From the article: Billabong: A Cigar Butt With Upside? by Mike Arnold
Things look terrible at Billabong. However, as management sells off assets (West 49, etc), closes retail locations and refocuses on its distribution channels and brands, in my opinion, the company will survive, in one way or another.
The question is, will equity shareholders retain ownership in the future operations?
With a net debt position of only $152 million (not including some $350 million in off balance sheet lease commitments), it does not appear like an insurmountable hurdle to sell assets and/or issue a bond to protect shareholders and bank lenders.
In addition, I wouldn’t be surprised if a white knight came in to pick up the assets on the cheap and/or for strategic purposes. Nike (NKE), Adidas (ADDYY.PK), Columbia Sportswear (COLM), and Under Armour (UA) come to mind. VF Corp has already expressed interest in the assets.
In the comments section there is also a referance to an old NY Times article from 2003 on the purchase of Converse by Nike.