April 8, 2013

Billabong, Where To From Here?

Billabong has entered exclusive negotiation with Paul Naude and, all going well, he is likely to begin the unenviable task of trying to return the business to the powerhouse it once was. I thought it might be interesting to think about where we see it going. As it will be privately held, the information about what they’re doing is likely to be minimal from here on, so working from the information we have about the business, and our knowledge of things on the ground, here’s a few thoughts.
If you have thoughts on this, add them in the comments.

The first thing would be that we will see them get rid of the non-core brands. Who would that be? My guess would be Kustom, Tigerlilly, Dakine, VonZipper, Sector 9 … winding up their distribution deals with brands like Plan B, and selling their remaining share in Nixon. I can’t see them selling Element. Not because it’s an exceptional brand or anything but it does hold quite a dominant position and could be reworked to improve (and skateboarding on is on the up again).

On the retail front, you gotta think they’ll be looking for a way out, fast. Either through closures or sales, their time on the shopfloor has finished for a while. But their time retailing has really just begun – leveraging their investment in Surfstitch is likely to see them make a big push in online sales. Quiksilver has tried this – their entire brand sites are retail portals. As to how successful they will be, remains to be seen. Would I buy through a branded online store? Not unless it was something especially unique. Something I couldn’t get elsewhere. And Billabong don’t do those sort of products.

The teams. While it would previously have been safe to say that the teams wouldn’t change that much, I think Quiksilver may have started something and we could see a lot of good people looking for new sponsors. Some Billabong team members have already voiced concern that things aren’t looking good. I would suggest we will see a renewed focus on the surf team at the expense of the rest of the sports… That means we can say goodbye to skate, snow, wake, bodyboarding, rollerblading, scootering, weightlifting and competitive curling (I’m just assuming that they’re in all those sports) athletes. If I were on the surf team and not on a current magazine cover, I’d be nervous too.

Branding and marketing. There’s been moments of brilliance, very brief moments. But overall there hasn’t been anything outstanding. Remember the Quiksilver pop-corn clip? How about the billboards that were just a rail on white and the Quik logo? Things like that resonate well and attract the kind of attention the brands want… And Billabong needs. I’d assume there might be some big changes coming here – either some external creativity or a real push to do some new things.

On the events front, that will be dictated by their decisions on brands and sports but I would say that they will scale back in a big way. We’re already starting to see it. If you run a contest with Billabong signage around it, I’d be working the phones.

Leadership – this is the big one. Will Laura Inman get to stay on? My guess is that she won’t. Paul Naude should take the lead on this and make it his own. Inman’s has indicated that she would be lead by focus groups and looking for mass market items – no bad thing for other brands but if you exist in this space, that kind of approach won’t wash. The big sellers are the ones that set a trend, not follow someone else’s. I don’t know if Naude has the creative skill to do this but I’m guessing he can get the right people in to help.

So, last prediction, is the buyout a good thing for Billabong? If you’re an employee there, a team rider or someone dependent on their marketing dollars, probably not. I’d say there will be a lot of pain on the way. For the industry? I think this might be the best outcome. It will provide a future for the brand and I’d be surprised if Naude didn’t turn this around and make Billabong relevant again.

I think/hope the low point is over.

by POP Magazine