April 21, 2015

Investment Fund CIO Backing Billabong

The Chief Investment Officer of Sydney based NAOS Investment Fund, Sebastian Evans, has backed Billabong for a comeback. There’s not much reasoning given for his confidence in the Bloomberg article, but they do talk about the cost cutting program specifically citing the move from China to Vietnam, Bangladesh and India for manufacturing. Which is great for consumers because if there’s one thing those countries are known for, it’s quality manufacturing … 

I’m struggling to see the consumer desire in this turnaround at all – even the hint that a trend in the direction of Billabong’s style was coming would help give a little more credibility to the predictions of a turnaround. But as it is, it just seems that the market is actively avoiding surf wear. I was in an absolutely packed shopping centre on a rainy Melbourne Saturday recently and the only stores without customers were the surf chains and the Quiksilver store. Quiksilver did not have a single person in there aside from the two staff members milling about the counter.

Either consumers need to shift back towards the surf styles or the brands need to find a way to appeal to consumers again. Only when there’s signs that they’ve found either of those paths will there be any reason to believe that the bottom has been hit and they’re on the comeback.

by Dave