Billabong’s recent annual report has been out for a while now, but Jeff Harbaugh’s gotten back to it in his most recent Market Watch column. In it he covers what currency fluctuations can mean to global businesses, why new accounting rules make profit comparisons difficult, the China crisis, and Billabong’s retail strategy.
In talking about Billabong’s motivations for retail, they note how they’ve seen an increase in house brands by retailers in recent years, and how that ends up “…eroding the amount of space that’s available for premium brands…” and usually not working for the retailer. Though they don’t come right out and name it, I think they were thinking about PacSun, where their sales last year were down 40%. . . . There is also a general concern about the overall whole base. In Australia, they estimate their account base has declined 5% in the last 12 to 15 months. In addition, they have “quite a few” on credit hold and “may not continue selling to those accounts.”
Reading Jeff’s columns is a lot like having a favorite uncle go over the numbers with you. Click it and you’ll see.
[Link: Jeff Harbaugh’s Market Watch]
I,m not such a fan of billabongs take over everything program. It has made me want to scale back on all their brands. Just like I did with burton. There are plenty of companies out there who aren’t trying to compete with there retailers
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