Surf’s up: Rip Curl hit by M&A wave as NZ rival pounces in $236m deal

Wild ride: Kathmandu’s deal with Rip Curl leaves the New Zealand outdoor clothing brand riding high with more than 341 stores around the world. (Shutterstock)
Updated 01 October 2019

Surf’s up: Rip Curl hit by M&A wave as NZ rival pounces in $236m deal

  • End of an era as outdoor brand Kathmandu snatches control of the last of Australia’s big three surfwear brands

SYDNEY: New Zealand outdoor clothing maker Kathmandu Holdings said that it will buy Rip Curl Group for A$350 million ($236 million) in a deal that leaves the last of Australia’s big three surf brands under overseas control.

Kathmandu said that the acquisition would make it a NZ$1 billion ($625 million) company, expand its presence in Europe and North America, and give it a “seasonal balance” between Rip Curl’s summer/beach focus and Kathmandu’s winter and outdoor offerings.

Started in 1969 by surfer friends Brian Singer and Douglas Warbrick, and still based at popular Bells Beach in Victoria, Rip Curl with local rivals Billabong and Quiksilver ranked among the world’s biggest brands for sales of wetsuits, boardshorts and popular branded beach T shirts.

The sale closes a chapter on Australia’s once central role in surfwear culture. US private equity firm Oaktree Capital gained control of Billabong and Quiksilver over the past three years following troubled efforts by the companies to expand globally.

Singer and Warbrick will gain shares in Kathmandu as will Rip Curl CEO Michael Daly, who will continue in his role and report to Kathmandu CEO Xavier Simonet, the companies said.

Clothing retailers around the world are paring back brick-and-mortar operations to compete with online giants such as Britain’s ASOS and low-cost “fast fashion” chains such as Zara, owned by Spain’s Industria de Diseno Textil.

The fiercer competition has coincided with economic headwinds which have prompted central banks to cut lending rates.

“We are seeing rates being cut around the world, which means the cost of capital for foreign entities is getting much cheaper ... so we’ll probably see more M&A because of that,” said Daniel Cuthbertson, managing director of Value Point Asset Management.

After buying Rip Curl, Kathmandu said that it will have 341 of its own stores around the world, plus 254 licensed outlets in Australia, New Zealand, North America, Europe, Southeast Asia and Brazil.

Case against Ghosn excuse to get him out of Nissan, claim lawyers

Updated 13 November 2019

Case against Ghosn excuse to get him out of Nissan, claim lawyers

  • The former motor giant chief’s legal team has alleged that both his arrest and the prosecution efforts have been illegal

TOKYO: The drama surrounding the arrest of Carlos Ghosn, former boss of motor giants Nissan and Renault, has yet to reach its climax. Yet the plot continues to thicken with each new development.

On Monday, Ghosn’s defense lawyers unveiled court submissions highlighting the circumstances in which the 65-year-old executive was arrested and subsequently held in detention.

“We believe that Mr. Carlos Ghosn is innocent. We believe that the arrest and the prosecution efforts thus far are illegal and therefore Mr. Ghosn should be immediately released,” the head of his defense team, Junichiro Hironaka, said during a press conference at the Foreign Correspondents Club of Japan in Tokyo on Monday.

Hironaka claimed that Nissan wanted to kick out Carlos Ghosn from the company and therefore put together a team dedicated to searching around for something that would justify them to do that.

“This prosecution motion wasn’t initiated because the prosecution side believed that Mr. Ghosn had committed an illegal act. Fundamentally there is a problem with this being treated as a criminal act,” he said.

Hironaka further said that the prosecutor’s office is supposed to be acting in the public good for everyone and not behalf of a specific corporation.

“From the investigation level, there were various problems and mistakes with this case. Furthermore, the Japanese persecution office can’t reach overseas so they rely on Nissan employees to go into Mr. Ghosn’s offices and residences and removed objects illegally,” he said.

Hironaka said there is no evidence to support the alleged wrongdoing claim that Nissan made payments to SBA in Oman, and Ghosn re-directed that money to himself or his family.

“The amounts that were paid by Nissan matched exactly the amounts due to SBA,” he said.

The lawyer had a similar response to the reports connecting some donations by Ghosn to a school in Lebanon that would somehow benefit himself. “There is absolutely no evidence or factual basis for indicating that,” Hironaka said.

He said that his team is trying to access correct information and find out what evidence the prosecution might have.

“I have made an effort to share information with the media, including the foreign media, during this whole pre-trial motion,” he said.

Under the Japanese system, the prosecutors are not required to disclose all the evidence at their disposal. Japanese law requires that prosecutors must disclose anything related to any evidence related to the specific filings they make.

They must also disclose any evidence that is related to the filings that are made by the defense counsel. However, there is no requirement for them to disclose evidence from other parts.

Ghosn was arrested at Tokyo’s Haneda Airport on Nov. 19, 2018, on multiple charges related to his stewardship of the two companies.

The cases involved not only Nissan-Renault and Japan’s Mitsubishi Motors (part of the Franco-Japanese alliance), but also the Japanese and French governments along with various key players from Asia and the Middle East.

Nissan was on the brink of bankruptcy in March 1999, with about 2 trillion yen ($17.6 billion) in interest-bearing debt.

This is when it entered a capital partnership with major French automaker Renault SA. Ghosn has been credited for turning the company around dramatically since then.

However, fears that the high-profile CEO and chairman was planning to merge Nissan into a much larger multinational motor alliance appeared to have fueled speculation regarding the future of the company.

It was reportedly argued within Prime Minister Shinzo Abe’s government that the automaker would no longer be recognizably Japanese.

The case has larger ramifications and the two governments have routinely become involved in discussions related to its future.

According to news reports, when Macron and Abe met in Buenos Aires, the French president asked that the Franco-Japanese alliance be maintained.

On being asked by Arab News Japan about reports of a prosecution team visiting Saudi Arabia and Oman, Hironaka confirmed that the visit indeed took place after Ghosn’s arrest.

“However, we have not been given any access to any information that they may or may not have gathered there,” he said.