MUM BARRELS BILLABONG
A YOUNG Sydney mother dropped in on the Billabong annual general meeting on the Gold Coast yesterday, demanding bosses tell her how they are going to look after her money.
Mia Jay fronted executives on Billabong’s plan to engage its 36 million followers on social media.
Four years into the company’s turnaround strategy, shareholders heard Billabong had posted a $77.1 million net loss.
IF the Gold Coast’s iconic surf brand Billabong wants to paddle from the rocks to the rising swell, it will have to win over people like shareholder Mia Jay – and she was quick to tell the company so at yesterday’s annual general meeting.
Four years into the company’s turnaround strategy, shareholders heard it had posted a $77.1 million net loss despite growth in both the American and European markets.
CEO Neil Fiske said the company hit headwinds with increased product costs due to currency changes and a shift in the retail landscape. “By no means are we satisfied with our results,” he told the meeting.
“But I want to be clear: the fundamental changes we sought are taking hold and showing improvements in the core of the business.”
Ms Jay brought her young family from Sydney to the Gold Coast for her first AGM since buying shares in the company at around 50 cents each because she is “passionate about Billabong”.
She asked for a breakdown on the company’s touted 36 million social media following, given she could see fewer than six million followers between Facebook and Instagram, and wanted to know why there were relatively few likes and comments on Billabong posts.
“What’s the strategic plan for social marketing to improve that engagement?” she said.
Ms Jay had hit upon what Mr Fiske calls the company’s “secret sauce”, a strategy of data-gathering so it can better target customers with products they’re likely to actually buy.
The company’s 36 million followers are attached to its three core brands – Billabong, Element and RVCA – as well as their paid athletes and influencers.
It hopes to use this reach to grow its direct market driving enhanced online sales – it launched Surf Dive N Ski website as a global e-commerce platform last week.
“We’re really just getting started tapping into that potential,” Mr Fiske said after the AGM.
“We have the tools there to listen, we can identify them, we can see what their interest and affinity is with the brand.
“We have a third-party database marketing firm that we work very closely with and it’s kind of our secret sauce. As long as we control the connection to our customer, we have control over our future.”
Ballina-based shareholder Adene Patton has been waiting for a decent set since she shelled out $7.50 a share in the heady days before 2013, when the sandbank collapsed and dragged the price below the mud to 13 cents.
She was among the shareholders who quizzed the board on speculation Billabong was looking to buy a competitor like Rip Curl or SurfStitch. She left without a definitive answer.
“Our responsibility is to consider every opportunity that may generate value for shareholders,” replied chairman Ian Pollard.
“We don’t rule things in or out.”
Shares were trading up after the AGM yesterday, finishing at $0.74 after closing at $0.61 cents on Monday.
THE group behind Katies, Millers and Rivers will close hundreds of stores as another traditional fixture of the nation’s retail scene falls on hard times.
Speciality Fashion Group, whose stable of brands also includes City Chic, Crossroads and Autograph, has announced plans to close more than 300 stores as international competition, online shopping and subdued consumer spending take their toll.
Chairwoman Anne McDonald said the loss-making retail group would reduce its network from 1019 to 700 stores – shutting close to onein-every three – sometime in 2020.
The bulk of the closures will occur next year, Ms McDonald told the group’s general meeting yesterday.
Speciality Fashion, which was also hit a massive first strike against its remuneration report yesterday, did not provide further details around which stores would close or how many employees would be affected.
The group employs 5000 people and has closed 76 stores in the past three years.
Ms McDonald said the group was taking action to confront “subdued consumer confidence impacting discretionary expenditure and increasing competition, both from international and online retailers”.
“Store rationalisation is a key and immediate focus,” she said. “Whilst we have made some progress in optimising the store portfolio, we are taking actions to more quickly reduce our store footprint.”
Losses at Speciality Fashion blew out to $8.39 million during the year to June as it was hit with major writedowns on its decision to close its fleet of City Chic stores in the US.
The loss was more than triple the $2.19 million dive into the red the specialty women’s fashion retailer posted during the 2016 financial year.
Shares in the group – which was being eyed for takeover by an investment company controlled by the Qatari royal family earlier in the year – have more than halved over the past year.
In October it warned investors its underlying earnings were expected to halve during the 2018 financial year. Chief executive Gary Perlstein last week announced he was stepping down after 14 years.
Yesterday, he said while the group had made strong progress on a number of operational issues there was no escaping the fact that trading conditions had been challenging.
“The group is striving to be agile in navigating these conditions and is accelerating our change program,” he told shareholders.
Close to 52 per cent of shareholders voted against Specialty Fashion’s remuneration report, easily clearing the 25 per cent hurdle needed to deliver a first strike.
If shareholders reject the remuneration report next year – delivering a second strike – they can then vote to spill the board. Shares in Specialty Fashion shed 2.5 per cent to yesterday close at an all-time low of 19.5¢.