SURFSTITCH SELLS STAB MAG BACK TO CO-FOUNDERS
BELEAGUERED Gold Coast sports e-tailer SurfStitch has offloaded another asset – this time selling a magazine back to its co-founders.
Digital surfing magazine Stab has sold to a company owned by Stab’s co-founders, Sam McIntosh and Tom Bird, for a “nominal cash consideration”.
SurfStitch purchased Stab, together with surf forecast website Magic Seaweed, for $13.8 million and 4.8 million in shares during an acquisition spree in mid-2015.
Then chief executive Justin Cameron said at the time that the purchase would accelerate the group’s strategy to become “the global destination for action sports and youth lifestyle content and online retail”.
However, one year later, after a second profit downgrade, SurfStitch shares plummeted in value to less than half the $1 issue price at the company’s float in late 2014. Earlier this year, before the company was placed into voluntary administration, SurfStitch said it was considering the sale of more assets to generate cashflow.
Administrators John Park, Sam McIntosh and Tom Bird, of FTI Consulting, yesterday released a statement saying negotiations to sell Stab started “several months ago” before their appointment.
They said SurfStitch and Mr Bird and Mr McIntosh’s
company, Rollingyouth Media, had agreed on a three-year deal to supply marketing, content, and advertising services to SurfStitch.
Stab was launched in Sydney in 2004 as a print style and surf magazine before launching a digital platform and becoming a social media surfing hub.
Recent asset sales by SurfStitch include extreme sport video business Garage Entertainment, which sold to the Madman Media Group in April, also for a nominal cash amount.
In December SurfStitch sold surfboard-maker Surf Hardware International for $17 million. Last week, Mr Park said he would look at selling off parts of the operational business if that delivered value and was in the interests of creditors.
The administrators are due to deliver a report on proposals to restructure the company, which could see SurfStitch shares relisting, in the next four to six weeks.