Billabong's retail swell proves too tempting for this Merchant

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 8 years ago

Billabong's retail swell proves too tempting for this Merchant

By Colin Kruger

The Billabong retail disaster has kept a low profile since its near-death wipe-out some years back, but recent conditions have proved a little too tempting for insiders like company founder Gordon Merchant.
He dipped into the market last week, spending just over $1 million on 1.75 million shares at 57¢ each, a big premium to its all-time low of 10.8¢ in 2103.

Merchant's stake is now worth $60 million, and still has a bit of ground to recover before it nears its previous peak in 2007 at $900 million, when Billabong was worth $3.8 billion.

Illustration: John Shakespeare.

Illustration: John Shakespeare.

And he hasn't been the only one tempted back into the surf. Chairman Ian Pollard picked up 60,000 shares in March.

And Billabong's saviours – the hedge funds Centrebridge and Oaktree – continued to creep up the register in March, lifting their combined stake from 36.2 per cent to 38.5 per cent.

NAOS Asset Management's Sebastian Evans, has also been extolling the virtues of the comeback kid.

"It's a lot easier to turn around a company with a great brand, and you can't get many global brands in Australia any more in retailing," he told Bloomberg after recently splashing out on shares at 60¢ a pop.

Snakes alive

Woolies boss Grant O'Brien is not the only one who will have to be on his toes when he opens the grocer's Bella Vista HQ to outsiders on Wednesday for its annual investor day.

The building's proximity to Bella Vista Farm, and local creeks, creates the occasional problems with local wildlife. More specifically in this case, snakes.

Advertisement

Staff received emails warning of the danger late last week.

Mind you, a reptile warning to the assembled analysts on the day might distract a few minds from Woolies hardware problems and the pesky threat from Aldi.

Big Mac

Billabong, Gordon Merchant, Woolworths, Grant O'Brien, John McFarlane, Vasse Virgin,

It was a mixed start for former ANZ boss John McFarlane, who took over as Barclay's chairman after its shareholder meeting last week.

Investors were not as toxic as last year when it came to the pay packet of chief teller Antony Jenkins, but noses were out of joint after the AGM.

McFarlane, who has been brought in to rebuild the bank's relationship with shareholders, chose not to actually mingle with them.

In his first hours as Barclay's £800,000-a-year chairman, McFarlane was holed up in a private room in London's Royal Festival Hall enjoying a valedictory lunch for departing chairman David Walker.

Extra Virgin

Richard Branson's entrepreneurial legend was built on David and Goliath battles with the likes of British Airways, but it's hard to be the little guy when you're a multinational corporation.

Which brings us to the Swiss outpost of Branson's empire, Virgin Enterprises Limited (VEL), which manages and protects the Virgin trademark.

It has managed to get itself into a spat with Vasse Virgin – an olive oil maker in Western Australia's Margaret River district.

And no, CBD is told that it is not part of a grand plan by Virgin's local Italian stallion, John Borghetti, to move into olive oil in a desperate bid to claw his local airline back into the black.

Vasse Virgin's and Louis Scherini said they recently attempted to refresh the brand and extend it to a broader product range when "the Virgin Group has objected to the application claiming the right to exclusive use of the word 'virgin'."

They say their global nemesis argued that the continued use of the trademark Vasse Virgin "would cause confusion in the market and that people may assume a connection between Vasse Virgin and the Virgin Group".

Virgin's Swiss gnomes have a different take on it.

"We have objected to the application to register the trademark Vasse Virgin in Australia because the trademark application covers a very broad range of goods and services, some of which fall squarely into the core activities of the Virgin Group (in particular transportation services)," said a spokesman.

"Our concerns do not relate to use of the name in connection with olive oil products."

Virgin said talks are continuing between the two parties "to resolve these issues".

Got a tip? ckruger@fairfaxmedia.com.au

Most Viewed in Business

Loading