October 29, 2013

Quiksilver’s Lessons From Billabong

“Yay for shares!

There’s a poorly written article that consistently gets names wrong (excuse me Mr. Pot, what did you say?) all about the lessons Quiksilver can take from the troubled times at Billabong. The shares are trading at US$8.28 on the NYSE today, the articles author believes that based on the current progress in the turn around strategy being implemented by Andy Mooney, they should hit US$10. Fair enough. His reasoning is around the more focused business at Quik, their e-commerce abilities, lifestyle based approach that doesn’t follow trends and divestment of non-core brands.

The article is a very top level look at the moves the company has made and potentially misses some of the bigger potential issues that are out there. The one that stands out for me is that the company has lost the head space they used to occupy and that has let their core audience wander to new things. The core audience was attracted by the team and the sports, something that has suffered under the turn-around project. Without that base, the company is in a more fickle position because they can’t rely on those guaranteed sales from brand loyalists.

Still, it’s worth a read and to see if you agree/disagree… I never even knew they owned Merlin?!? C’mon trader guy, a simple Google search would have fixed that. Read it over here.

by Dave