Billabong to make brand 'cool' again
Billabong International chief executive Neil Fiske has vowed to make the iconic surfwear brand "cool" again and has set out a seven-point plan to turn around the ailing retailer, which lost $860 million last year.
Mr Fiske hopes to apply some of the lessons he learnt as chief executive of US retailer Eddie Bauer, an outdoor clothing chain, and while working alongside legendary retailer Les Wexner on the turnaround at lingerie chain Victoria's Secret and Limited Brands.
Billabong's first priority was to strengthen its brand management by focusing on its top three global brands, Billabong, Element and RVCA, working out which of its emerging brands had the most growth potential, and allocating resources accordingly.
"At Limited every brand has a very detailed brand book - when I got to this company the first thing I did was ask to see the brand book for Billabong and I got a blank look," Mr Fiske told journalists after Billabong's annual meeting on Tuesday.
"It's just a good example of how we lost focus on the brands.
"One of the things that's neat about brands with heritage as deep and as rich as Billabong is they always have comeback potential.
"We can take a heritage brand, modernise it and make it relevant again ... I'm convinced it will become cool again."
Billabong also needed to strengthen its merchandise planning, culling excessive styles and products by as much as 30 per cent and working with its design team to create "fewer, bigger, better styles" that sold faster, delivered better margins and drove topline sales growth.
Mr Fiske was appointed CEO in September after Billabong finally reached agreement with US hedge funds Oaktree Capital and Centerbridge Partners for a $385 million debt and equity financing deal.
The 52-year-old former management consultant, who was selected by Oaktree and Centerbridge, said Billabong had become too complex and diversified. "We have been trying to do too many things and none of them particularly well," he said.
He wants to retain Billabong's retail operations, but focus on its "mono-brand" retail stores - such as Billabong and Tigerlily - rather than multi-brand stores such as Surf Dive 'n' Ski and West 49, which is for sale.
The company plans to cut costs to fund increased investment in marketing campaigns, especially in digital marketing, customer relationship management and social media.
It is also planning further supply chain rationalisation, sourcing from fewer suppliers and gradually diversifying out of China.
After a management exodus over the past six months, Mr Fiske is also scouting for several senior roles, including a new head of supply chain, global IT and HR executives and leaders for each of the three big brands.
Mr Fiske will outline his strategy in more detail and announce appointments in the next six to 12 weeks. He declined to estimate how long the turnaround would take or give profit guidance for 2014, but will update the market on what he hoped to achieve in the first six, 12 and 18 months to 36 months.
"I think we're actually quite close to stabilising the business. The one thing we have to complete is the placement and rights issue and once we fix the balance sheet we hire some of these key executives and the business will be in good shape and very much stabilised," he said.
"From there we can think about how we build and how we grow."
However, he conceded that Billabong would have its "work cut out" recovering from last year's $860 million loss.
Billabong shareholders thwarted attempts by dissident shareholder Coastal Capital to throw chairman Ian Pollard and two non-executive directors off the board and voted against the election of Coastal's two representatives, Todd Plutsky and Vlad Artamonov.