Backing for surf retailer

SURFSTITCH customers and suppliers have thrown their support behind the beleaguered Gold Coast retailer following its move into voluntary administration last month.

Administrator John Park, of FTI Consulting, who was appointed along with Quentin Olde and Joseph Hansell, spoke yesterday following a creditors’ meeting at the company’s Burleigh Heads base.

It was attended by a handful of employees, service providers and suppliers, but not SurfStitch’s co-founders, Justin Cameron and Lex Pedersen.

Mr Park said publicity surrounding the administration had not led to clients and suppliers deserting the company.

“We were very cognisant of the impact on the business of the publicity but we have seen to date that there has been ongoing support from customers and suppliers,” he said.

“My view is that you will always have a few hiccups along the way but we have been quite pleased with how things have played out.”

The administrators were called in by SurfStitch directors last month to the group’s non-operating companies, including SurfStitch Group Ltd and SurfStitch Holdings Pty Ltd. The move left the trading companies, which run the SurfStitch, SurfDome and Swell websites, free to operate as normal, and at the same time put a halt to two class action lawsuits.

Two class actions were launched this year, seeking $100 million and $500 million in damages, from shareholders who saw the value of their shares plummet in the wake of profit downgrades.

Mr Park said they have had discussions with the legal firms involved, Gadens and Quinn Emanuel Urquhart & Sullivan. “Both have indicated they are receptive to look at any restructuring proposals that take account of their interests,” he said.

“I would say they are looking for a palatable commercial outcome.”

Mr Park said they have received one proposal to date on restructuring the company but declined to identify the party.

He expected more proposals to come and said in many cases a restructured company ended up being relisted.

“It is quite common when you are dealing with a restructured vehicle that part of the terms would see relisting.”

He said liquidation was “not the preferred outcome” as it would result in no returns to shareholders.

“If a proposal is submitted (to restructure the company) my experience is that creditors will look more favourably upon that rather than liquidation.”

Mr Park said all options remained on the table, including the sale of subsidiaries, however no decision had been made.