Billabong is finally seeing the light at the end of the tunnel. The Australian-founded company has made its way back to profitability for the first time in three years, following a turnaround strategy implemented in December 2013.
Ragtrader reports that Billabong International Limited, which owns brands Billabong, RVCA, Element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf, Xcel, Sector 9 and Tigerlilly, made a profit of $25.7 million for the six months to December 31, 2014. This is in comparison to a loss of $126.3 million in the same period the year earlier.
Sales were up 9.5% in the US, which is the group’s biggest market, but sales in the Asia Pacific region were down 4.5% partly because of a weak Christmas trading period. Neil Fiske, Billabong’s CEO, said, “It’s encouraging to see the group return to profitability,” but it now needs to see “universal progress”.
“Where our effort is being concentrated we are seeing positive signs of brand growth and improved margins,” Fiske said. “However, as expected in what is a complex global turnaround, there is not yet universal progress across our operations and these results are impacted by changes to our portfolio.”
There is a plan, though. Business Insider reports that an omni-platform plan will roll out in Australia mid-2016, which is excepted to drive two to three times the amount of sales from retail of e-commerce-only customers.
“Having recently regained 100% ownership of our branded ecommerce sites in Australia and Europe, we are now able to include these important assets in our omni platform plans,” Fiske explained. “We will accelerate the transformation of our retail fleet in Asia-Pacific from a brick and mortar operation onto a true omni-channel model that allows customers to seamlessly shop across all channels,” he said.
Sydney Morning Herald also reports that Fiske hopes to strengthen sales and profit growth by investing in Billabong’s three biggest brands, Billabong, RVCA and Element, and make changes to the business by reducing product numbers and improving its supply chain by moving to fewer, bigger suppliers.