Billabong Expects To Do 40-Million Dollars In Japanese Business
(PRESS RELEASE, October 10, 2000) Billabong International Ltd. said it expects to sell about 40-million Australian dollars worth of surf wear in Japan each year when it opens a new business there in January.
The five-year plan will place the Queensland state-based retailer in line with leading surf wear sellers in Japan, like closely held Quiksilver International and California-based brand Op, said Matthew Perrin, chief executive at Billabong, in a phone interview.
[IMAGE 1]”There are clear financial benefits, (and) we can generate returns of fifteen percent to twenty percent of sales,” said Perrin. Billabong, which listed on the Australian Stock Exchange in August, has sold its products in Japan via a licensee for almost fifteen years, taking five percent of sales.
Based in Osaka and supported by a sales office in Tokyo, the Japanese business is not expected to have a major affect on earnings in the current fiscal year ending June 30, said a Billabong statement to the Australian Stock Exchange. Ietoshi Ueda, who has sold the surf wear brands of Gotcha Corp. and Op in Japan, will be general manager of Billabong Japan.
The maker and distributor of clothing for surfers, snowboarders and skateboarders generates about half its sales in the U.S. and is also looking to expand in the $1.2 billion a year U.S. surf wear market. Perrin said no new geographic expansions were planned. The company also operates in Europe.
Sales in August and September were boosted by warm weather in Australia. “We remain comfortable with our prospectus forecasts,” Perrin said. “We’re very happy with the way our business is performing.” He would not say whether the forecasts had been exceeded.
Billabong expects sales to rise 47 percent to A$33.6 million ($175.6) in the year ending June 2001. It has forecast earnings before interest and tax to grow 76 percent to A$66.7 million in fiscal 2001. FMR Corp., the owner of Fidelity Investments, acquired 5.4 percent of Billabong in August.
Billabong shares rose 3 cents, or 0.9 percent, to A$3.48. The stock has gained 11.2 percent since it listed.