Billabong has hit profit and CEO Neil Fiske is talking about the next phase of his turn around plans. According to his statements, the focus has been on the simple and easy gains (low hanging fruit) that could be enacted to stabilise the business.
Now they’re into structural reforms like their inventory and sales tracking, which will shift to a real-time platform, and an omni-channel sales platform allowing them to track purchasing behaviour both online and instore. Both worthy of investing in and it will cost the business around AU$40 million a year in capital expenditure over the next couple of years to implement them.
In addition, store closures will continue and all remaining retailers in Australia will be rebranded Surf, Dive ‘n Ski to maximise branding and generate customer loyalty. I’m not sure if this includes the brand stores like Element, but I assume it does.
It was a bumpy week in the press leading up to the results announcement – an interview in Boardsport Source with Billabong European General Manager, Jean-Louis Rodrigues, mentioned some impressive figures which were taken by some to mean an outstanding return to profit (rather than the modest first half profit of AU$25.7 million). The company had to issue a statement letting the markets know that the his comments were not broad ranging and applied only to a small part of the business.
So, the news is good and the plan sounds great. Should be an interesting next half for the brand. The shares are currently sitting at 0.61c.