The future of one of Australia’s most iconic retailers, Surf Dive ‘n Ski, is uncertain after its parent company became the target of a celebrity-backed takeover bid.
New York-based Authentic Brands Group (ABG), owner of other big names such as Reebok, Forever21 and Juicy Couture, announced this week that it has made a $1.88 billion offer to buy Boardriders, the parent company of iconic Australian surf brands, including Quiksilver. and Billabong.
The sale also includes Surf Dive ‘n Ski’s 80 stores across Australia and its online business.
ABG, which is led by Canadian billionaire Jamie Salter and whose main shareholders include American basketball star Shaquille O’Neal and global football icon David Beckham, has been spending huge amounts of money recently, buying British brand Ted Baker last year.
The future of Surf Drive ‘n’ Ski’s 80 stores across Australia is uncertain
The lifestyle retail chain sells a range of outdoor action sportswear and more fashionable surfing gear
Last month, it was even rumored that a bid for Wellington’s Hunter brand of boots was being considered.
Now, ABG’s proposed acquisition of Boardriders will mean it could soon own some of the most iconic global brands in surf and skate – including Quiksilver, Billabong, Roxy, DC Shoes, RVCA, Element, VonZipper and Honolua – in addition to Australia’s own Surf Dive a skiing.
But analysts have warned that the future is uncertain for the leading lifestyle retailer under the proposed new owners.
Brian Walker, founder and CEO of the Retail Doctor group, said it was a “solid deal” that capitalized on ABG’s strategy to build a “brand house” but warned the new owners would likely try to review offer.
“They already have some pretty successful brands – Nautica, Reebok, Forever21. What does this deal get them? It gives them reach, scale and a multitude of brands so that they become a very powerful brand house,” Walker told Daily Mail Australia.
Shaquille O’Neal (left) is a major shareholder of Authentic Brands Group, founded by Canadian billionaire Jamie Salter (right). ABG has closed a deal to buy Boardriders – the parent company of Quiksilver and Billabong – and Surf Dive ‘n’ Ski’s 80 stores
“Ultimately, these machines need to keep growing to achieve efficiency. They sweep an array of brands on a global scale.
“From a consumer point of view, you’d like to think they’ll see an even sharper delineation between the brands. Surf Dive ‘n Ski is one. They really need to decide the future of Surf Dive ‘n Ski.
Mr Walker said SDS was in the middle of a conundrum.
“In Australia, they’re a bit too big to be small and too small to be big – so they’re in that middle ground now,” he said.
“I imagine they’re looking at it in terms of brand reference, to hone in on the point of difference. I’m not exactly sure who their core audience is. I think some of the other brands in the portfolio have a much clearer value proposition to the customer.
That being said, it’s a great, iconic brand name and has been around for a long time.
Does it have the potential to expand abroad? Does it have potential to be part of their brand livery? What is the value proposition? These are the questions that ABG will ask.’
Boardriders, which is more than 50 years old, has locations in America, Europe, Australia and Asia.
According to a retail expert, Surf Dive ‘n’ Ski could undergo a “refreshment” under the new owners
Its portfolio currently generates $2.9 billion in retail sales annually through a network of more than 500 stores, 7,000 wholesale accounts and websites in 35 countries.
But Boardriders cut nearly 200 jobs late last year as part of a cost-cutting drive by the company’s current owners, US private equity firm Oaktree Capital Management.
The job cuts, which occurred weeks before Christmas, included approx 70 staff based at the Boardriders office in Burleigh Heads on the Gold Coast.
Mr Walker said ABG would like to ensure that Boardriders’ established surf brands remain relevant to a younger market.
“Some of these brands will require major refreshes and overhauls in the near future,” he said.
“Both to become a ubiquitous company and to be relevant to a generational shift with Millennials and Gen Z.
“What I suspect will happen to the surf brands is that they will have a shorter, deeper life cycle than their predecessors. Part of that will be creating ongoing, new brands, so as we think about Roxy, RVCA, Element, part of the strategy will be to continue to create these fresh new brands and keep them hot.”
Mr Walker wondered if older, old brands would be better off off the store, given their place in the Australian market.
“Ultimately, I wonder if the Quiksilvers and Billabongs are reaching some sort of maturity and if these emerging and emerging brands will be critical as part of their strategy,” he said.
“They might look at this and say, ‘You know what, Roxy is a brand that’s really relevant. Yeah, it’s inside the parent brand, but it’s a great standalone brand and we can really build on that.’
“Quiksilver and Billabong will always have a place, but I honestly suspect they’re going to serve an older customer who grew up with them.”
Billabong’s fortunes have been far from secure over the years.
The stock price crashed in 2012, forcing 150 stores to close and 400 job losses.
Other celebrities supporting ABG include global football icon David Beckham (pictured center). ABG founder Jamie Salter is on the right
The company lost a massive $860 million in 2013 before recovering to make a small profit in 2015.
It was eventually purchased by Boardriders in early 2018 for $198 million.
Meanwhile, Quiksilver had run into its own problems, having filed for bankruptcy in 2016.
Another retail source said Boardriders needed the deal because of its $740 million debt, which ABG will pay back once they buy the company.
‘The strategy comes first and from there they will implement the right business model. It will be a BOA [business as usual] until they find out. These guys are pros. They are the natural owners of this company,” the source said The Australian Financial Review.
Daily Mail Australia approached Boardriders for comment on the future of SDS.
ABG claims sales of approximately $AU36.6 billion from its more than 40 brands through more than 10,000 direct outlets and some 380,000 retailers around the world.
Its founder and CEO, Jamie Salter, began his sporting goods career by co-founding snowboard manufacturer Ride Inc in the early 1990s.
He started ABG in 2010 and the company began acquiring the rights to brand names as well as the rights to deceased celebrities, including Marilyn Monroe, Michael Jackson, Muhammad Ali, and Elvis Presley.
Billabong could now be owned by the American company Authentic Brand
Within six years, he had grown it into a $1.5 billion company.
Notable shareholders include Shaquille O’Neal and David Beckham, both of whom are regular partners with Mr. Salter to take a picture.
Arne Arens, CEO of Boardriders, indicated that the parent company will expand into the lucrative athleisure market.
“Under the ownership of Authentic, Boardriders will be uniquely positioned to extend the reach of our iconic brands to millions of consumers, capture market share in our core categories and grow white spaces including premium athleisure, training and lifestyle,” she said.
Jamie Salter, Founder, Chairman and CEO of Authentic, said: ‘As an early believer in the global and commercial appeal of action sports, this takes me back to the roots of my early career.
“Together with the great brands and impressive global reach this acquisition brings, we see Boardriders’ potential as a thriving online marketplace under Authentic ownership.
“With Boardriders’ proven retail playbook, we also see tremendous opportunity to accelerate the expansion of its shop-in-shops, branded stores, wholesale and e-commerce globally.”
The takeover bid, which is expected to go through by the end of the year, is subject to approval by certain Boardriders representatives.