SURFWEAR retailer Billabong (ASX: BBG) has identified Australia as a weakness in its business and has vowed to turn around its home market which it says suffered from "misses" in its product offerings and sales execution.
Billabong, which suffered a near death experience four years ago after posting an $860 million loss, says weak consumer spending and an outmoded bikini range in Australia led to it falling short of its guidance range for FY17.
The retailer, which owns the Billabong, RVCA and Element brands, reported its other two regions in the Americas and Europe had reported stronger performance but the APAC region, which includes Australia, dropped 28.3 per cent in EBITDA for the financial year.
"Two of our three regions performed well last year the Americas and Europe. APAC fell short, some of it due to macro conditions and some of it from our own execution issues, which we are correcting," managing director and CEO Neil Fiske says.
The America's division achieved 46.9 per cent EBITDA growth while Europe recovered from a soft first half to post an 8.9 per cent growth in EBITDA.
"We feel very positive about the substantial progress in the Americas and Europe. Where we fell short was in Asia-Pacific, and most acutely in Australia," Fiske says.
"We certainly confronted tough macro conditions last year. Reports of retail weakness in Australia were widespread in a year marked by a number of retail chain closures, declines in mall traffic, and heavy discounting.
"All of these factors weighed on our result. Still, we can do better.
"We had some misses on product and on sales execution, and we needed to make some leadership changes.
Fiske says Billabong is committed to fixing four areas including product, sales, digital commerce, and retail execution.
"First, and most important product. We have fast-tracked changes to our assortment in both men's and women's, applied the learnings from our successes in the US, and we are using our large retail presence to test more ideas and respond more quickly to the market."
Fiske says the company also acknowledges it needs to improve its online offerings particularly in the APAC market which accounts for just 1.9 per cent of sales, compared to 7.4 per cent in the Americas.
"We have hired experienced leaders for both our mono-brand and multi-brand web businesses, have staffed up the teams and are investing much more aggressively this year to accelerate growth, especially in mobile.
"This past week we have launched the first of a series of new websites on our new, far more advanced ecommerce platform here in Australia with Surf Dive and Ski.
"The launch has gone well and the early reads are positive on the site's key performance indicators. This is an important milestone in our program; we now have the tools and the team to quickly accelerate ecommerce revenue. Other websites will follow in CY18."
BBG shares were trading up by more than 10 per cent at around 12.30pm (AEST).
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