Irvine-based Billabong USA is looking to its parent company’s public debut Down Under to drive a swell in its business here. Australia’s Billabong International Ltd., which owns and operates Billabong USA, went public Friday on the Australian Stock Exchange, becoming the surfwear industry’s second publicly traded player after Quiksilver Inc. in Huntington Beach.
“When Quiksilver went public it was positive for the surf industry and added credibility,” said Paul Naude, Billabong USA’s president and chief executive. “I hope our situation will build on that.” The Billabong offering raised $171 million, with about half going to the company. The company’s shares rose 36% on their first day of trading. Billabong USA is set to be a beneficiary of the proceeds. The unit is expected to account for nearly half of Billabong’s projected annual sales of $190 million for the 12 months ending June 30, 2001. Billabong USA is looking to expand its burgeoning women’s line with swimsuits and also launch into snowboard apparel and accessories and other new products such as watches. “We don’t see any significant changes in how we will operate,” Naude said. “But we will have the added benefit of significant funding.” Billabong’s Australian executives are looking to North America for growth. According to Billabong’s prospectus, the company projects North American sales this fiscal year to rise by one-third from the $70 million forecast for the 12 months ended June 30, 2000. The apparel maker’s marketing budget stands to increase as it plans to invest more into growing its product lines. Last year, Billabong USA launched a junior’s line, Billabong Girls. At September’s Action Sports Retailer Expo in San Diego, the company is scheduled to launch a 30-piece women’s swim-wear line as well as men’s and women’s wristwatches. The watch line includes about a dozen models with prices ranging from $80 to $240. Billabong designs and produces men’s and juniors’ clothing, including board shorts, walking shorts, fleece tops, T-shirts, backpacks, pants and jeans. Sales are through core surf shops and specialty chain stores including its top buyer, 480-unit Pacific Sunwear of California Inc., Anaheim. And the company is profitable. For the 12 months ended June 30, Billabong forecast a profit of $23 million before taxes and other items. That’s double the company’s operating profit from fiscal year 1998. For the 12 months ended June 30, 2001, Billabong projects an operating profit of $39 million.
As a public company, Billabong will have more access to capital to expand its global reach and acquire more companies in Asia, Japan, South America, Middle East and North Africa. Billabong acquired its U.S. license in November 1998, and took over its licensed Canadian operations in 1999 and its licensed New Zealand operations in 2000.
