Following the economic upheaval spurred by inflation and the rapid rise of fast-fashion competitors, Liberated Brands, the parent company of iconic surf and skate apparel labels including Billabong, Roxy, Quiksilver, and Volcom, has declared bankruptcy and announced it will be closing 120 stores across the U.S. and Canada. This substantial reduction reflects the challenging marketplace conditions and the company’s struggle to adapt to shifting consumer preferences.
According to recent filings, Liberated Brands has opted for Chapter 11 bankruptcy protection to undergo a financial restructuring. CEO Todd Hymel noted these difficulties stem from multiple pressures including high U.S. interest rates, persistent inflation, and the influx of competing brands such as Shein and Temu—a trend changing how and where consumers spend their money.
"The average consumer has shifted their spending away from discretionary products such as those offered by Liberated," Hymel stated, highlighting the dramatic shift toward low-cost, quickly available clothing from fast fashion outlets. He elaborated, "Consumers can cheaply, quickly, and easily order low-quality clothing garments from fast fashion powerhouses and have such goods delivered within days." This stark competition has squeezed the profit margins of traditional retailers who cannot compete on price.
The company faces notable challenges, including over $100 million in liabilities. To navigate this financial quagmire, it secured $35 million from JPMorgan Chase to help facilitate the bankruptcy process. These measures come after Liberated Brands relinquished its North American licenses for Billabong and RVCA at the end of 2022, after failing to meet royalty payments.
While the Luxuried Brands have seen their glory days, especially during the pandemic when revenues surged from $350 million to $422 million, the outlook has changed dramatically as consumers shifted behaviors post-COVID. The company expanded from 67 stores to 140 during this growth spurt, but the reliance on economic stability proved precarious as inflation and cost of living concerns began to dominate consumer sentiment.
Despite the waves of economic challenges, the brands themselves are unlikely to disappear completely. Authentic Brands Group, based out of New York and previously involved with Liberated Brands, has indicated they will be transitioning these brand licenses to new operators to maintain their market presence.
"The stores were overinflated and burdened with outdated and underperforming locations," said representatives from Authentic Brands. They conveyed their strategy involves selling the goods through specialty retailers and department stores to create more agile and resilient business models.
Messages on the U.S. websites for Billabong and Quiksilver have begun notifying customers about the cessation of gift cards and loyalty points, which will no longer be valid after February 16. There is still uncertainty surrounding the fate of the 18 Billabong and 13 Quiksilver stores operating in Australia, as the U.S. bankruptcy filing does not clarify if these international operations will be affected.
Remarkably, the closure of Liberated Brands’ stores adds to the continuing trend of significant retail shrinkage, with more than 15,000 U.S. stores anticipated to close in 2025. The economic turbulence affecting traditional retailers is evidenced globally—the fabric of the retail industry is noticeably shifting.
While store closures signify the end of one chapter, the distinct brands of Billabong, Roxy, Quiksilver, and Volcom have maintained their loyal followings since the 90s and 2000s as symbols of youth culture and free-spirited lifestyles. History shows these brands were once available at popular retailers such as PacSun and skateboard shops, but their evolutions will likely hinge on strategic decisions made by new license holders.
The financial struggles of Liberated Brands are indicative of wider shifts happening within the fashion industry. The rise of online shopping combined with the unyielding allure of fast-fashion chains continues to reshape consumer behavior and pose inherent challenges for brands seeking to maintain relevance.
The future of surf brands, both iconic and beloved, will now be viewed through the lens of innovation and adaptability as they seek to navigate the post-bankruptcy retail environment.