Billabong International Limited today announced it has purchased the Honolua Surf Company apparel brand and its 19-store retail network.
Derek O’Neill, Chief Executive of Billabong International, says the Honolua Surf Company is an emerging brand with significant potential. “This is an attractive acquisition for us because it slots so readily into our existing base of skills and experience, says Mr O’Neill.
“The brand fits neatly within the surf-based lifestyle culture of Billabong and we anticipate the bulk of its market will come from the 25 to 45 age group. It is complementary to the core Billabong brand and brings opportunities for a tightly focused approach to a much broader demographic spread of customers. We also see important opportunities to further expand Honolua Surf Company sales through our existing international distribution network.
The purchase includes Honolua Surf Company’s existing retail operation comprising 17 stores in Hawaii and two in Las Vegas. The stores provide a multi-branded offering, deriving about 60 percent of their sales from Honolua Surf Company-branded apparel, with Billabong being the largest supplier of the other established surf brands.
“The stores are performing well and operating on good margins and Billabong, as a supplier, has had a long established relationship with the founders, says Mr O’Neill.
The founders, Tom Knapp and Randy Blumer, are experienced in the surfwear industry and will continue to be involved in the business in the future. President Tom Knapp brings extensive experience to the Billabong team, having run Honolua Surf Company since 1995. Mr Knapp also founded both Club Sportswear and True Textiles and is a former president of the Surf Industry Manufacturers Association. Randy Blumer was a former Vice-President of Merchandising and Operations at progressive US retailer Pacific Sunwear and was also an owner of Pro-Lite International.
“We are excited about joining the Billabong team and see tremendous potential for Honolua Surf Company as part of this organization, says Mr Knapp.
Billabong’s Mr O’Neill says the acquisition does not signal a fundamental change in Billabong’s approach to retailing. “We will continue to be selective but the experience of both Knapp and Blumer will be a great asset to the international operations of Billabong going forward, says Mr O’Neill.
Billabong expects the acquisition to be earnings per share positive from day one.
Honolua Surf Company’s apparel range includes men’s, women’s and children’s wear embracing the laidback surf culture of Hawaii.