SurfStitch has appointed two CEOs as the former chief works on a takeover

SurfStitch has appointed co-founder Lex Pedersen and Europe head Justin Stone as joint CEOs after the sudden departure of another co-founder, Justin Cameron.

Cameron is working with a private equity group on a potential acquisition of the online retailer of surf clothing.

His friend Pedersen is currently managing director and president of SWELL, one of the company’s online retail sites, and has held a number of senior management roles since co-founding SurfStitch in 2007.

A short time ago, Surfstitch shares were down 1.6% to $1.35. Any takeover bid would have to be in the region of $2 a share, near the $2.07 high and at the same level of a capital raising in November.

Pedersen said: “I am excited by the opportunity to take SurfStitch to the next level. We are both incredibly passionate about the business and are committed to executing the company’s strategy, driving innovation for our customers and delivering value for our shareholders.”

Stone, the other newly appointed joint CEO, is currently managing director, Europe, SurfStitch’s largest geography by revenue and was the founder of Surfdome, a UK-based online clothing store.

Chairman Howard McDonald said: “We are confident that Lex and Justin are the right combination to lead the business into the next phase of its profitable growth strategy.”

The company hasn’t yet received a proposal on any potential acquisition. “There is no certainty that any proposal or approach from any party may be forthcoming,” McDonald said.

Pedersen and Stone aren’t being paid any extra to be joint CEOs.

The company was formed by Cameron and Pedersen eight years ago. Pedersen ran Surfection, the surfwear shops, and Cameron was an investment banker and research analyst at Credit Suisse.

SurfStitch is on a growth program, not paying dividends as it builds its market share and expands into content-related businesses.

The company wants to be the Netflix and Amazon of extreme sports, the centre of a digital ecosystem around the surf and action sports lifestyle.

In its latest half year results, revenue was up 40% to $144.9 million and profit $5.7 million as it reinvests its cash. Revenue from North America was up 63% to $24.1 million.

The company is forecasting continued strong double digit revenue growth.

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