Surfstitch eyes asset sales as costs mount
Embattled online sport clothing retailer Surfstitch is looking at selling assets as costs mount from several legal proceedings and an investigation by ASIC.
Surfstitch says it is exploring the option of selling media and other assets as it deals with an ongoing court case with Crown Financial group, two class actions and a continuing ASIC investigation.
In a statement on Thursday Surfstitch said the matters "continue to affect the listed entity and impact its cash position".
While the situation did not prevent the company's retail business remaining viable, "the position of the SRF group is being closely monitored", the company said.
Surfstitch owns websites surf and entertainment media websites magicseaweed.com and stabmag.com.
It sold garageentertainment.com.au to media group Madman Entertainment in April.
The Crown Financial ligitation relates to a dispute over purported contracts between members of the Surfstitch group and entities in the Crown Financial group relating to content and branding agreements.
The retailer on Thursday said it has sought, and continues to seek, the possibility of settlement of all legal proceedings, but has so far not been successful.
"The company is working steadily to stem losses within the business, improve the key underlying retail business operations and deal with the litigation challenges in an orderly fashion," the statement said.
Crown Financial, which has a more than five per cent stake in the retailer, has previously called for an extraordinary general meeting to vote on removing Surfstitch's chair Sam Weiss from the board.
The retailer on Thursday urged shareholders to vote against the resolution, saying that the removal of Mr Weiss from the board is not in the best interests of the company.
Surfstitch went into a trading halt in late May following the launch of the potential $100 million class action by shareholders.
The company last traded at 6.88 cents a share, significantly lower than its peak of $1.90 a share in December, 2015, and is expected to resume trade when it reports its full-year results in August.
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