Similar to the company’s recent acquisition of West 49 in Canada, Billabong reached an agreement to acquire Australian retail assets from the General Pants Group and associated parties for an undisclosed price. Adding 38 retail stores, with banners including Surf Dive 'n' Ski (SDS) and Jetty, Billabong group's global retail portfolio will comprise approximately 558 doors. The transaction is anticipated to finalize on Nov. 1.
“SDS was one of Billabong's earliest retail customers so we have had a strong working relationship over many decades,” said Derek O'Neill, Billabong CEO. “We entered acquisition discussions with the view to preserving the assets as core boardsport retail doors and ensuring a route to market for the Group's strong portfolio of brands.” He added that the direct retail operations would enhance Billabong's visibility into the buying trends of the end consumer.
“There is good retail experience in the SDS and Jetty Surf businesses and this will complement what is already a strong retail management team in Australia,” he said.
O'Neill said the planned acquisition would strengthen Billabong's retail business in Australasia, a region that already delivers the company’s strongest retail margins.
Billabong expects the newly acquired business to contribute approximately 3% of Billabong Group revenue in the 2010-11 fiscal year, as well as be EPS neutral in year one.
