SURFSTITCH SELLS OFF TWO CONTENT SITES AS ITS DISMANTLING CONTINUES
Written on the 20 September 2017 by David Simmons
THE dismemberment of the failed online retailer SurfStitch (ASX: SRF) continues with the sale of two of its international content sites.
SurfStitch's administrators announced the sale of the business and the assets of Magicseaweed and Metcentral to US company Surfline Wavetrack for an undisclosed sum.
According to the administrators, FTI Consulting, the process to sell the two businesses commenced months before the appointment of the administrators.
Surfline is a US-based provider of surf content, reports and forecasts, live streaming cameras and wave prediction models.
Quentin Olde, from FTI Consulting, says the sale is positive news for the employees of Magicseaweed and Metcentral.
"The transaction ensures the continuity of the businesses and is a good outcome for the Magicseaweed business and its employees," says Olde.
Surfline will pay cash consideration for the companies on completion of the transaction.
SurfStitch first made its leap into the online content world by purchasing the two sites shortly after listing on the ASX. Its ability to get traction in the content sector was boosted by a string of capital raisings which saw it spend more than $50 million on acquisitions.
Last week FTI sold Rollingyouth, the owner of Stab Magazine, back to its co-founders for a small amount of cash. Initially SurfStitch splurged $6 million on purchasing the magazine publisher in 2015.
SurfStich entered into voluntary administration in late August this year after the impact of a series of legal battles took their toll on the online retailer and ASX listed company.
The company was reluctant to enlist administrators FTI Consulting, considering it is still defending two class action lawsuits brought by SurfStitch shareholders.
SurfStitch entered the ASX as a market favourite in 2014, however it has since suffered a spectacular fall from grace which has wiped almost 93 per cent off its total market value.
The company downgraded its earnings three times, largely because of a dispute with surf technology group Coastalwatch and Crown Financial over the licencing deals which fell through, and this wiped around $20 million off revenues.
Earlier this week, SurfStitch co-founder Lex Pedersen announced a new venture with two former directors of the failed retailer.
With Martin Corr, former global marketing director, and Clover Chambers, former director of business integration, the team will launch an e-commerce consultancy called PeriscoPe.
With offices in Queensland and Sydney, the company will cater to businesses across the Asia-Pacific region.
The team bills itself as a one-stop-shop for every element of e-commerce.
Business News Australia
Author: David Simmons