Derek O'Neill. Shop-eat-surf file photo.By TIFFANY MONTGOMERY - The Billabong Board of Directors replaced longtime Billabong top executive Derek O'Neill today with a retail expert. The board said Derek is leaving the company today after 20 years with the company.
His replacement, Launa Inman, formerly head of Target in Australia, starts May 14.
Derek O'Neill served as CEO since 2003. He had previous top management jobs with Billabong including leading European operations as general manager from 1992 to 2003.
Under his leadership as CEO, Billabong embarked on a rapid expansion acquiring several brands and retailers and transforming itself into a company with a large retail presence with 677 stores at the end of the December.
During his watch, Billabong purchased several top brands including RVCA, Nixon, Xcel, and Sector 9, and bought troubled retailer West 49. He also made a big online retail push with acquisitions of Swell.com in the U.S. and Surfstitch.com in Australia.
For the six months ended in December, retail sales accounted for 44% of total sales during the period, according to Billabong.
Derek was the architect of the retail strategy, and is now being replaced by someone with more retail experience.
Just after Billabong acquired several retailers, economic conditions took an unexpected downward turn in Australia and the normally stable European business grew more challenging due to the debt crisis and economic uncertainity in Europe.
Billabong, which is one of the largest apparel and retail companies in Australia, is watched very closely there and Billabong's stock has been under pressure and its debt load questioned.
The company recently fought off an unsolicited takeover bid by a U.S. private equity firm and sold more than 50% of Nixon for $285 million to pay down debt.
Billabong also announced that North America President Paul Naude, who is close to Derek, will remain on the board and will take on oversight of South America. His title will now be President of Americas with responsiblity for South America, the U.S. and Canada.
New CEO Inman was first brought on as a consultant two months ago to review Billabong's retail operations.
BILLABONG INTERNATIONAL APPOINTS LAUNA INMAN AS MANAGING DIRECTOR
GOLD COAST, 9 May 2012: Billabong International Limited (ABN 17 084 923 946) (the Company) today appointed Launa Inman as Managing Director and Chief Executive Officer.
Ms Inman, who starts on 14 May 2012, replaces Derek O’Neill who departs the company today.
Billabong Chairman Ted Kunkel said Ms Inman’s skills and depth of experience in retail, supply chain management, finance, strategic planning and brand marketing will be crucial to Billabong’s future growth.
Launa Inman. Photo courtesy of The Australian.
“Launa has proven leadership capabilities in managing and delivering results in challenging environments and uncertain times.”
Mr Kunkel said Ms Inman was one of the leading retail chief executives in Australia and would bring fresh perspective, energy and drive to the Billabong group.
“Launa’s appointment recognises the tremendous importance retail has assumed in our business.”
Ms Inman said: “Billabong owns a family of brands that are among some of most iconic in Australia and the world, and I’m thrilled to have the opportunity to work with the Company.
“We need to continue to drive our turnaround strategy, moving to a fully integrated operating model powered by the strength of our brands. The first priorities of the turnaround strategy will be to extract greater value from our retail network and strengthening supply chain management. This will provide the opportunity for Billabong’s family of brands to meet their full potential.”
Ms Inman has spent the past two months consulting with Billabong, following her retirement from Target Australia after seven years as Managing Director. Prior to Target, she was Managing Director of Officeworks, the largest stationery and office technology retailer in Australia. She is also a member of the Board of The Commonwealth Bank of Australia.
The board, has also announced Paul Naude´, currently head of North America will be appointed to the expanded role of President of the Americas, and will assume additional responsibility for the fast-growing South American market as well as the US and Canada. Mr Naude´ will continue to report to the CEO and will remain as an Executive Director on the board.
“Paul’s considerable experience and leadership role in the boardsports industry is very complementary to Launa’s extensive skill set,” Mr Kunkel said.
“The combination of Billabong’s iconic brands, developing retail capabilities and the depth of boardsports market knowledge across the senior executive team, provides us with a powerful foundation for future growth.”
Mr Kunkel said the board had decided that the company required new leadership and skill sets for the next stage of its development.
“Derek O’Neill has been with Billabong for more than 20 years and we thank him for his service and wish him all the best for the future,” he said.
Summary of Key Terms of the Employment Agreement appointing Launa Inman as Chief Executive Officer and Managing Director
Commencement Date: 14 May 2012
Term: Ongoing (i.e. no fixed term)
Total Fixed Remuneration: Initial TFR will be $1.3 million per annum. The first review of TFR will take place in June 2013 and annually thereafter.
TFR includes salary and superannuation.
Short Term Incentive: The amount of short term incentive payment in any year will be determined by the Board by assessment of performance against financial and non–financial targets set by the Board at the start of each financial year.
The short term incentive potential for any one performance year will be up to 100% of TFR.
Share Investment: Upon commencement, Ms Inman will receive a sign-on incentive in the amount of A$100,000. This amount will be used to acquire shares in the Company.
Long Term Incentive: Ms Inman will be eligible to participate in the Company’s Long Term Incentive arrangements. These arrangements are subject to receiving any required or appropriate shareholder approvals and the Company’s long term incentive arrangements.
For the financial year ending 30 June 2013, Ms Inman will be eligible to receive a long term incentive with a face value of $614,000.
For subsequent financial years, Ms Inman will be eligible to receive a long term incentive equivalent to a maximum face value of 47% of Total Fixed Remuneration, subject to terms and conditions decided by the Board.
Termination Provisions: In addition to accrued entitlement, on termination Ms Inman will receive benefits as follows:
Resignation: Ms Inman may terminate her employment at any time by giving Billabong International twelve (12) months written notice. Billabong International may elect to make a payment in lieu of the notice period.
Fundamental Change: If a Fundamental Change occurs, Ms Inman may terminate her employment without notice within thirty (30) days of becoming aware of the circumstances giving rise to that Fundamental change. In these circumstances Ms Inman will be entitled to a payment of twelve (12) months’ Total Fixed Remuneration.
Termination by Billabong: Billabong may terminate Ms Inman’s employment at any time by giving Ms Inman twelve (12) months’ written notice. Billabong may elect to make a payment in lieu of the notice period.
Termination without Notice: Billabong may terminate Ms Inman’s contract with immediate effect for cause (for example, for serious misconduct, negligence, breach of duty or agreement).
Relocation: Billabong has also agreed to pay reasonable expenses of Ms Inman involved in relocating from her current home in Melbourne, Victoria to Queensland to take up the role of Chief Executive Officer.