Billabong International Ltd. (BBG) said its 40-year-old surf brand was worthless after the company’s losses tripled amid store closures, firings and a breach of debt terms. The stock fell the most in almost three weeks. 
 
 Founded by Gordon Merchant in 1973, Billabong helped sell Australian surfing culture worldwide and rose to a market value of A$3.84 billion ($3.45 billion) at its peak in 2007. Earnings have plummeted in the last two years as competitors including Abercrombie & Fitch Co. (ANF) stole market share and Billabong took on debt to build a store network that it’s now shrinking. 
 
 “It probably isn’t cool any more for the youth of today to wear Billabong,” Todd Guyot, an analyst at Moelis & Co. in Sydney, said by telephone. “You can see how much the core business has deteriorated over the last few years. There’s still a massive challenge to get the business going right.” 
 
 The Gold Coast, Australia-based company has closed 158 stores, canceled relationships with three-quarters of its suppliers, and is cutting 15 percent of jobs in its European division. 
 
 The value of its 13 brands fell to A$90 million at the end of June from A$614 million in December 2011, and the Billabong label itself is worthless, the company said in its financial statements today. About A$37 million of group brand value was locked up in the DaKine outdoor clothing and backpack label which Billabong sold to Altamont last month. 
 
 Photographer:Dan Himbrechts/Bloomberg A shopper walks past a Billabong International Ltd. store in Sydney. Close A shopper walks past a Billabong International Ltd. store in Sydney. Close Open Photographer:Dan Himbrechts/Bloomberg A shopper walks past a Billabong International Ltd. store in Sydney. 
 
 Shares Drop 
 
 Four other brands, including Element skateboards and Palmers surfboard accessories, were also written down to a zero valuation, according to the statements. 
 
 Full-year losses widened to A$860 million in the year ended June from a A$276 million loss in the previous 12 months, compared to the A$547 million average loss expected from four analysts surveyed by Bloomberg. A 14 percent fall in sales put revenue below the company’s operating costs and the company took a loan from Altamont Capital Partners to refinance its debt. 
 
 The stock dropped 5.3 percent to close at 53.5 cents in Sydney, the lowest level since Aug. 7. Billabong has lost 36 percent this year, compared with an 11 percent gain for the S&P/ASX 200 index. 
 
 ‘Tumultuous Year’ 
 
 Billabong’s net tangible assets fell 86 percent during the year to 11 Australian cents per share, it said today. 
 
 The company has agreed to a $294 million refinancing deal with a group led by Altamont Capital Partners and is studying a rival offer from a group including Oaktree Capital Management LP and Centerbridge Partners LP. The Oaktree and Centerbridge proposal would save Billabong as much as A$143 million in interest over five years, according to that group. 
 
 Photographer:Dan Himbrechts/Bloomberg Customer are seen through the Billabong International Ltd. logo as they walk down a flight of stairs at a store in Sydney. Close Customer are seen through the Billabong International Ltd. logo as they walk down a... Read More Close Open Photographer:Dan Himbrechts/Bloomberg Customer are seen through the Billabong International Ltd. logo as they walk down a flight of stairs at a store in Sydney. 
 
 The prospect of refinancing and better business in recent weeks suggest the company is on the road to recovery, Peter Myers, acting chief executive officer, told an investor call after the results announcement. It has “clearly been a tumultuous year,” he said. 
 
 The company has been been fielding takeover or refinancing proposals for all but five weeks of the time since Launa Inman took over as chief executive officer in May 2012. Inman stepped down this month and the company appointedMyers as acting CEO until discussions about former Oakley Inc. chairman Scott Olivet assuming the role are finalized. 
 
 European Losses 
 
 The business spent A$23 million during the year on consulting and banking costs in relation to its takeover and refinancing proposals, greater than the value of its earnings before interest and tax. 
 
 Olivet hasn’t taken up the CEO role because he wouldn’t want the job if the Oaktree and Centerbridge offer succeeds, Myers said. 
 
 Some factors relating to the Oaktree and Centerbridge bid are “yet to be clarified”, Myers said. 
 
 Losses in Billabong’s European division meant the company’s business costs ran higher than its sales revenue, with the group making a A$1.9 million loss before interest, tax, depreciation and amortization. 
 
 Discounting one-time items, Ebitda was A$73 million over the full year, beating the A$70 million average of eight analyst estimates and at the top end of a A$67 million to A$74 million range Billabong forecast June 4. 
 
 Net Debt 
 
 Adjusted Ebitda in the Americas division came to A$20 million and A$4.4 million in Australasia, overwhelmed by A$25 million of Ebitda losses in Europe. Sales fell 8.5 percent in Europe after adjusting for the effects of currency movements, dropped 5.6 percent in the Americas and 5 percent in Australasia 
 
 The company has been experiencing “continued difficult trading conditions, particularly in Europe,” Michael Simotas, an analyst at Deutsche Bank AG in Sydney, wrote in a note to clients Aug. 7. In Billabong’s home market, “consumer sentiment continued to weaken and warm weather weighed on winter apparel sales,” he wrote. 
 
 Net debt rose 28 percent to A$207 million over the course of the year and operating income excluding one-time items dropped 51 percent to A$22 million, enough to cover Billabong’s interest payments just 1.7 times. 
 
 Billabong has A$325.6 million of loans maturing by the end of this year, according to data compiled by Bloomberg. The company doesn’t have any bonds outstanding and hasn’t sold notes in the past, the data show. 
 
 Net losses of A$1.14 billion over the past 24 months were greater than the A$1.11 billion in profit that the company posted over the preceding eight years, according to data compiled by Bloomberg. 
 
 Since Billabong listed in 2001 with a market value of A$600 million, the net A$781 million it’s raised from selling shares to finance its operations is nearly five times the A$160 million its earned for shareholders as net income, according to data compiled by Bloomberg. 
 
 To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net 
 
 To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net 

 Image caption Billabong sponsors surfing events and competitors 
 
 The Australian surfwear brand Billabong has reported much worse than expected results as it continues to try to refinance its debt. 
 
 It reported a net loss of A$859.5m ($777.8m; £495.1m) for the year ending 30 June, compared with a loss of A$275.6m a year ago. 
 
 It has written off the value of many of its brands, including cutting the value of the Billabong brand to zero. 
 
 Its shares fell as much as 15%, having lost more than 60% in the past year. 
 
 Billabong has been struggling to maintain sales in key markets such as the US and Europe. 
 
 "They have had an absolutely ginormous writedown, and that's the only way that you can describe it," said IG Markets analyst Evan Lucas. 
 
 The firm has also been in financial trouble after an international expansion loaded the company with debt. 
 
 Billabong rejected an A$850m takeover bid from private equity firm TPG Capital Management early last year, which valued the shares at A$3.50 each. The shares ended the day at 53.5 cents. 
 
 Restructuring exercise 
 
 Chairman Ian Pollard said the year had been "the most challenging period in the company's history". 
 
 The firm, which is also facing weaker trading in its home market, Australia, has taken various steps in an attempt to revive its business. 
 
 It has closed 158 of the stores it describes as under-performing, sold the DaKine brand and all but withdrawn from its Nixon joint venture. 
 
 It is also in the process of replacing its chief executive, with an interim boss in place while it finalises the appointment of former Oakley chairman Scott Olivet. 
 
 It is also considering rival proposals to refinance its debt from two private equity firms. 
 
 "We are nearing the end of a long process that has caused distraction, impacted on staff morale and has been very costly," Mr Pollard said. 
 
 "The company looks forward to refocusing, reinvigorating its brands and rebuilding the business on a solid, long term financial footing."
– Bust out the "wipeout" surfing analogies for Billabong: The Aussie surfwear brand had been valued at $3.5 billion as recently as 2007. Today? It is literally worthless. The 40-year-old company reported a net loss of $772 million for the fiscal year and wrote down the value of the Billabong label to zero, reports the BBC. The company's been teetering under huge debt following an oh-so-optimistic attempt at international expansion—as seen by the closing of 158 stores worldwide. “It probably isn’t cool any more for the youth of today to wear Billabong,” an analyst in Sydney tells Bloomberg. “You can see how much the core business has deteriorated over the last few years. There’s still a massive challenge to get the business going right.” The company is considering deals from private equity groups, but in terms of financial worth, it's now pretty much back to its humble roots—the kitchen of its surfer-founder, Gordon Merchant, notes the Age.