Aug 21, 2010
Billabong profit plunges 5%
Aug 21, 2010
Global net profit for the Australian surf brand fell by 4.5% to total 130 million dollars for this previous year, up to June 2010. Billabong blamed the drop on a negative impact of foreign exchange movements translated by the Australian dollar.
11.2% drop by worldwide sales similarly reflected Europe’s situation; 11.3% plunge in reported terms, as in the Americas (down 14.8%). Profit for the second half of the year looked up but European activity was still restricted by capacity constraints and shipping delays out of China. US retail progress was not uniform across the country. Online sales saw growth through the acquired Swell business coupled with the existing online businesses, Nixon, VonZipper and Sector 9.
The company reported a particular hit by the crisis so responded to economic environment changes by “executing long term strategies to maximise future profitable growth opportunities for shareholders.”
New stores continued to be set-up however; 45 doors opened around the world this year so far.
Acquisitions are guiding the surfing brand’s growth through companies such as West 49 in Canada, America’s workwear brand RVCA, Australia’s Bay Action and 36-door Rush Surf (announced Friday) retailers.
CEO Derek O’Neill is hopeful for the future and expects profit growth of 2 -8 percent this year. This will depend on the effectiveness of proposed strategies; adjustment of overhead costs and maximization of media partnerships, social media and TV.
By Rosie Hart
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