Renowned surf brand Quiksilver has filed for bankruptcy in the US, according to reports. Despite the company being profitable in the Asia Pacific where countries like Australia and New Zealand are immersed in surf culture, its US profits have dragged the company down. This reflects a growing trend worldwide of surf brands, such as its competitor Billabong, struggling to break even.
The Australian has reported Quiksilver has filed for bankruptcy in the US.
This comes after the company made a loss of NZ$484 million last year, with sales falling 13 percent.
It is reportedly getting ready for a restructuring.
A private equity firm called Oaktree Capital will provide Quiksilver with US$175 million in financial assistance and take control of the company.
Oaktree is also the majority shareholder in Billabong International, Quiksilver’s competitor.
The firm has a shared 38 percent stake in Billabong and gave it a NZ$424 million helping hand in 2013 to help rescue the company when it was in a crisis.
A member of Billabong’s board, Matthew Wilson, resigned overnight from Oaktree due to “a potential conflict in Oaktree’s investment portfolio”.
However, some are speculating that Oaktree’s interest in the two companies might mean a merger later down the track.
Using the New Zealand site’s store locator, The Register found Quiksilver has five Quiksilver branded stores in the country – three in Auckland, one in Christchurch and one in Queenstown.
It also has various outlets, such as North Beach surf and skate stores, stocking its clothing around New Zealand.
According to reports, bankruptcy is being filed in California, where the company is based.
Dismal US profits have brought the company to bankruptcy.
It’s understood the European, Australian and New Zealand arms of the company are profitable and aren’t included in the bankruptcy.
A Quiksilver manager told Stuff they hadn’t heard of problems in New Zealand or Australia and thought the two regions were some of Quiksilver’s most profitable.
Alan Green and John Law originally founded the company in Australia in 1969 in a little surf town in Victoria called Torquay.
The brand became famous for its invention of boardshorts – swimming shorts with a Velcro closure that ensured they stayed on the wearer.
The shorts were seen on both surfers and beach goers in Australia over many generations.
Quiksilver also released a line of wetsuits that could be worn as suits earlier this year. The stunt garnered the company headlines around the world.
While surf fashion was once a booming industry, it has toppled in popularity in recent years.
Brands such as Billabong and Quiksilver are now operating in an increasingly competitive market.
Its target youth demographic are choosing trendy fast-fashion retailers like H&M or Glassons over surf brands.
Billabong made a NZ$258 million net loss for 2013/14. The previous year it was even worse, at NZ$947 million.
In Quiksilver’s second quarter financial results for the year ending April 30, its Americas’ revenues were down US$6 million to $160 million (4 percent decrease).
In contrast, its Asia Pacific revenues were up $4 million to US$56 million (7 percent increase).
When it was performing at its best, Quiksilver had a market capitalisation of US$2.3 billion.
Now, its market capitalisation sits at US$300 million.
Quiksilver also owns women’s surf brand Roxy and DC brands.