Founder Justin Cameron says company's future is "very unpredictable."
Do you long for glory days? I don’t.
If it ain’t around the corner, it means life is on a downward slope, ending in the grave etc? Hence the danger of nostalgia.
One exception to the nostalgia-is-death rule must be granted to the online surf retailer SurfStitch. Oh, it was on such a high eighteen months ago. Worth almost half-a-billion dollars. Tens of millions of dollars shovelled into acquisitions.
Life was a dream. But so fragile!
Last week, SurfStitch went into a voluntary trading halt in response to a $100 million lawsuit from shareholders who say the company was a little florid in its profit expectations. One old man paid $2.12 a share only to see ’em worth six cents. And even if he wanted to cash out he couldn’t. The shares are in a trading halt, one that might last until August.
And in today’s Australian Financial Review the company’s co-founder Justin Cameron, a tough, alert and fiercely intelligent biz-man who quit SurfStitch last year to organise a private equity takeover of the company, said its future is “very unpredictable, who knows if it will trade again… Significant time and money appears to be focused on litigation as opposed to managing the business.”
As for SurfStitch,
The company said it would explore a way to settle the legal claim “at a level that would permit the company’s continued financial viability.”
A few moments ago the company and its assets had a market valuation of $18.9 million.
Wait… I can get a million shares for $60.00? Does SurfStitch have a G5??
I remember bitching about the price of a new board and the salesman telling me he’d only make $50 on it. He said they sell the boards for street-cred, which helps them sell sandals and bikinis, their real money maker. Tough running a surf shop with those economics.
i have. there’s a shit markup on everything you actually need to go surfing. tees, sunglasses, thongs and hats keep the lights on.
For some reason I’m really excited by the fall of the FCS brand.
Because Futures were the better fin for over a decade?
Schadenfreude, Mariano. Schadenfreude!
But yeah, Futures are waaaaay better and always have been, of course.
This may sound like a bullshit question, but I am not being facetious. Has anyone ever made a profit with surf-related companies? I know original investors make money when they sell to a larger company (Hurley, Nike), but it seems that afterwards it is a losing proposition. If this is true, why the do companies invest? Is it to seem “cool”? Has any company turned the investment into a reliable profit?
Fuck yeah , all the baby boomers /Co founders , and some Gen X’s who were the chosen ones from the BB’s, all very rich and retired , except a few who thought they were genius’s and went and invested in dodgy Co’s like SS. So its not a bullshit question , very real and so far no Surf Co that has gone public , has been a long term success , and as surfing is in a downward spiral , the Gen Y’s and milleniums have inherited and industry that has been raped and pillaged and in essence they habe been left empty shells of what were once ….profit centers for the hierarchy , fuck I am sounding like a red under your bed!
Amazing. Why the hell does anyone buy these companies then? Sounds like a Ponzi scheme based on coolness. What roles do drugs and sex play in their purchase?
it’s not as intentional as a Ponzi scheme , just ego’s running rampant , and a self belief that they are genius’s , but it’s being in the right place at the right time , so then ego takes over goes for the short term gain and the next generation is left with a basket case , as is the surf industry now!
The three big originals, Rip Curl, Quiksilver and Billabong pretty much ran a cartel and bullied shop owners from stocking any smaller upstarts/startups from having a presence in stores. The script went sorta like, “Great to see you’re stocking BRAND X, however, we’re a core company and we think our brand is damaged by having our product alongside theirs”. The insinuation being, “Get that fucking shit off the hanger or we’re pulling all our stock”. Took a friend 15 years to get a major brand to re-supply him with rubber after he stocked a cheaper “non core” brand to sell to the not so well off local kids. Much easier to be a small start up today. But much harder to maintain sales and profits grossly inflated by stand over tactics during the 70s, 80s and 90s.
yeah that’s one of the reasons , trying in fact to monopolize , shops with major brands , especially in the USA where the major Co’s still do sale or return which is a form of consignment sales.
The real damage was done in creating growth , and branding anything that would make a $ and increase turn over , which alienated the surf culture from the Brands , and non surfers became their biggest market , because surfing was a rebel port culture , and sorta cool.
Now surfing has been sterilized , the counter / rebel culture appeal is dead , and so that’s why sales are falling , and the BIG T/O Co’s are being consigned to the super markets and only the much smaller Co’s ( under $10 m) have any credence in the current Surf market place , same for surfboards , Custom makers are booming big brands are groveling!
Spot on Brutus. As soon as surfers became socially accepted members of society, the end of the profiteering was nigh. Why do you think Dane, Ando et al are all faux rock stars? Because there’s margin in cool. I was proud to wear my pink and black polka dot Billabong corduroys back in the mid 80s cause it freaked out my family. When my friend’s Dads started wearing them, I tore them up into strips to clean the grease off my BMX chain and started wearing Levis. Still do.
good money was made up to and at the flip in ownership but the real money was made by the suits at the flip in ownership, easy money ,no briefcases ,no need to throw the brief cases off their yachts into Sydney harbor, nice and wall street style ,the losers were the greedy and the mum and dad (former customers)
I’m feeling a little guilty that I never bought any of their Surfshit. Oh well, from the ashes…
When are you going to let your loyal readers invest in Necro? Stop holding out on us man!
Jeez I wonder who will be in line to pick up the bits and pieces.
I’m pretty sure that’s Sam McIntosh and Travis Ferre…
Surfstitch-up?