The Courier-Mail says Billabong got hit with a “wave of excess boardshorts” and that has caused the company’s annual profits to drop for the first time ever (13.3 percent).
Chief executive officer Derek O’Neill (pictured right) said retailers worldwide were cautious and curbing their forward orders. But he ruled out deep discounting. . . “Late last year we couldn’t unwind our costs fast enough,” Mr O’Neill said. “We were left with a lot of inventory after we saw a rapid slowdown in sales, especially in the US and our wholesale customers were holding back deliveries. . . “Our model was excellent for a long time and we got a bit of a slap but our brand is still strong. . . “Ultimately we need to work with the retailers to get the best product, but they need to give us the indication of what they want and when they want it otherwise it’ll be like a lucky dip with product shortages. . . “Everyone says they are buying less product so I hope the dice comes up how they want it but it’ll come back, I just don’t know how long it’ll be.”
The company still made a profit of AUS$153 million.
[Link: The Courier-Mail]
