circumstances of the last few months, with two potential bidders for the company, has meant that we have not been in a position to undertake major change around our organizational structure,” Inman said during the shareholders meeting. “Work on that is now well underway on what the best structure for the organization looks like and I expect there will be some fundamental changes.”
Inman did not elaborate on those changes.
Meantime, Billabong founder and non-executive director Gordon Merchant acquired 900,058 Billabong shares last week, according to documents filed with the Australian Securities Exchange. The shares were purchased at 85 cents and 87 cents.
Merchant now holds a 14.6% stake in Billabong.