Is Kelly Slater surfing's sharpest biz-man?
Money sure do make the world spin. Grab a little of that cheese and hang on for the ride. Oowee!
Now guess who’s gonna step in and ride the FCS rodeo? According to one respected biz newspaper, it’s gonna be Firewire Surfboards, owned by… yeah… Kelly Slater.
You know the recent fortunes of Surf Hardware International (FCS is it’s primary biz) ’cause we covered the sale and the resale in terrific detail.
SHI had been in a helluva state prior to sale. Between 2012 and 2014 it had lost over eight mill pre-tax, was being sued by one of its co-founders and directors warned it was close to pulling down the shutters.
So after paying out the final legal costs of the suit in 2015, the owners, Macquarie and Crescent Capital, put the company up for sale.
In stepped SurfStitch, paying $24.3 mill, almost eight times SHI’s forecast earnings and more than double what the Macquarie and Crescent Capital paid in 2003.
According to Australia’s Financial Review.
The sale price stunned the close-knit Avalon surfing community. “Everyone was shocked they paid close to 10 times [historic] earnings,” said one source.
Of course, maybe it wasn’t the sharpest deal for SurfStitch. As the Fin Review reports:
Less than seven months after the deal SurfStitch’s new board and management, led by veteran retailers Sam Weiss and Mike Sonand, came to the same conclusion as bemused Avalon locals – the online retailer had paid too much.
SurfStitch slashed the value of SHI by $6.5 million, including $5.3 million of goodwill impairments, and put the company up for sale, saying it was no longer core to the group’s strategy.
Now, says the newspaper,
SurfStitch is expected to announce a deal as early as this week, possibly with US surfboard maker Firewire.
And the price?
SurfStitch shareholders fear SHI could fetch as little as $12 million, leading to further losses. SurfStitch declined to comment.
It ain’t a secret that Kelly’s ain’t exactly loose with his cash but buying a company at half the price of its sale last year?
If Kelly has the boards, the fins, and the waves…
Does Kelly Slater…own…surfing?
Commented on Disqus? Log out, tap the Disqus button, and your old name and comments come back. The box is ours.
Your comments are still here. Every one of them.
Twelve years of BeachGrit comments came across from Disqus. Connect and we will show you how many are yours. We get your username, nothing else.
Connect Disqus to reveal.
or not Kelly/Firewire , another investment Co!
But the pioneers (FCS) ain’t near historic earnings now or ever will be again. The patent lapsed and the market is flooded.
3x earnings and all Firewire boards are mandatory FCS, then we are talking…
I’m no mathwiz but I think $12M is equal to about 4 sets of fcs fins (3 if you ride quads)
First order of business, make an affordable range of fins instead of expensive, and stupidly expensive.
yeah right, next thing you’ll suggest is them selling single fins when your trailer falls out cause you bumped it from the back.
https://uploads.disquscdn.c…
Good shout!
And they could go and make a triple-double or triple-single my life would be complete!
I can’t find their reverse series either!
Since this is a snooze story I wanted to point out the obvious. The obvious being this Dork Seas ad flanking your page. One side is a dude with some shit hanging out of his lame mouth and the other side he’s in a hipster costume holding a fish for the first time in his life. Can you get a new ad please?
its so much better than the fuckface we had sitting there with a foot of the nose of his JS broke off though
Oh, so the Syrian Surfer is going to buy it at close to 5 times [historic] earnings??
Stupes.
Surprised that nobody talks about other finsystems like Probox Finsystem that is completely USA made “Fins and Boxes” that was created in 2002 .
for the same reason we don’t talk about OFishL fins
Funny what do you think Futures are. OFishl’s with California Finsystem makes Futures alot of thought behind that.
well, nobody is talking about any of them, or Fins Unlimited or UL or True Ames, but they’re out there
Well Kelly should be aware SHI have failed to successfully register their claimed patent over the FCS II system. So SHI don’t own any valuable IP. They just have the expertise to produce the plugs (not worthless but not as valuable as the ability to charge royalties for third party compatible fins, or to be the monopolist). Captain Fin Co, Shapers and others will are going to start making FCS II fins so it will just be a plugs business. At least you won’t have to pay $50 extra for FCS II in your next Firewire or KSD. You could also just stick to Futures which we all know are better…
Kelly seems to be going through a fairly rapid acquisition phase, paying too much for questionable assets. Similar in many ways to SurfStich. And we know how that ends.
Landlord/sharing economy: own everything and make everyone else renters.
Kelly Slater as surfing’s first Grand Slumlord.
Futures all the way.
surfboards, fins, waves and…outerknown, purps, etc. Out of interest has anyone ridden one of his boards? Love, hate? I’m just asking for a friend.
Anyone know if clay dropped super for mayhem
Isn’t he a part owner?
You forgot he owns WSL too.
The upside is the WSL commentators can drone on about how good the fins look instead of just how Stu’s board looked 3 heats prior.
Ain’n nuthin’ that cures insomnia better
questions on whether they have a patent for FCSII , looks like they don’t , so what is the value of the Co , without any patent protection?
Surfers are sick of losing FCSII fins , and the swing back to Futures , especially in the USA , is continuing to erode FCS sales , or as the Seppos call FCS , Fucking Chinese Systems VS Made in the USA Futures.
With Kelly making his Firewire/Slater design boards in Asia , and FCS made in Asia ,its a perfect match , but will he do consignment on FCSII , like Firewire , so he can try and crush the competition ?
Once you go Asian that’s all you’ll be cravin’
It’s still too expensive.
Even for Avalon standards…
Yes I mean honestly! You could buy two properties in Marine Parade and have enough left over for a black Range Rover, two SUPs and a fake friendship with a 60 year old North Av local.
Don’t forget the holiday house in byron.
never get between an av cat and his/her holiday house in Byron
And a villa complete with enslaved natives in Canggu.
Those are good. Fuck the natives.
Some of us already do!
Oh great, now we’re gonna be on The King’s shitlist, what with all of pro-Futures zeal on The Grit. I welcome the challenge!
Fuck. 8x is hard to get in Silicon Valley these days and that’s for hyper growth, early stage companies, let alone a slow growing hard goods company in a niche market that it doesn’t even dominate. That’s kind of amazing.
“amazing” is being awful diplomatic about it.
so its Deloitte that works out how its good strategy to pay 8x earnings for a company with expiring IP rights? SurfStitch apparently has a board of directors? must be a low bar for admittance.