Global surfwear retail giant Billabong has finally moved into the online world with another acquisition, buying niche California-based boardsports website Swell.com.
While the acquisition is the company’s first venture into online retail, it is just the latest in a string of purchases designed to expand its reach in the US.
Billabong has signed a conditional contract to buy Swell, according to a statement submitted to the ASX, but financial details have not been released. Paul Naude, president of Billabong USA, said in a statement the purchase will complement the company’s current offerings.
“We look forward to growing the Swell business and further developing it as a showcase online platform for the US boardsports industry,” he said.
“The internet plays a significant role in the recreational habits of the youth market so it is important for our group to ensure we provide them with a premium brand experience when shopping online.”
Company secretary Maria Manning said in a statement the purchase price is not material.
“The purchase price is not material and is subject to a confidentiality agreement. Swell is expected to contribute less than 1% of group revenue and be slightly earnings per share positive in its first full year in the Billabong Group.”
Swell was founded in 1999 by Jeffrey Berg and Nicholas Nathanson, two executives from the financial services industry. It describes itself as a website “run by surfers, skateboarders and snowboarders for surfers, skateboarders and snowboarders”.
The company went through troubled times during the dotcom crash, moving through a number of different business models. After an alliance with a surfing magazine failed to stabilise the company’s revenue, it marketed itself as an online catalogue fashion retailer in late 2001.
The company will mark Billabong’s first move into selling directly online. Despite a number of acquisitions over the past five years, including sunglasses and snow goggle manufacturer Von Zipper and wetsuit market Xcel, it has not acquired an online retailer.
The purchase will allow the company to take advantage of higher margins available through online retail.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
