Billabong International Ltd. reached a conditional agreement to acquire California apparel brand RVCA. Terms of the deal were not disclosed. Billabong expects RVCA to contribute 2% to Billabong group revenues in the 2010/2011 fiscal
year and be neutral to earnings.
In a statement, Billabong said RVCA, based in California, was founded in 2000 as an art and design-driven brand focusing on a diverse range of activities that both represent and inspire youth.
Billabong International Limited chief executive officer Derek O'Neill said RVCA was one of southern California's most exciting emerging brands.
“RVCA is not defined by any single sport or culture. It represents a community of culturally aware youth and is inspired by a diverse range of interests, each of which is underpinned by an original, highly creative design element,” said O'Neill. “It is a brand that has developed a very strong presence in the United States, particularly in southern California, on the strength of its fashion-forward ranges in categories including art-driven t-shirts, denim, wovens, boardshorts and, more recently, its girls' line.”
The bulk of RVCA's revenue is currently generated in the US, while its expansion into other key markets including Australia and Europe is in its infancy. Brand founder Pat Tenore said he and his existing management team will continue to drive the development and growth of the brand.
“RVCA's key strength has been its ability to differentiate itself through creative design,” said Tenore. “By joining with Billabong we can retain our focus on our creative strengths, while leveraging the distribution and supply chain infrastructure and support of the Billabong group.”
Billabong North America President Paul Naude said RVCA has done a great
job of building its brand and will now benefit from Billabong's global
infrastructure.
“There comes a time in the development of a young brand when the
administrative side of doing business can start to consume resources
that are better applied to the creative development of the brand.
“I think this is one of the strengths of the Billabong group. We have
capabilities in areas including sourcing and the management of the
supply chain, distribution and general financing and these types of
support structures allow our brands to focus on product and marketing,”
Naude said in the release.
Billabong's philosophy of letting its acquired brands keep their
identity and operate fairly independently appealed to RVCA founder Pat
Tenore.
“One of the key things about Billabong is its respect for the creative
independence of each of its brands and that level of flexibility will
allow RVCA to maintain its identity while benefiting from the support of
the wider Billabong group,” Tenore said in a statement.
Billabong's acquisition history
2001 – Von Zipper (sunglasses), Element Skateboards (skate hardgoods,
apparel)
2004 – Honolua Surf Company (retail/wholesale), Kustom Footwear, Palmers
Surf (surfboard accessories)
2005 – Airport-based retail chain
2006 – Nixon (watches), Beachworks retail
2007 – Xcel (wetsuits), Tigerlily (contemporary apparel)
2008 – Sector 9 (skate longboards), DaKine (backpacks, accessories),
Quiet Flight retail
2009 – Swell.com, investment in Surfstitch.com (both online retailers)
2010 – License Plan B (skate hardgoods), Becker Surf retail, bid for
West 49 retail, RVCA
