Quiksilver: is the empire falling? | Photo: Will/Creative Commons

Surfwear giant Quiksilver Inc. has filed for bankruptcy in the United States. Global asset management firm Oaktree Capital Management is taking over.

Quiksilver has always been one of the most prestigious surf brands on the planet.

It is part of the surf culture, and its name is written on the most relevant pages of competitive surfing history.

Quiksilver is - or was - one of the "Big Four," which included Rip Curl, O'Neill, and Billabong.

But the Huntington Beach-based firm is in trouble. Quiksilver announced it commenced "voluntary proceedings for relief under Chapter 11 of the United States Bankruptcy Code."

In other words, the surf brand founded in 1969 has a large debt (more than $826 million) and mediocre sales.

"With the protections afforded by the Bankruptcy Code and the financing provided by Oaktree, we will not only be able to satisfy our ongoing obligations to customers, vendors, and employees, but we will also have the flexibility needed to complete the turnaround of our US operations and re-establish Quiksilver as the leader in the action sports industry," notes Pierre Agnes, CEO of Quiksilver.

$175 Million to Stay Afloat

As a result, Oaktree Capital Management will inject $175 million in Quiksilver to keep the surfboard afloat.

Additionally, the new executives will initiate a profound restructuring of the firm, which has roughly 700 stores.

Quiksilver will "continue its existing store closing program to rationalize its store base in the Americas."

Quiksilver's US branch will continue to "make wage and salary payments, various benefits for employees, and honor certain customer programs, such as gift cards and returns on merchandise purchased prior to the bankruptcy filing."

The Asian and European branches under the Quiksilver insignia are not affected by the bankruptcy.

Simultaneously, Billabong director Matthew Wilson announced his resignation due to a potential conflict in Oaktree's investment portfolio.

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