The troubled online clothing retailer SurfStitch has sold action and extreme sport video business Garage Entertainment to the Madman Media Group for a loss.
SurfStitch in 2015 paid $15 million in cash and shares for Garage and its assets including the acclaimed Australian documentary Bra Boys.
The exact price paid by Madman wasn’t revealed but Surfstitch says it was “a nominal cash consideration”.
In its 2016 results, SurfStitch recognised a $12.9 million impairment for Garage Entertainment.
The sale of Garage starts the unraveling the strategy of the previous management led by co-founder and former CEO Justin Cameron who wanted Surfstitch to be the Netflix and Amazon of extreme sports, the centre of a digital ecosystem around the surf and action sports lifestyle. He wanted to own the content that drove sales.
Surfstitch may still get access to Garage’s content without owning it. Madman has agreed to negotiate on providing content development and advertising services.
Madman says: “Adding Garage Entertainment action sports and adventure film content offering to Madman Media Group’s suite of proprietary streaming VoD (video on demand) services will deliver a market leading offering to action sports and adventure film fans across all popular platforms.”
Madman’s streaming services include AnimeLab, which hosts hits fast-tracked from Japan, and DocPlay, a streaming hub for the world’s best documentaries.
The addition of Garage creates an aggregated subscriber base for Madman of more than 600,000 registered users.
Madman’s productions include That Sugar Film and A Month Of Sundays.
SurfStitch in February posted a half year loss of $5.6 million and expects more of the same for the rest of the year as restructuring continues.
The company’s management was restructured after the surprise departure of Justin Cameron in March last year.
The company then said it understood Cameron was pursuing a potential acquisition of the business in conjunction with private equity. There has been no news since.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.