Quicksilver filed for bankruptcy today amid mounting debt and declining sales. As part of the filing, it will give control of the company to Oaktree Capital for a debt-to-equity swap roughly to the tune of $280 million.
For those unfamiliar with the brand, Quicksilver started out as an Aussie surfer brand riding the wave, so to speak, of the surfing craze of the late ‘60s. As it moved into the US market in the ‘70s, it primarily made surfing shorts. As board sports grew in the US and around the world, so did Quicksilver’s scope with line extensions into casual and snowboard wear. On its surface it seems like a very natural progression for a typical company – capitalize on a market opportunity and grow the business.
What the Quicksilver brand once meant.
However, Quicksilver as a brand was never meant to be a typical company. To understand why the company failed, you first have to understand why the brand failed. As Quicksilver began, it was laser focused on a niche. The members of that niche (surfers) viewed themselves as counter culture and outsiders not bound to the norms of the suit and tie society. At first, that is exactly what Quicksilver was: counter culture, outside the norm and aspirational to those in the know.
The decision to grow Quicksilver was in direct opposition to the fabric of its brand. Quicksilver ceased to be cool once it could be found in a department store. The business of Quicksilver’s brand – cool, counter culture, surfer brand – fought with the business of Quicksilver’s business that wanted to get in as many retail locations as possible with standardized product lines. The dissonance between the two not only created confusion but ultimately created a backlash as its once loyal customer base went to other brands that were more reflective of who they believed they are.
It’s a funny thing with companies sometimes. Not all are meant to grow and be household names. The power of brands is in their ability to clearly tell people who they are for and, more importantly, who they are not for. With the now bankrupt Quicksilver, once it started growing, all it did was tell the surfers that the brand was no longer for them. Wipe out.