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Billabong drops in on Kirra Surf
23 May 2008, Nick Nichols, Gold Coast Bulletin

SURFWEAR giant Billabong has bought iconic Gold Coast retailer Kirra Surf in a deal that underpins a major expansion of the company's international headquarters at Burleigh.

But for Kirra Surf founder Peter Turner, the deal marks an end to a 30-year link with a business that has almost tracked the timeline of Gordon Merchant's success with Billabong, founded just four years earlier in 1973.

The Kirra Surf buyout, which settled last week, comes on the heels of Billabong adding 5000sqm of office space to its Burleigh headquarters as it plans to consolidate most of its 450 Gold Coast staff under one roof.

The three-level expansion, equivalent to the construction of a modest office building, is being absorbed under roof in the company's cavernous rear warehouse facility and will eventually see 100 Billabong staff now located at Varsity Lakes move to Burleigh.

The company will retain about 100 staff at its Gaven distribution centre.

Billabong chief executive Derek O'Neil was not available for comment yesterday, but a company spokesman said the move would 'enhance efficiencies and consolidate the area's place as a home to region's boardsports industry'.

He said the Kirra Surf purchase was a key plank in that plan, with the existing storefront at Burleigh proving inadequate to cater for the group's expanded brand portfolio.

"The store at the front of the group's international headquarters at Burleigh Heads was built about 10 years ago and is now too small to showcase all of the group's brands and ranges," said the spokesman.

"Kirra Surf presents a one-off opportunity to allow the group to showcase its entire range in Billabong's international home market."

The price paid for Kirra Surf has not been disclosed, and Billabong said it had yet to firm up costings for the new store which is expected to be opened towards the end of this year.

While Mr Turner has decided to move on from the business, his Kirra Surf partner of 20 years, Paul Jackson, will stay on to manage it for Billabong.

Mr Turner said Kirra Surf, long renowned as a 'surfing hardware' provider, was destined to become 'the best surf shop in the world'.

Billabong, whose range includes Element, Von Zipper, Xcel and Tigerlily, is planning to have third-party brands within the store as well.

The new Kirra Surf will occupy 2300sqm at the base of the $95 million Kirra Surf Apartments, a 12-level mixed-use project being undertaken by financial services giant Macquarie Group and construction company Parkview.

The apartment project, which is nearing completion, is located on a 7000sqm site bounded by Musgrave, South and Winston streets.

Kirra Beach Gold, a company controlled by Macquarie, paid interests associated with Mr Turner and Mr Jackson a total of $16 million for the amalgamated site in 2005.

The deal is understood to have included ownership of the shop freehold in the development by Mr Turner and Mr Jackson.

Billabong is understood to have assumed a five-year lease for the Kirra Surf premises plus option, although the rental rate has not been disclosed.

It will be joined by Cafe Le Monde restaurant which has taken a 414sqm tenancy in the building.

Kirra Beach Apartments is topped off by two penthouses valued at $2.9 million.

Mr Turner has bought a sub-penthouse in the building.