Plus-sized gal’s label to buy SurfStitch!

Beauty (and companies) comes in all shapes and sizes!

Who knew it cost so much to go bankrupt? One of my favourite pastimes is to watch insolvent companies spend millions of dollars on administrators while creditors, employees and shareholders watch their cash switch corporate palms.

The airline Ansett, which once owned half the skies over Australia as part of a protected duopoly, was a great one – they pissed their employees’ entitlements against the wall as it wound up.

But SurfStitch, the company that famously spent eight million dollars for a website link on Coastalwatch, is a little closer to our surf shacks and they just shelled out over two million dollars to the administrator charged with sorting out its mess, FTI Consulting. That’s a hunk of change for a company that recently had to borrow four-mill to keep the lights on through Christmas.

Let me be clear. Administrators aren’t necessarily venal and wasteful. They’re thrown into some fucked-up situations and have to pull apart a web of complex biz dealings to work out what’s left over to share among the creditors. A necessary evil. But what did SurfStitch get for their two million?

The first thing to cover is that there are four groups holding pitchforks and torches. Employees are first. They want their entitlements. Creditors are second. They want their bills paid. Third in line are the shareholders. They want their shares to be worth something, anything, ideally better than the six-and-a-bit cents they were selling at when the company went into a trading halt. The final group is an angry mob of former shareholders who brought two class against against the company for misconduct (eloquently called Group Member Claimants).

The administrators job was to balance all the claims and come up with a relatively pleasing solution.

Four options were laid out.

Close the biz and pay out, close up biz and leave nothing behind, re-list on the stock market or get bought out, in this case, to accept an offer from plus-sized women’s label EziBuy (“Beauty comes in all shapes and sizes!”).

I’ll focus here on the two most likely options. Biz papers claimed that re-listing on the ASX was a real option, but seriously… the company is an absolute shit-show and, as the expression, goes: “The definition of insanity is trying the same thing over and expecting different results.”

Likely option #1: Close the biz
Employees’ entitlement’s are paid in full
Most creditors bills are paid in full
Group Members Claimants are allocated somewhere around $4.5-7.5m cash to split up
Shareholders lose everything

Sell to EziBuy
Employees paid out in full
Creditors paid out in full
Group claimants get around four million in cash to split up, plus they get a chest of shares in EziBuy
Current shareholders convert their SurfStitch shares to EziBuy shares

The catch with the EziBuy deal is that they aren’t listed on the ASX, so shareholders could be waiting up to three years before they can turn their convertible notes into anything tangible (shares and then cash). But better than ending up with nothing…. right?

But how did we end up here? How does a successful surf start-up end so badly?

Investors need growth. So the surf co turns its attention elsewhere, to the fabled masses in mid-west America and the mostly-landlocked European. And what position did this leave SurfStitch in? A negative cash flow position where they had to continually raise debt (borrow money) to buy stock, pay rent, employees and so on.

SurfStitch may have even got a little creative to make their balance sheet look more respectable to the market. Kim Sundell from TCI (Coastalwatch) launched his own battle against the company, alleging it falsified documents to inflate the share price.

Kim alleged that TCI Group Agreements were entered into for the purpose of inflating the revenue and profit of SGL (SurfStitch Group Limited) by approximately $18.3m in circumstances where the SGL Group would not receive the amount of $18.3m as a cash payment.

So now you’ve got former SurfStitch senior management under investigation by ASIC for the following breaches.

■ Sections 180, 181, 184: Civil and criminal breaches of directors duties;
■ Section 344(2): Financial reporting contravention by Director;
■ Section 674: Continuous disclosure contraventions;
■ Sections 1041E, 1041F, 1041H: Market misconduct;
■ Section 1043A: Insider trading; and
■ Section 1309: Provision of false or material information by an officer or employee.

And you remember the bullish buys of 2013-14, yes? What stock market investor doesn’t love a maverick snapping up businesses to try and create internal synergies and put the revenue on turbo through acquisitions? It don’t always work. In this case, SurfStitch lost exactly one hundred million dollars.

Surfdome bought for $45 million (from Quiksilver)/sold for $13 million
MSW & Stab bought for $14 million/sold for $2 million
Swell bought for $35 million (from Billabong)/No return
Garage bought for $15 million/Estimated sale under $1m
FCS bought for $23.7 million/ old for $17 million

$133 million outlaid/$33 million received back

Thems are numbers to put a shiver into any biz man’s spine.

The common line reported back by FTI Consulting on all these businesses was simple and consistent. “The transaction was completed on the basis that the business contributed no value to the SGL Group and would require ongoing financial support if it was not sold.”

In laymen’s terms, all those businesses were bleeding money and needed someone to plug the hole.

So what are we left with?

Former SurfStitch execs facing possible jail time. A bunch of shareholders receiving pennies on the dollar for their shares. And one of surf’s most promising start-ups of the digital age being bought by Alceon Group, a private-equity group who counts Noni B and Cheap as Chips as their star-studded retail jewels alongside the darling of middle-aged and plus-sized women, EziBuy.

And what are Alceon getting in return?

They’re paying around six million in cash plus issuing what they say is fifteen million dollars worth of shares.

Not that Alecon is going to extinguish SurfStitch’s…cool.

“Alceon Group says it has no intention of changing the culture of hip online surf and skate wear retailer SurfStitch​ if creditors approve a merger with EziBuy, which sells clothing and homewares to middle-aged women.” – Australian Financial Review

Hotel Kommune Tachi Palace
Here we see Taj Burrow, pictured, left, at the conclusion of the 2016 Mad Hueys' WQS event, which he won, in the Hotel Kommune pool. A gorgeous libertine venue that proves the virtues of vice! On the right is Tachi Palace, Lemoore. | Photo: WSL

Comparison: Tachi Palace v Hotel Komune!

Can't decide between going to the Surf Ranch Open or the Bali Pro? Let the hotels sway your choice!

Five days ago, the price structure for hiring the Surf Ranch was revealed. Cheap? Depends who’s asking, $US11,500 per person for two days, a video compilation of your eight or so rides included.

And, two days ago, after Martin Daly’s famous boat, the Indies III announced its 2018 prices, it made for a fascinating comparison. With airfares to Indonesia, the cost was identical.

Two days in Lemoore or two weeks on a charter boat in the Mentawai Islands?

(Read the debate here.)

The same BeachGrit reader who sent in the Indies III price-list also sent a comparison of the main hotel in Lemoore, the Tachi Palace, and Hotel Komune in Bali, which is the go-to-joint in Keramas, where the WSL’s other high-performance event will run in May and June.

Now if you’re a surf fan, and I presume you are because you ain’t here for the titty, you might be drawing up your travel plans to attend either the Surf Ranch or Keramas events. Both promise a level of performance, and gymnastics, unlike anything we’ve seen.

Filipe? Gabriel? John John? Italo? Can you even imagine?

Now, you’re gonna need a hotel.

So what’s it going to be? An Indian casino, touted as the “most luxurious bingo hall in the state” famous for hosting World Extreme Cagefighting and Tachi Palace Fights or a beachfront pool party stuck atop the dunes at Keramas?

Tachi, which is a five-minute drive from Surf Ranch, promises “Airy rooms with painted accent walls, free Wi-Fi, flat-screen TVs and minifridges” as well as free valet parking, a gymnasium, slots, bingo and table games. And a buffet. 

Rooms start at around $US100 per night.

Hotel Komune promises: “a hypnotising view of the world famous Keramas surf break. With its pristine volcanic beach, this beachfront Bali resort offers a wonderful experience of spending leisure time in a natural luxury hotel. We feature 66 impressive 4 star rooms and suites and 5 star beach front pool suites and 1, 2 and 3 bedroom villas.”

Rooms start at $US200 a night (including tax) and run up to around six hundred a night if you need two private pools and two villas (Yike. I just checked. They’re sold-out already, to the famous contestants one would presume). Plenty of the cheapie rooms, however.

Booking during the contest window also gets you a VIP pass to the Bali Pro. Not that you’ll need it, of course. The (waveless) pool is…there. 

Now. Where you gonna stay?


Surfline Alexa
“From the comfort of your bed you can now ask Alexa for a surf report, and will be, in turn, informed by that soothing AI voice that your local break is currently 4-6ft and glassy, with a medium tide and a Good-Epic rating,” Surfline said in an announcement. Lots of references to "bed' and "bedroom" in the release, no?

Tech: Surfline sneaks into your bedroom!

"Informed by that soothing AI voice that your local break is currently 4-6ft and glassy..."

It was announced this morning, via press release, that wave forecasting website Surfline has partnered with Amazon’s Echo to bring shouted surf reports into your bedroom. Directly between you and your wife, maybe, or girlfriend or boyfriend. Intimate. Close. Let’s read:

Southern Californian surfers who own one of Amazon’s Echo devices can now hear how gnarly the waves are before getting out of bed.

Marine weather forecasting company, based in Huntington Beach, California, has teamed with Amazon Inc. (Nasdaq: AMZN) on the “Surfline for Alexa” skill, which lets users of the Amazon Echo and other Alexa-enabled devices check surf conditions before grabbing their boards.

Device owners download Surfline’s skill from the Amazon Alexa store and launch the service by saying, “Alexa, open Surfline.” Users can get real-time reports for thousands of surf spots around the world and ask for specific information such as wave height, wind, tide and water temperature. For a full surf report, users can say, “Alexa, ask Surfline for the full surf report at Malibu.”

“From the comfort of your bed you can now ask Alexa for a surf report, and will be, in turn, informed by that soothing AI voice that your local break is currently 4-6ft and glassy, with a medium tide and a Good-Epic rating,” Surfline said in an announcement.

Lots of references to “bed’ and “bedroom” in the release, no?

And do you have an Echo or Bose SoundLink or HomePod or similar? There is a Google Home in my home and the thing only frustrates. There it is, doing whatever it is doing too loud with the entire room shouting, “Ok Google, volume at 50%!” Also it listens in, I think, to conversations and later responds to my web searching with things I was speaking about. Also, it doesn’t know very many things.

Maybe Amazon’s Echo is superior but I don’t want it. I don’t want it to know where I’m going surfing or where I’m even thinking about going surfing. Also, will Surfline be mining and selling data like Cambridge Analytica?

Also, when Surfline talks about that “soothing AI voice” are they talking about Andy Irons?

I don’t know. I’m getting sick. Everything is bleak right now.

Laura Enever
Want a little advice for wrangling a Shippies gorilla? Act like a cat. Be ready. Be agile. (Supplied to Laura by Mikey Brennan.)

Laura Enever: “People said I’d lost my marbles!”

"I've always loved big waves," says Narrabeen hot shot… 

Five days ago, the Narrabeen surfer Laura Enever thrilled me, you, Taj, Carissa, Steph, anyone with a surf kink, when she towed into ten-foot Shipstern Bluff in Tasmania.

Ms Enever, who no longer competes on the WCT after blowing a knee paddle-surfing Jaws at the end of 2016 but who missed the 2017 injury wildcard to Malia Manuel, is making a movie, called Undone, about her transition from competitor to big-waver.

When I saw the first of the Shipstern photos, I gave Laura and her filmmaker-director Steve Wall a call to discuss.

He, for the finer details of the film; she, for the finer points of riding the infamous righthand ledge. I snatched Steve, briefly, at Hobart airport but Ms Enever proved a little more elusive.

A DM here, Hobart, a DM there, Sydney airport prior to a run to Cloudbreak to collide with a six-to-eight-foot swell, a DM that got her on the boat on the way out to the leftghander. Eventually, I got Laura beside the pool at her hotel on the Fijian mainland.

First, says Laura, she hadn’t actually…planned… on surfing Shipsterns on that trip. Tasmania was meant to be the concluding chapter after a year of surfing, and filming, at big waves around Australia. It would be the hero piece. The final act in a compelling drama of a surfer coming to terms with, and conquering, the country’s most spectacular wave.

But a swell hit, a few of the guys Steve usually shoots with, Russell Bjerke etc, were going down, how about she go and get a feel for the joint?

So she does the two-hour walk in, watches and watches from the rocks, then figures she might just paddle out, sit in the channel and get a closer look. A local bodyboarder, Shane Ackerman, gives her instructions on how to navigate the outrageous rock jump there (“You’re jumping into the biggest ocean ever, it’s quite dramatic,” says Laura) and within fifteen minutes she is on the rope, as they say.

On her first wave, Laura takes too high a line and cartwheels down the face. “I got sucked over the falls and then, as I came up, I could hear the whole channel erupting. They were losing it, loving it. Whether you made a wave or ate shit, they were stoked.”

After the cartwheel, she sits in a boat in the channel for three hours, until around four-thirty when conditions became so good, Laura couldn’t resist having another swing.

She plans on paddling, it’ss that clean, that perfect, but the local surfer Marty Paradisis tells her he’ll tow her into a set.

On the boat, another local, Mikey Brennan, tells her she needs to “be like a cat. He was yelling at me, ‘Be like a cat! Agile and ready like a cat!’ It was the best advice I got all day. You don’t know what the wave is going to do so…be like a cat.”

“I went from overthinking it to letting it happen,” says Laura. “It all happened so fast. I can’t believe how big it looks on the photos. You tow into a six-footer and it…grows.”

And her response to the response from people like Taj Burrow, Carissa Moore, Stephanie Gilmore and Sabre Norris telling her she was “a weapon”, “crazy”, and so on?

“People thought I’d lost my marbles,” says Laura. “But I’ve always loved big waves. When I was eighteen I went to P-Pass and got hooked on getting big barrels. I’ve had some awesome trips to Cloudy, I’ve been lit up at Jaws, which made me so determined to be stronger and more experienced so I can make a wave there.”

Is she a little sad that she ain’t on the tour with her gal pals?

“I wasn’t feeling that stoked on the tour. I wasn’t getting sad when I lost. I wasn’t feeling anything. When you’ve been doing the QS and the tour for seven years, there was no time to do other stuff. So not getting the injury wildcard worked out in my favour. ”

The twenty or thirty minute documentary, it’s surfing so it’s wave dependent, will be loosed sometime in the southern hemi spring.

And right now?

“Cocktails,” says Laura.

old kelly slater

Kelly Slater: “I’ll be back when time is right!”

Surfing ain't a sport so who cares!

It was officially announced, just hours ago, that history’s winningest surfer, Kelly Slater, will not be surfing in the Rip Curl Bells Beach Classic due to a nagging broken foot. His statement, short and sweet, reads:

I think it’s best that I properly rehabilitate the injury and choose to surf wholeheartedly. I’ll be back when the time is right.

Rip Curl, the company best known for using North Korean slave labor to stitch boardshorts, will sorely miss his presence seeing as tickets are sold for the event and a Kelly-less draw equates to 18 fewer ticket sales.

Kelly Slater also withdrew, at the very last minute, from the Gold Coast event which was won by Julian Wilson.

Now, here is the thing. In any other sport this sort of “I-am-old-and-got-hurt-but-was-once-a-star-and-so-people-still-dream-that-I-will-come-back-from-this-injury-and-blow-doors-like-I-used-to-except-they-always-forget-that-I-am-old-and-old-people-don’t-do-nothing-but-complain-about-entitlements-and-wish-for-the-way-things-used-to-be-but-whatever-I’ll-keep-pretending-I-can-soar-because-A)-I-am-competitive-and-really-believe-I’ve-got-something-left-in-the-tank-and-B)-I-wants-that-money-bitch” thinking really drives me crazy because no old star ever comes back and shines. Old athletes are the anchor of any team and I don’t mean anchor in the “holding-the-team-together” kind of way but the “dragging-everyone-to-the-damn-ocean-floor” kind.

But, and here is the thing. Professional surfing is not a sport and professional surfers are not athletes.


I have zero problem believing that Kelly Slater will take this year to heal his foot, come back fresh next year and win a title at 48. When that happens the WSL will be almost screwed because geriatrics aren’t a great market but that bridge can be crossed another day. Right? I mean, the lamestream media will go on and on and on about how old Kelly is etc. but what they should go on and on and on about is how easy surfing is. Not easy to learn, obvs, and not easy to push through that hideous intermediate plateau but if any man or woman has the genetic superiority for consistent air landings and big barrel ridings than they can surf until they die.