Germany embraces Billabong

Written on the 9 September 2009

BILLABONG will surf a wave of popularity for its surfing apparel in Germany, where it is expected that 25 per cent of all European sales will be generated in the next 12 months.

Despite performance deteriorating internationally in the wake of the downturn, it is Europe where the brand has barrelled over consumers.

A recent rapid appreciation in the Australian dollar exchange rate against the US dollar and Euro, had reduced its operating profit from an expected $163.1 million. But Europe remained a standout performer, with reported sales lifting 23.4 per cent to $388 million.

Sales in Australasia equated to $444.3 million – up 7.6 per cent.

While its chief market in the Americas was sucker punched by the credit crunch — leading to a 13 per cent decrease in NPAT profit of $152.8 million— Billabong is holding its own in a tough retail sphere.

Billabong International CEO Derek O’Neill, spent 10 years setting up the label in France and says that preparation is now reaping dividends.

“It’s been an absolute grind but ours (Billabong) will stack up against any other in these times,” says O’Neill.

“Given the lack of retailer confidence, the steep slowdown in consumer confidence spending in various global economies and the extreme volatility in exchange rates, the company has emerged in good shape.”

O’Neill says the brand’s universal appeal will help it to track steady growth over the next 12 months with NPPAT of five per cent forecast.

“We are a lifestyle brand and it doesn’t matter where you are in the world. As soon as summer hits in Germany, the people are out swimming and enjoying the outdoors. Now they are doing it while wearing the Billabong brand,” he says.


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