Australian surfwear brand Billabong has said takeover talks with two potential suitors have collapsed, as it lowered its full year profit forecast.

The company's share price plunged on the news that potential bids from Altamont Capital Partners and Sycamore Partners will not proceed.

However, the two private equity firms remain in discussions with the surfwear brand for alternative refinancing and asset sale transactions, the proceeds of which would be used to pay of the company's existing debt facilities.

"The refinancing is intended to provide the company with a comprehensive solution and an appropriate capital structure, allowing it to continue its reform agenda," said chairman Ian Pollard.

"It's our intention to conclude these discussions as soon as practically possible while aggressively reducing costs across all our global operations."

The company also confirmed it is considering the sale of its Canadian retail chain West 49.

Billabong now expects full-year EBITDA to be in the range of AUD67-74m, down from initial forecasts of AUD47-81m due to weaker trading in Australia and higher than expected start-up losses in SurfStitch Europe.

The company said Australian wholesale is on plan, but retail is below last year, down 5.4% on a comparable store basis. Gross profit is also down 2.3% on the prior year period in Australia.

Europe also remains weak, particularly for the Billabong brand. Start-up losses for SurfStitch Europe have been AUD4m than anticipated. The company said it is taking steps to limit these losses.

The company's share price fell 49.45% today as trading resumed, with shares worth AUD0.23 at the close of trading today (4 June).