Billabong International’ verticalization process goes on with the surfwear company signing an agreement to buy 38 stores in Australia, including the Surf Dive ‘n’ Ski (SDS) and Jetty Surf retail banners, from General Pants for an undisclosed sum.
The deal includes their internet business and two licensed Billabong stores. It is seen as key to strengthening Billabong’s retail business in Australasia, a region that already delivers the group’s strongest retail margins.
The group intends to keep both banners as multi-branded retailers. The acquisition is expected to generate significant synergies in areas such as warehousing, distribution, back-office support and overall retail management consolidation.Scheduled to be completed on Nov. 1, the new acquisition will bolster the Billabong group’s retail network to 558 doors. The newly acquired business is expected to contribute approximately 3 percent to the Billabong group’s revenues in the 2010-11 financial year ending next June.
The deal follows several other recent acquisitions by Billabong at the retail level including the U.S.-based online boardsports retailer swell.com, a stake in Australia’s leading online boardsports retailer Surfstitch, the 36-door Rush Surf retail chain in Australia and, most significantly, West 49, which operates 138 retail stores in Canada.
