Ride The Wild Surf

This is a story of thrilling rides and punishing wipeouts. Of two mates running a small, backyard operation in Sydney’s Northern Beaches that grew into one of Australia’s largest online retailers, selling contemporary surf lifestyle and fashion brands.

By 2015 SurfStitch had listed on the ASX, by 2016 it boasted a market value of over $500 million, and by 2017 it was under voluntary administration.

Justin Hillberg joined the SurfStitch safari in late 2013 as Global Merchandising Manager, just as the company was preparing its IPO. He soon found himself in California, helping build the group's North American operation, before returning to take up his current position of SurfStitch General Manager Asia Pacific in mid-2015, at just 35.

They were exciting times as the group went on an acquisition frenzy, accumulating a rash of content providers, striving to exploit synergies and meld the group into a cohesive and prosperous operation.

Then the wave, perhaps inevitably, began closing out. The founding CEO suddenly bailed out, losses set in, disgruntled shareholders circled and class actions landed. ASIC began investigations, the share price collapsed and the stock was suspended. Finally the board decided to appoint administrators to effectively deal with the class actions and litigations, and restructure the group to preserve the most valuable asset, SurfStitch.com.

In April this year, SurfStitch was sold to private equity firm Alceon Group.

Inevitably, vendor relationships had been put under enormous pressure during all of this, resulting in restrictive terms of trading, an impaired inventory mix and mounting pressures on cash flow. But fortunately most of the negative publicity was confined to the business press with limited impact on the customer base.

So what did Justin learn from this maelstrom? And how has he managed to keep up to 70 staff at their Burleigh Heads HQ, and another 180 at their Coomera fulfilment centre, buoyant?

"The big thing I learned personally and we learned as a team was the importance of communication," says Justin. "I would get in front of the whole business every month as a minimum, and sometimes multiple times a month, to give them updates, however minor, to maintain a level of comfort for everyone."

There were other lessons Justin describes as 'super important': a positive attitude flowing from the top; the importance of effective teamwork, minimising the finger pointing and keeping everyone on the same page; celebrating the wins; fostering a positive response to the inexorable and increasing pace of change; making work a fun and vibrant environment to counteract the inevitable pressures and stress.

So with everything he's been through is Justin still optimistic about the future of SurfStitch?

"Absolutely! eCommerce is still a growing part of the retail landscape in Australia, technology is moving so quickly we’re constantly improving the shopping experience, and the surfing industry we operate in is really exciting with participation rates higher than ever."

He believes the sport's inclusion in the 2020 Olympics and the development of inland wave pools can only further increase its profile and popularity.

But despite online retailing in Australia currently increasing at a rate of 10%pa, the threat of a data-rich Amazon with an unprecedented ability to customise their messaging has a lot of people nervous.

Justin expects Amazon to focus on the big areas first, like general consumer goods, electronics and apparel in a less branded sense, with a proposition based on price, convenience and efficiency. Operations who rely on the same proposition will struggle to compete. Justin's advice is to carve out exactly what it is you stand for and so establish a meaningful difference from your competitors.

"Where eCommerce is having the best success is when the offering is able to really closely match the consumer demand, having almost one-on-one conversations with individual customers. Using technology and machine learning and Artificial Intelligence to programmatically put product assortments in front of customers based on what you know about them, and tell multiple product stories simultaneously to different prospects."

12 months ago, SurfStitch replatformed their website to make it more customer-centric and simpler to maintain on the back-end. It's a graphically attractive and engaging site with both branded and curated content like athlete interviews, educational stories and industry gossip to drive regular visitation. Underpinned by the easiest possible pathways for finding product and information and ultimate purchase.

About the same time, Justin joined The CEO Institute. He was fairly new to the GM role and knee-deep in constant change. Here he was able to talk freely about the challenges he faced and found a genuine empathy from colleagues who understood and could offer informed support, something he couldn't get internally.

"It allows me to reset once a month and I find it really valuable," says Justin.

"Plus our super-experienced Chairman (Brian Finn) really helped with invaluable one-on-one advice at a time when we were going through some pretty political boardroom battles!"


With new owners, and an unsinkable belief in his product, Justin is ready for the next wave.


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