Online surf retailer SurfStitch sold as owner pivots to core business rolling out Lego stores

"SurfStitch was losing money and had struggled for some time. Sales had shrunk to a fraction of what they once were.”

Much mystery and whispers a little under a week back when online sleuths brought the evaporation of SurfStitch from the internet to BeachGrit’s attention. 

You’ll remember when SurfStitch was the king of the world, ruled by the yin and yang of Lex Pedersen, a cute brunette, and Justin Cameron, a bullish hot blonde with a vision to take SurfStitch to the heavens. The company they started in a little industrial area on Sydney’s northern beaches in 2007 soared to a half-a-billion-dollar valuation by 2014. 

Heady, heady days.

And, then, poof, as they say.

A $155 million loss in 2016 was driven by the disastrous acquisition of FCS, Stab, Magic Seaweed and Coastalwatch and shareholder lawsuits over inflated forecasts.

That same year, Coastalwatch, which was suing Surfstitch over a content-sharing deal that put twenty-mill on the Surfstitch balance sheet, offered to buy the whole thing for fifty-ish mill.

By 2017, shares had crashed from two bucks to six pennies apiece, and SurfStitch entered voluntary administration, dubbed a “total collapse”.

Alceon Group acquired it in 2018, folding it into Alquemie Group, but recovery stalled. In 2023, Alquemie posted a $2 million loss, down from a $3.2 million profit, amid redundancies and a failed SurfStitch rebrand.

And, now, after being offline for over a month, Alquemie have revealed the joint has been sold, along with gal’s brand Ginger & Smart, to an unknown buyer. 

A former employee of Alquemie told the Australian Financial Review, “both Ginger & Smart and SurfStitch were losing money and had struggled for some time. Sales, the person added, had shrunk to a fraction of what they once were.”

The owners are real into Lego instead of surf, skate, with the company having just opened its twenty-third Lego store. It also owns Australia’s version of Urban Outfitters, General Pants, which has a fifty-five stores. 

Biggest question to Australian readers is, where to find twenty dollar Depactus trunks now? Keen readers will remember SurfStitch scooping up Depactus in 2017.

As Chas Smith asked at the time, 

“How was SurfStitch aware that Depactus had not totally died? Do you think the SurfStitch x Depactus relationship will fare better than the SurfStitch x Stab one? Will Depactus go out and sponsor more Men of Extraordinary Pursuits? If SurfStitch came to your house looking to buy you would you flee or ask, ‘How much you got?’”

Oh and the best thing. 

Did you know that in the 2016 financial year, SurfStitch made two ten-year agreements with Coastalwatch and its various companies whereupon “Coastalwatch would provide a link on its website to SurfStitch Group’s Australian website for a fee of $8 million”?

How could it fail?