AUGUST 2010
Listed surf retailer Billabong International (BBG) is in aggressive acquisition mode and can now add Californian brand RVCA, West 49 and a raft of surf stores in Byron Bay to its expanding brand quiver.
Billabong emerged victorious in an acquisition battle for Canadian company West 49 after retailer Zumiez pitched a rival bid for the surf brand.
Billabong announced on June 30 that it had entered into a definitive acquisition agreement with West 49, which would see Billabong acquire W49 for C$1.30 per share.
Meanwhile the company’s acquisition of RVCA will contribute around 2 per cent of Billabong group revenue and will be EPS neutral in the 2010-11 financial year. The purchase price is not considered material.
RVCA was founded in 2000 as an art and design-driven brand focusing on a diverse range of youth activities.
Billabong chief executive Derek O’Neill says RVCA is one of southern California’s most exciting emerging brands.
“RVCA is not defined by any single sport or culture. It represents a community of culturally-aware youth and is inspired by a diverse range of interests, each of which is underpinned by an original, highly creative design element,” said O’Neill in a statement to the ASX.
“It is a brand that has developed a very strong presence in the United States, particularly in southern California, on the strength of its fashion-forward ranges in categories including art-driven T-shirts, denim, wovens, boardshorts and, more recently, its girls’ line.”
The bulk of RVCA’s revenue is generated in the US, while its expansion into other key markets including Australia and Europe is in its infancy.
Brand founder Pat Tenore says he and his existing management team will continue to drive the development and growth of the brand.
“By joining with Billabong we can retain our focus on our creative strengths, while leveraging the distribution and supply chain infrastructure and support of the Billabong group,” he says.
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