Billabong is selling its its multi-brand ecommerce businesses SurfStitch.com in Australia and Europe and Swell.com in North America.
The troubled Australian surf clothing group will get $35 million for selling its 51% stake in SurfStitch and its 100% ownership of Swell to a consortium of investors including SurfStitch founders Justin Cameron and Lex Pedersen.
Billabong is due to report its full-year results next week.
In the half year to December, Billabong posted improved results but still had an after-tax loss of $126.3 million compared to a loss of $536.6 million previously.
Since then the company has been consolidating its brands and restructuring the organisation.
In the latest move, Billabong will also enter into agreements for the continued wholesale supply of products to SurfStitch and Swell.
The sale will allow the company to narrow its strategic focus and to invest in building its mono-brand ecommerce and omni-channel businesses.
Billabong CEO Neil Fiske says the sale means the company can accelerate investment in an online presence and digital marketing of brands such as Billabong, RVCA and Element.
“We believe there is an enormous untapped opportunity here for the company,” he says.
“I’m pleased that through these agreements we will also continue the constructive relationship we’ve had with SurfStitch as they enter an exciting new era for their business.“
SurfStitch co-founder Justin Cameron says today’s agreements will allow both parties to pursue their strategic vision.
“We’ve valued the close relationship with Billabong and, like Neil, we’re glad it’s one that will continue,” he says.
International investment banking firm Guggenheim Securities advised Billabong on the review and sale process.
JP Morgan is the funding arranger and adviser to the SurfStitch Consortium.
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