Blog: Leonie BarrieBillabong buy takes another turn

Leonie Barrie | 21 January 2013

The race to buy Australian surfwear brand Billabong took another turn last week with a new bid from VF Corp and private equity firm Altamont Capital Partners. The AUD524m (US$551m) offer matches another tabled last month by North American division boss Paul Naude and Sycamore Partners.

The latest move means that four potential suitors have now circled the brand over the past year. But why has none of this interest yet turned into a deal? just-style asks "What's wrong with Billabong?"

But a deal to sell US-based footwear maker K-Swiss to South Korean apparel conglomerate E-Land World for US$170m is set to close during the second quarter of this year. E-Land is planning to invest in global growth for both the K-Swiss and Palladium brands.

Meanwhile, retail giant Wal-Mart has pledged to increase the amount of apparel it sources from the US, in a bid to boost domestic manufacturing and create more jobs. As part of this effort, Wal-Mart says it will buy an additional US$50bn in US-made products over the next ten years.

With wages and fabric prices, infrastructure, social tension, energy costs, currency rates, power availability and a buyer's ability to control the uncontrollable all influencing apparel sourcing decisions, this month's Flanarant argues that unpredictability will continue to rule in the year ahead.

Vietnam, however, is aiming to become one of the top five textile and clothing manufacturing and exporting nations by 2020, while simultaneously fostering social improvements and environmental well-being, according to recent research.

On the retail front, US clothing stores registered sales increases in December, but economic uncertainty continued to impact the sector as a whole. While in the UK, clothing and footwear sales volumes fell 3.5% during the month.

And having spent much of the past 12 to 18 months developing offerings for both customers and staff across multiple touch points, the next challenge facing fashion brands and retailers is to connect the multi-channel dots as stores, desktop and mobile channels merge.


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