Quiksilver seeking a buyer?
Yesterday Bloomberg Business reported that Quiksilver is looking for a buyer to rescue the company from its sharemarket woes and keep the company afloat.
It was dramatic talk from Blloomberg yet it follows a terrible run for Quiksilver. In the first six months of 2015 Quiksilver lost two-thirds of its value, trading near $2.50 in February to below $0.50 in July. In that same month Quiksilver received a warning from the New York Stock Exchange that its low stock price put it at risk of being delisted. Its share price has remained south of $0.50 since. In March they ousted CEO Andy Mooney in circumstances that unsettled investors.
Bloomberg says Quiksilver have been "holding discussions with potential strategic bidders...the goal is a management-led buyout, ideally outside of a bankruptcy, that would let the company retain its stores." However, "a sale outside of a bankruptcy could be difficult." In the US bankruptcy means the company can walk away from existing store leases, making it easier for a potential buyer to rein in costs. If that were to happen the buyer would be purchasing the Quiksilver name only.
Quiksilver was once considered the biggest surf company in the world, one of the 'Big 3' surf companies along with Rip Curl and Billabong. Both those companies have faced their own hurdles in recent years - Billabong dropped from a high of $12.00 in 2009 to $0.40 in 2013 and underwent multiple management restructures, Rip Curl posted losses from 2010 to 2012 when it was offered for sale - yet both have turned around their fortunes. Last month Billabong reported its first profit in four years, while Rip Curl posted a 63 per cent increase in net profit for the 12 months to June 30, 2014. It's since consolidated its position further.
Quiksilver shares jumped 32 percent after Bloomberg reported on the potential buyout, before dropping again. They curently sit at $0.46.
In recent years Quiksilver have shed much of their sponsored team though they remain name sponsors for two contests on the Mens WSL Championship Tour and two on the Women's tour.
Comments
Remember when everyone was saying Kelly Slater was crazy for leaving Quiksilver?
Yep tell me about it.
Anyone taking bets on who will pick up Mr Reynolds? Or bets on whether any new owners will keep him as a boardshort and WSL wildcard marketing tool?
Why be surprised by this. A article done by Phil Jarratt a while ago called "Quiksand" pretty much gave the outcome from some insiders and financial experts on the current state of Quiksilver. Its easy to bag them out. But so many other surf companies have made the mistake that they have. Buying retail is a huge risk when you where manufacturers now you are retailers and you are competing against the same mum and dad surf shops that have supported Quiky. They will go down fast as they have so many under performing shops in their portfolio. A example is the Quik shop at Byron Bay pays over $700k for the 2 shops. How the hell can you make money when the rent is so high. Quik Coolangatta sold about 4 boards in a week. That does not even cover wages.
A management buy out will not occur unless the CEO is a part of it. He brought in Rohne who is a private equity partner last time. The clock is ticking on this and I think that they have only a matter of weeks to pull it off. The next quarterly results are due Sept 9 and I can only imagine how much money they are bleeding. Feel sorry for the workers but the management have a lot to answer for.
Well I guess every company has a boom to bust cycle. Quiksliver's turn. Will be an interesting one to watch and some magic to turn this one around.
Following 6 months of body blows??? - Might not 6 years of body blows be more accurate?
Kelly Slater left ? Or maybe Quik could not pay him any longer anywhere near the degree of the past.
I hear the guy in charge when slater departed - Mooney -- was criticised by all and sundry, but what if he was the one diligent person there legitimately trying to salvage a wreck inherited?
Will anyone analyse the true demise of a once great company that I think originated out of Australia?
Has anyone else heard Bob McKnight proclaim himself as founder of Quiksilver - and would that be accurate or a gross misrepresentation?
B2B, I've never heard McKnight claim to be founder of the brand, although he was certainly the driver behind ZQK's stock exchange listing back in '86. The American media has more or less claimed the brand as their own invention for decades, but they might start giving it back to us now. I do find it strange that US media misrepresentation has worked its way here too, with so many people assuming Quik is theirs.
I can't get too emotionally worked up about its impending demise. Life is a cycle, and Quik had a good run, bought a few people beachfront houses, did some good through the Foundation, got tripped up by its own exploding ego. So it goes. Next.
I am likely to get shot down here too, for being completely wrong...but I think the company was started by Al Green and John Law, in Torquay. McKnight and Jeff Hakman bought the licensing rights in the 70s, there is a funny story about Law and Green making Hakman eat a paper napkin, in order to seal the deal...
my old man is from Geelong and he told me the story, so please direct all abuse to him if its incorrect..its fathers day after all
Founded by board short manufacturers Alan Green, Carol Macdonald and Tim Davis last summer of the 1960's. (The Mountain and the wave. Written by the esteemed Mr Phil Jarrat). I stopped in at the Quiksilver shop in Singapore and had an argument with the shop attendant about the origins of the brand. He was convinced it was born in America. I wish I had his email address - I'd send him a link.
When you consistently make garbage clothing of less and less quality eventually customers join the dots and move elsewhere to more robust clothing that lasts more than three wash cycles, obviously in hindsight Kelly Slater has gone to the other extreme after leaving QS making outrageously priced pieces of clothing where a hoodie costs 1% of the average American wage, .......both models are not sustainable long term IMHO.
Rip silver? Nah.... Quick bong?
Quik-Curl Ripabong.
looks like quik are trying to find a buyer , the only hope is the French banks , but who would want to buy $500m in debt?
have to agree with Phil , that quik has been a vehicle for a small group of people to become very rich, some very very rich.
The Quik legacy in surfing will be just another surf Co who's owners managers took all the money and ran and left a empty debt ridden shell of a Co . the biggest bummer in all this , is no real career path for any of the founders/owners kids , and it really shows being a public Co is all about the $'s and Quik has always been doomed to become a supermarket brand as soon as their $ making cycle finished.
Must be hell working at Quik , not knowing if and when you will be fired , an no real confidence in the future!
Here we go...
Shop Eat Surf just reported that Quiksilver is laying off 77 employees in America today. That equates to about 15% of the workforce in the region.
They're also reporting that Quik recently stopped paying severance payments to former executives and employees.
Quik is scheduled to report third quarter earnings next week.
Guess I was lucky to get a bronze handshake when they showed me the door all those years ago!
Sorry guys--just can't seem to stop with the the Dora quotes---" Professionalism will be completely destructive to any control an individual has over the sport. Also, since surfing's alliance with the decadent big-business interests is designed only as a temporary damper to-- "Complete Fiscal Collapse",-- the completion of such a partnership will serve only to accelerate the art's demise." MSD--aka--Da Cat
And the news keeps getting worse. According to Bloomberg, "Quiksilver Inc. is preparing to file for bankruptcy as soon as Tuesday evening in a deal that would hand control of the beleaguered surfwear chain to investment firm Oaktree Capital Management."
Quik shares tumbled to $0.10 upon the news but have 'rebounded' to $0.18.
Oaktree are majority owners of Billabong, holding 38% of shares in a consortium with Centrebridge Partners.
So the new business will be Quikbilly?
Behind every cloud there a Silver Bong........
From the bloomberg link:
"Quiksilver’s European and Asia-Pacific operations won’t be part of the filing, the person said."
So, the Australia operations will remain 'business as usual'? Surely there has to be a flow on impact, if nothing else, damage to the brand.
Kelly jumped ship at the right time, hey?
In 2010 Slaters stake in Quiksilver was 22mill......did he off load all or some of his shares?
Quik's problems are just the natural progression of a technical sports wear company that goes into the fashion industry.
It basically goes like this:
The start up phase sees people making new or innovative products designed for specific athletic pursuits (surfing/mountain biking/mountain climbing) etc.
Great products create a great brand that then gets moneterised by slapping the logo on products that have no relation to the original sport. e.g. wallets, t shirts, laptop bags, luggage. Pretty much anything. Have you seen how many fat punters are wearing North Face T Shirts lately. These lard arses have never been on a mountain in their lives and a big climb for them is walking up 3 stairs to get to the bar fridge.
At this stage the $$$ are rolling in but the company has now entered a highly competitive "fashion" market that relies on driving down supplier and logistical costs. Fashion is very fickle and non-surfers are very quick to dump labels when the next trend comes along. Overheads can never fall faster than revenues so quality drops.
Do companies like Quiksilver go back to being pure technical clothing companies or do they go down the Piping Hot route and end up flogging $5 shirts in Kmart? That's the interesting question.
Q/s can't regain their once lofty pedestal as an innovative surf label that is representing the surfing culture , it is now doomed to the supermarkets as they lost Gen Y , and their demographic customers are now all older non-surfers , as can be seen at the footy or even in airports.
at least a few people like Phil got a ride on the gravy train , but now no-more gravy , just an empty shell of a company!
Not a lot of gravy during my ride, Sharky, at least not coming my way! As a fellow former Quik exec noted this morning, "Just because we were at the trough with them, doesn't mean that we were all pigs!" It was an interesting decade that I wouldn't trade.
interesting to see an ex quiky exec admit there was a trough , and he didn't eat at it , it might be me but I find it hard to believe.
sure was a lot of others who profited big time and didn't even surf!!
On the Bloomberg news website today 09/09/15 is the article that says
"Quiksilver said to plan Bankruptcy Filing as soon as Tuesday
The Torquay Quiksilver concept store will open this weekend after a huge renovation to include a cafe and barbershop.
Greg Healy is hoping to protect the value of Quik Aus with revenue from quinoa salads and hipster haircuts!
You would have to think it is over. They sell their stuff in Myer.
I said all along Kelly would buy back in..he's the only guy that could actually bring credit to the brand, if it was re-marketed as a tech product company and go along an ecological route. But the goose is cooked and I understand his investment in the wave pools is significant. Maybe if he losses out with Outerknown then he could come back to the table in a partner buy back in. I never thought Bong would make it back from the brink so it can be done.
Top gravy train though wow what a ride.
"Under a plan announced Wednesday, affiliates of Oaktree Capital Management LP will supply the chain with the $175 million financing it needs to get through a restructuring. At the conclusion of that process, Oaktree will exchange its debt claim for a majority stake in a reorganized Quiksilver. "
http://www.bloomberg.com/news/articles/2015-09-09/quiksilver-files-for-b...
What a steal
Shame in a way.
Their clothes were rubbish but they made pretty good stuff years ago and their wetsuits were/are excellent.
Also, lots of people employed by them now no doubt uncertain about their future.
Placing all the rorting & bulllshit to one side, it's always been the best logo IMO. I remember as a youngster drawing that logo on everything!!
"Quiksilver stock is retreating by 79.14% to 1 cent in pre-market trading on Wednesday morning"...
http://www.thestreet.com/story/13281578/1/quiksilver-zqk-stock-dives-in-...
Looks like trading has been halted on the NYSE too.
And.. how's this timely recommendation?
"Quiksilver (ZQK) is Downgraded by ROTH Capital to Sell , according to the research report released to the investors. Earlier the firm had a rating of Buy on the company shares."
http://www.moneyflowindex.org/quiksilver-zqk-is-downgraded-by-roth-capit...
As someone that knows nothing about the stockmarket.....wouldn't this be a good time to buy a few cheap Quik shares ?
They ain't available. Trading in ZQK shares has been halted on the NYSE.
Oh well. Cheers Ben.
"Quiksilver Receives Court Approval for $175 Million DIP Financing"
http://www.valuewalk.com/2015/09/quiksilver-receives-court-approval-for-...