What’s Going on With Rip Curl?
I don’t generally have a way to get good information on Rip Curl, but somebody sent me the interview below with Rip Curl co-founder and owner Brian Singer. Why don’t you read it, then I’ve got a comment for you.
Rip Curl co-founder and owner Brian Singer speaks exclusively to the Surf Coast Times about Rip Curl sale.
Rip Curl will only be sold to a company that looks after brands and the communities in which they reside and to which they are connected, according to one of its owners.
Following the announcement last week that the board of Rip Curl has appointed financial advisors Merrill Lynch to assist the business in exploring opportunities for whole or partial sale, company co-founder and part-owner Brian Singer spoke exclusively to the Surf Coast Times to reassure the community that Rip Curl would only be sold to a company that has the business’ and community’s best interests at heart.
“Merrill Lynch has got a clear objective in this,” he said.
“We’ve told them we’re interested only in a company with a track history of looking after brands and the people involved with them.
“We’ve had a couple of approaches from a couple of companies that have that track record, which led us to appointing Merrill Lynch to explore the opportunities on our behalf.”
Mr. Singer said should the business be sold, he could see no reason as to why the purchaser would change much about how the business is run – including maintaining Rip Curl’s global headquarters in Torquay.
“We see no reason to believe anything would change. If somebody or (a) company purchases it, why would they upset the apple cart? The company was born there (Torquay). Why mess with a formula that’s worked?
“The company’s had a long association with Torquay and the (Easter Rip Curl Pro surfing) competition at Bells Beach. We expect that the building would remain there and the people will remain there.”
Last week, Rip Curl issued a statement saying the company had grown its revenue compared to the year prior – in contrast to general surf industry performance – and the board had appointed Merrill Lynch to assist them in exploring opportunities available as well as assessing the merits of introducing a third-party investor to the group.
“The board recognizes that if any such investment were to occur it would need to be consistent with our objectives of ensuring our company values and brand values are respected – supporting our staff and being in the interests of our shareholders,” the statement read.
The company is valued between $480 million and $500 million and employs 260 staff in Torquay, making it one of the biggest employers on the Surf Coast.
Surf Coast mayor Brian McKiterick said he had spoken to Mr. Singer who had reassured him that the company would continue in Torquay if it were sold.
“He confirmed that they’ve been looking at some companies who made approaches,” Cr McKiterick said.
“He was adamant that it would be business as usual; the Rip Curl Pro would continue at Bells Beach and the business would remain operational in Torquay.
“He said they were very conscious that if it was sold it would have to be to a company who didn’t have a history of breaking up brands. “It’s very welcome news for the town, the surf industry and the shire as a whole.”
What I find intriguing about this is that it’s hard to imagine a buyer or investor paying full price for Rip Curl, or any other company, and agreeing in the contract not to move it or break it up and that it would be “…looking after brands and the people involved…” regardless of what assurances they might give outside of the contract. One has to believe that Merrill Lynch has told Rip Curl’s principals exactly that, as typically investment banks only get paid if the deal closes.
I personally admire what Mr. Singer is saying and hope he can pull it off. Maybe Rip Curl doesn’t really need a deal or is so attractive that Mr. Singer can be very selective as to who he makes a deal with. If that’s not the case, he’d better lose the rose colored glasses.
… and I don’t believe that is the case if I may be so bold (“Maybe Rip Curl doesn’t really need a deal or is so attractive that Mr. Singer can be very selective). I have been in the industry since 1970 and have seen 4 decades of the good, bad & ugly. Face it – we are in the Ugly. We are in times that we have not seen since the birth of the surf industry, and possibly not since the late 20’s if anyone is bold enough to start mentioning the “D” word as in Depression.
The big brands are being crushed under their own weight which is a sad, but a true reflection of these economic times – globally.
The big question is what is the future of Specialty Retail with regards to the big brands.
Hi Geoff,
I pretty much agree with you. About Rip Curl and about the economy. Though we have a few public numbers to suggest Rip Curl has issues, I couldn’t prove it on hard, public information so I’m reluctant to draw a conclusion. I try not to yell “fire” about specific companies if it’s possible there isn’t one. But you don’t hire Merrill Lynch for fun.
As far as the economy goes, economic downturns caused by debt/liquidity problems are different and worse than the kind we’ve all lived through. Economic growth can come from increasing population and/or increasing productivity. Those are the only two choices. Our replacement birth rate is about 2.1 kids per woman. Right now it’s 1.9. We need immigration. Our rate of productivity increase has fallen dramatically (no numbers in front of me- sorry). I think that’s mostly because the big boost we got was from women entering the work force, and that’s largely over.
This is a social and cultural as well as economic issue. Strongly suggest you read a book called The Fourth Turning.
Thanks for the comment,
J.
I spoke with one of the owners and the CEO at Rip Curl yesterday in Torquay they have pulled the idea. No media picks this end up. RC will stay as is for now it seems.
Hi Kel,
Not a surprise. It never sounded like they were realistic about what kind of deal they could do. Thanks for the update.
J.