LAYNE AND RABBIT HOP ONBOARD SURFING AUSTRALIA BOARD 09.03.10
Surfing Australia has announced that Layne Beachley has accepted a position on the Board of Surfing Australia concurrently with Wayne “Rabbit” Bartholomew also accepting the position as the first ever Patron of Surfing Australia. Both former World Champion surfers, Layne a seven-time world champion, their influence on the sport has been enormous during and post their competitive careers. Surfing Australia Chairman Norm Innis commented on both appointments by saying,
“Rabbit was a hero of mine when I was a teenage surfer in the mid seventies, and I count myself extremely fortunate that I was able to work with him directly over the years in a number of different capacities – particularly with ASP International when he first came on board as CEO in 1999 and 2000. Rabbit has done so much in surfing I wouldn’t know where to begin describing his achievements. Rabbit is “Mr Surf” in Australia! As such, he was the obvious choice as Patron of Surfing Australia – the first ever person appointed to this position. I know Rabbit will continue to work for the betterment of the sport of surfing as long as he is able – and to have him allied to Surfing Australia as Patron shows the high regard in which he is held, not just by surfers, but by the whole community in Australia.”
“I first met Layne almost 20 years ago when she was just starting out on her career. Even then she was super focused, and that determination not only eventually resulted in 7 World Surfing Titles, but also in Layne becoming a talented businesswoman, a philanthropist, and a role model for female surfers everywhere. Layne obviously brings a much needed female perspective to the Board of Surfing Australia, but in addition she brings her professional surfing experience, her immense range of contacts, and her personal vision for surfing in Australia. I take great pleasure in welcoming her to the Board.”
Their appointments are effective immediately and both are set to tackle their roles enthusiastically.
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CIVIL CLAIM AGAINST BILLABONG BY FORMER INDONESIAN LICENSEE 09.03.10
Billabong International Limited has today released an official statement to the ASX advising that it is subject to a civil claim in the Denpasar District Court in Indonesia by its former
Indonesian licensee, CV Bali Balance (CVBB), alleging, among other matters, that
the termination by Billabong of CVBB's licence to distribute products in Indonesia was
invalid.
While Billabong believes that it is highly unlikely that the civil claim will have any
material adverse effect on its business or operations outside Indonesia or on the
revenue, profitability or financial condition of the Billabong Group as a whole,
Billabong is issuing this statement now to ensure that any media coverage that may
result from the commencement of the civil claim is made with knowledge of
Billabong's position on these matters.
The background to this claim is that Billabong terminated the licence in 2005 relying
on a right of termination in the agreement. Upon termination, the licence had
approximately three years left until expiry. Although CVBB signed a deed
acknowledging the validity of the termination at the time, it is disputing the validity of
termination. Since the termination, Billabong has been conducting its business in
Indonesia directly through its wholly owned subsidiary, PT Billabong Indonesia.
Billabong's business in Indonesia represented approximately 0.7% of the Group's
global sales in the 2008/09 financial year.
Billabong believes on the basis of the legal advice it has received that there is
absolutely no basis whatsoever for CVBB's civil claim. In Billabong's view, the civil
claim is simply tactical litigation in Indonesia to attempt to influence the settlement
discussions which are ongoing between Billabong and CVBB.
The Billabong entities which are the subject of the civil claim are PT Billabong
Indonesia, Billabong International Limited and GSM (Operations) Pty Ltd. PT
Billabong Indonesia will defend these proceedings, including by disputing the
jurisdiction of the Indonesian court regarding the termination of the licence
agreement, which is governed by Queensland law and the parties have submitted to
the jurisdiction of the Queensland courts, including proceedings already filed by
Billabong in Australia. Billabong International Limited and GSM (Operations) Pty Ltd
do not believe that the Indonesian courts have jurisdiction over them.
Billabong notes that the civil claim includes a claim for compensation of US$53 million
for specific loss which CVBB claims to have suffered from the alleged invalid
termination (including matters such as alleged medical costs of CVBB principals),
plus US$100 million for 'unspecified' damages arising out of the termination. This is
despite the fact that the licence had approximately three years left until expiry and in
the last full year of the licence under CVBB’s control it is understood that, based on
royalties to be paid to Billabong, CVBB had annual sales of Billabong group product
of only approximately A$13 million. There is no evidence to support the amount of
compensation claimed. Indeed, given CVBB's operations and the remaining term of
the licence, it is not possible that CVBB could have incurred any loss remotely like
what it now claims, even if the termination was invalid (which Billabong denies).
While this is the case, litigation is inherently uncertain and there is a possibility of
some judgement in Indonesia coming out of the civil claim against Billabong. Any
judgment obtained would be enforceable against the assets of Billabong in Indonesia,
which are immaterial to the Billabong Group. CVBB would face hurdles in seeking to
enforce any judgment which is given by the Indonesian Court against Billabong
International Limited or GSM (Operations) Pty Ltd in Australia, not least of which
because Indonesia is not recognised as a reciprocal country under the Foreign
Judgments Act 1991. Billabong would strenuously resist any such enforcement
action.
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In addition to the civil claim, CVBB has taken a number of other actions in Indonesia
which Billabong believes are designed to influence the settlement negotiations
between the parties. A criminal charge was brought against a PT Billabong Indonesia
employee on a complaint by CVBB relating to the use of in-store promotional tools
allegedly owned by CVBB after the termination, and a claim was brought by CVBB
against the Indonesian foreign investment authority, claiming that the grant of
Billabong's investment approval and permanent licence to operate in Indonesia were
wrongly issued. Although the lower courts have issued judgments against the
employee and finding for CVBB on the foreign investment approval, the
Administrative Court matter is currently subject to an appeal to the Indonesian
Supreme Court and the criminal conviction will soon be subject to such an appeal.
Billabong has provided the governments of Indonesia and Australia with regular
updates on these matters.
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BILLABONG OPENS LATEST CONCEPT STORE IN DISCOVERY MALL, BALI 09.03.10
Billabong opened their latest concept store on the weekend at the Discovery Shopping Mall, Bali in partnership with local retail management company, PT Greenbowl Indonesia. Its the latest of a succession of retail stores opened by Billabong South East Asia in recent months. "We are very excited to cooperate with PT Greenbowl Indonesia for the opening of Billabong concept store in Discovery Shopping Mall," stated Robert Khuana, Director of PT Billabong Indonesia. "We are confident that this will bring positive economic stimulation in Indonesian market."
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BILLABONG’S PLAN B. 09.03.10
Billabong International Limited announced it has entered an exclusive 10-year agreement to license the California-based skateboard brand Plan B. The partnership, which covers all territories globally, will see Plan B continue under its current management structure and leverage the backend distribution and general business support of the Billabong group. Billabong North America president Paul Naude said the licensing arrangement would allow Plan B to maintain its focus on the creation of premium skateboarding products and the promotion of skateboarding. “Plan B is an authentic, progressive brand and this arrangement will allow its management to focus on its core capabilities while leveraging the global infrastructure of the Billabong group,” he said.
“Billabong already has a shared commitment to the development of skateboarding through the Element and Sector 9 brands and we view Plan B’s high quality products as a tremendously complementary.
Plan B is owned by professional skateboarders Danny Way and Colin McKay and is widely regarded as a leader in the development of skate hardgoods. Its roster of sponsored athletes is also considered world class and includes inspirational skateboarders such as Paul Rodriguez, Ryan Sheckler, PJ Ladd and Pat Duffy, along with the brand owners.
Colin McKay said the licensing arrangement would help Plan B realize its global potential. “We couldn’t be happier to be coming together with Billabong and Element Skateboards to form a new skate distribution,” he said. “We share a common vision for the future of Plan B and their expertise in building brands made this a perfect choice for us. I look forward to working together to realize Plan B’s full potential.”
Danny Way said both parties stood to benefit from the new arrangement. “There is a mutual respect between Plan B, Element and Billabong,” he said. “Their strength and philosophy on business combined with ours on skateboarding makes this partnership a no brainer.”
Tom Jones, Plan B’s Vice President, said the new arrangement would help support Plan B’s commitment to progression. “We wanted a relationship that would allow us to bring something new and progressive to the skateboarding community,” he said.
“The ability to promote the best quality products with our team’s style of skateboarding allows us to bring inspiration to skateboarders all over the world. I couldn’t be more optimistic about Plan B’s future with the Billabong group.” The arrangement also included an option for Billabong to acquire the Plan B business over the next 10 years, but with the ongoing involvement of Danny Way and Colin McKay if this occurs.
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SIMA’S WATERMAN’S WEEKEND LINE-UP ANNOUNCED 08.03.10
The USA’s Surf Industry Manufacturer’s Association (SIMA) has announced the award recipients of their annual Waterman’s Weekend. The two-day fundraising event raises money for SIMA’s Environmental fund which awards grants to a variety of environmental groups. In 2009, the weekend raised more than $400,000USD for 17 ocean conservation groups. The beneficiaries for this year’s event will be named in the next few weeks.
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KSUBI BUYOUT BY INSIGHT PARENT CO ‘IRREVERSIBLE’ 02.03.10
The sale of troubled denim label Ksubi is at an ‘irreversible stage’ according to the director of the company set to take control. Ksubi is poised to be bought for $5 million by a joint venture that includes one of its directors, after creditors agreed to place the company in liquidation. The deal will see Ksubi founder and Insight creative director George Gorrow, the major shareholder former Quiksilver executive Harry Hodge, and Ksubi manufacturer and Insight parent company Bleach take control of the label. Ksubi, the idea of Gorrow and Insight’s Dan Single, began trading in 2000. At its peak in 2007 Ksubi reportedly turned over $19.7 million. But administrators at Grant Thornton accounting and advisory firm say it was probably insolvent by January 2008 before it signed a five-year deal with David Jones. Creditors have learnt that the Australian part of the group acted as banker to its US entities, lending $4.2 million that management now says is unlikely to be repaid in the near future due to the allegedly limited capacity of the US operations. The sale to Bleach would secure the employment of Ksubi's 29 staff and ensure priority creditors are paid 100c in the dollar. An administrator's report says discussions between Ksubi and Bleach began early last year. Bleach took on production and manufacturing for Ksubi in July. Should the deal between the two companies fall away, the extent that the Ksubi business was ''given'' to Bleach in the past year needs to be fully understood, the report says. A handful of creditors met last week and took the administrator's advice to wind up the companies. The US companies are not included. Administrators found that the company failed because of its decision to move manufacturing to the US, poor management and the global financial crisis. Ksubi owes creditors more than $9 million, including $4.28 million to Westpac. The group reported a net loss of $7 million in the 2008 financial year and $1.46 million the following year. It owed trade creditors $3.2 million in March 2008 but had reduced that to $1.9 million by last June. George Gorrow owns 10 per cent of Bleach, according to the administrator's report.
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