Surfstitch sells UK Surfdome arm for token price
Troubled Australian e-tailer Surfstitch is to sell its UK e-commerce operation Surfdome as it retreats from the international stage, according to reports.
The Australian company is operating in administration and the administrators from FTI Consulting said they have agreed to sell the British business to Internet Fusion for just £7 million (A$11.8 million). Part of that is being paid upfront with the rest being a deferred payment, the Australian Financial Review reported.
Internet Fusion is a sports and adventure retailer with private equity backing and it’s getting Surfdome at a knock-down price. Surfstitch is believed to have paid around A$16 million for Quiksilver’s share of Surfdome three years ago, although the price has not been confirmed and the company was also reported to have paid up to A$45 million for the brand from Quiksliver and its founder Justin Stone.
The purchase of Surfdome in 2014 was part of a buying spree by Surfstitch founders Justin Cameron and Lex Pedersen prior to its A$214 million IPO in December of that year and gave the Australian firm a sizeable presence in the UK and mainland Europe.
In the following year, the firm spent another A$120 million with the company targeting fast growth through acquisitions, including UK-based surf forecaster Magicseaweed
But the value of many of the acquisitions was later written down after a new board was installed following Cameron’s departure as he tried to put together a private equity bid that never materialised.
The administrators said that while Surfdome was on the firm’s books with a value of A$34 million and was making profits from sales of A$82 million, it still faces major challenges.
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