Quiksilver is preparing for bankruptcy, according to reports.
The surf wear group, founded in Australia in 1973, and a competitor of Billabong, has been looking for buyers including a management buyout without success.
The company has been struggling to compete with new retailers such as H&M and to maintain a cool image for its core demographic, young people. Sales dropped 14% last year and the company posted a loss of $309.4 million.
Under US bankruptcy laws, Chapter 11, Quiksilver would get immediate relief from paying debtors.
According to Bloomberg, investment firm Oaktree Capital Management would take control of the company and provide provide $175 million in finance.
Oaktree, based in Los Angeles, already has a connection to the surfwear industry. The firm, together with Centerbridge Partners, is the largest backer of Billabong International Ltd, the Australian brand. Oaktree has a total of more than $100 billion under management.
Matthew Wilson, who joined the Billabong board in November 2013 as a representative of major shareholder Oaktree, resigned overnight due to “a potential conflict in Oaktree’s investment portfolio”.
In the 1990s, Quiksilver launched ROXY, a beach and surfwear brand for women which that would coincide with surging popularity of women’s surfing through the accomplishments of riders such as Layne Beachley.
ROXY would later launch a range of denim and snow gear and become an enormously popular fashion brand in Australia and overseas.
Quiksilver was famous for its invention of the boardshort, a standard item of beachwear for Australians over generations. The boardshorts used two snaps and a Velcro closure to ensure they stayed on in the heaviest conditions.
The business was founded by Alan Green and John Law so that they could make a living in Torquay, Victoria, and still go surfing.
Alan’s wife Barbara came across the word quicksilver — meaning elusive, liquid, mercurial, changing readily — and she thought that sounded similar to what Alan was trying to do.
It became a $1 billion company in 2004.