Yesterday was not a good day for the Billabong guys. The share price has hit .90c – below the level most analysts expected. If you believe the Sydney Morning Herald, Gordon Merchant is in hiding over at Jefferys Bay, Chairman Ted Kunkel is on the way out and Laura Inman may end up being one of the shortest serving CEO’s of all time. I’m guessing that morale isn’t too great at the Gold Coast headquarters either – this could leave the few good people left in the ranks searching for something new, and fast.
But, I think this can definitely be turned around. As the article also says, they have a strong suite of brands, but a bad strategy and maybe a few management issues. Plus, I’m the guy who said we should all be buying Quiksilver at 0.89c … It was the one time I was right and I’m hanging onto it.
So what needs to happen from here? Get out of physical retail, reconnect with the core retailers and help them adapt to the new online world in a way that puts them in touch with both their local fans and the wider community out in the world. That might mean building sites that utilize the technology behind Surfstitch perhaps?
Combine the brand marketing teams and spends into a central point and leverage that total value for better media buys – might be only saving pocket change but the other side is that the freebies that come with big spends will extend the brands reach. That’s free additional advertising and PR for doing what you are already doing. While you’re at it, nail down the core competencies of each brand and market them too – Billabong shouldn’t have a skate team, let Element be that outlet. RVCA can cover free surfing and Billabong can be the big competitions. Footwear shouldn’t be done by anyone but core footwear makers… No one wants to wear Element shoes, sorry. Get out of there. And be ready to invest in the team, in a big way. Sponsorships, videos, capsule collections, custom rider focused ads.
People started buying these brands because the ‘core’ thought they were cool and they brought that message to the mainstream. When you lose your core focus, you will eventually lose the mainstream too. Then you have a second quarter with dismal sales and do a capital raising at $1.09 and all of a sudden, some idiot with a blog is telling you how to run your (former) billion dollar company by instituting a set of impossible initiatives and making it sound like they’re obvious. It’s a sad state to get to.
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