Business of Fashion

Quiksilver Turned a Page That Led to Chapter 11

Quiksilver, Inc. is one of the world’s leading outdoor sports lifestyle companies. It is interesting that during a time when the U.S. retail athletic apparel market is soaring, actual participation in sports continues to sink.

Quicksilver U.S. headquarters

Quiksilver is the latest in a line of apparel retailers seeking refuge in Chapter 11.

Quiksilver background

Founded in 1976, the California company started by making shorts for surfers through a licensing agreement with the Quiksilver brand that already existed in Australia. The firm later incorporated in Delaware, went public in 1986, and grew into an icon in the extreme sports space with brands like Quiksilver, Roxy, and DC.

The Company’s apparel and footwear brands represent a casual lifestyle for people who connect with its active lifestyle heritage.

Quiksilver’s products are sold in more than 100 countries in a wide range of distribution outlets. The Company’s global corporate headquarters are located in Huntington Beach, California, with its operational base in Saint-Jean-de-Luz, France.

Quiksilver’s Chapter 11 decision

Quiksilver implemented a management shakeup in March and formed a strategic review committee to explore ways to rework its balance sheet.

To secure its future existence, Quiksilver chose to file for Chapter 11 protection. The company listed roughly $850 million in long-term debt. Quiksilver’s plan is to hand over a controlling stake in the company to major lender Oaktree Capital Management LP.

Under the plan support agreement, Quiksilver’s U.S. secured notes, more than 70-percent of which are held by Oaktree, would be converted into equity in a reorganized company.

Quiksilver’s guaranties of roughly $225 million in European notes would be reinstated and unsecured creditors would get a recovery of at least $7.5 million, subject to the resolution of intercreditor disputes.

The company’s European and Asia-Pacific businesses remain healthy and are not part of the fashion company’s Chapter 11 filing.

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