After months of rumors, Billabong International announced today that it has entered into an agreement to acquire Costa Mesa, California-based apparel brand RVCA for an undisclosed sum. The acquisition notice comes as little surprise, as speculation of the news has been circulating since early spring. In fact, during an exclusive TransWorld Business interview conducted in May, RVCA Founder Pat Tenore made this statement when asked whether the brand was for sale:
“RVCA started in my garage and I have given it everything I have for the past 9 years. Ultimately, I want to do what is right for the brand, my team, and everyone involved with RVCA. I think I have a responsibility to keep an open mind and not close any doors or miss opportunities.”
Since it was founded in 2001, RVCA has built a strong distribution platform, which crosses over several channels. The brand is sold in stores ranging from streetwear boutiques, to specialty surf and skate shops, mall-based retail chains like PacSun, as well as select department stores such as Nordstrom. According to Tenore, the brand has been able to achieve this diverse distribution base by organically participating in and marketing to various subcultures—including art, fashion, music, even mixed martial arts.
“Our distribution grew organically over the years, while RVCA has been very selective about the accounts we chose to partner with,” he says. “Our national retailers have helped us introduce RVCA to a larger audience and given us the ability to further support our subcultures in ways that we would not have previously been able to. I think people appreciate the message we bring and we have made our product in a way that there’s something right for each one of the customers that comes to shop at a RVCA retailer, whether that is a specialty shop, boutique, or larger store.
In Billabong’s release, North American President Paul Naude says this versatility played a role in Billabong’s decision to purchase the brand.
“RVCA has done an incredible job to date in terms of building its brand, differentiating its product and supporting various subcultures through its Artist Network Program, its athletes and its advocates,” Naude says. “We want to see it build on these strengths and we’ll offer the necessary support to allow it to achieve its potential.”
Billabong began acquiring apparel, accessory, and hardgoods brands back in 2001 with the purchase of Von Zipper, and has not slowed down since. The company has also made several sizeable retail acquisitions in the past two years, making it not only a major player in the wholesale side of the business, but one of the largest retail companies in the action sports market as well. (see full timeline below)
Known for allowing companies to remain relatively autonomous following acquisitions, Billabong was an appealing buyer to Tenore. “One of the key things about Billabong is its respect for the creative independence of each of its brands and that level of flexibility will allow RVCA to maintain its identity while benefiting from the support of the wider Billabong group,” he says.
For more details, stay tuned to twsbiz.com.
Billabong Acquisition Timeline
- Von Zipper ( March 2001)
- Element (July 2001)
- Kustom and Palmers Surf (October 2004)
- Honolua Surf Co. (January 2004)
- Nixon (January 2006)
- Beachworks (2006)
- Xcel Wetsuits (September 2007)
- Tigerlily (December 2007)
- Quiet Flight Surf Shop (June 2008)
- Dakine (August 2008)
- Kira Surf (June 2008)
- Sector 9 (June 2008)
- Two Seasons (October 2008)
- Swell.com (November 2009)
- License agreement with Plan B (March 2010)
- Becker Surf & Sport (May 2010)
- Bids on West 49 (June 2010)
- RVCA (July 2010)
Here’s the Release:
July 11, 2010: Billabong today confirmed it had reached conditional agreement to acquire the California-based RVCA brand. Billabong North America President Paul Naude said the acquisition signalled an exciting time in the evolution of RVCA and would afford the brand more creative freedom.
“RVCA has done an incredible job to date in terms of building its brand, differentiating its product and supporting various subcultures through its Artist Network Program, its athletes and its advocates,” said Mr Naude. “We want to see it build on these strengths and we’ll offer the necessary support to allow it to achieve its potential.”
He said RVCA would benefit from the global infrastructure of the Billabong group.
“There comes a time in the development of a young brand when the administrative side of doing business can start to consume resources that are better applied to the creative development of the brand,” said Mr Naude. “I think this is one of the strengths of the Billabong group. We have capabilities in areas including sourcing and the management of the supply chain, distribution and general financing and these types of support structures allow our brands to focus on product and marketing.”
Brand founder Pat Tenore said he was looking forward to working with Billabong. “The original concept of RVCA was, and still is, to be a lifestyle brand that integrated different subcultures within one platform … a platform for like-minded people to produce great art and other creative endeavors, while getting recognition for their contribution and involvement,” said Mr Tenore. “RVCA will be able to take this concept even further and provide a more extensive support base for the artists, athletes and advocates we work with. “One of the key things about Billabong is its respect for the creative independence of each of its brands and that level of flexibility will allow RVCA to maintain its identity while benefiting from the support of the wider Billabong group.”