SurfStitch woes continue
SurfStitch has undergone an executive shake up following dismal predictions of an $18 million loss this year - the second profit downgrade in two months.
Mike Sonand has been appointed to the role of CEO with the current chief executives Lex Pedersen and Justin Stone shifting to other aspects of the business.
Pedersen will assume the position of business development director while Stone will take on the role of global support director.
SurfStitch has flagged challenging trading conditions in key markets and lacklustre integration of its content subsidiaries Garage Entertainment, Rolling Youth and MagicSeaweed.
The company has also actioned an amendment of a license agreement to a third part to access company content.
“The transaction related to the grant of a perpetual licence to a third party to use the Company’s content contained in its subsidiaries – SurfStitch, Garage Entertainment, Rolling Youth and MagicSeaweed.
"In 2H FY2016, the Company entered into a set of agreements with the same party effective 15 March 2016 for the provision of various services including access to software and hosting the SurfStitch online store, and which extended the payment terms of the perpetual licence agreement.
“An indepth review of the business has been undertaken including these subsequent contracts.”
It is believed that as a result of the contract amendment $20.3 million of revenue will be reversed in SurfStitch's full year results.
Sonand said that he is hopeful that the business will return to profitability in the next financial year following his appointment to the business.”
“I am very excited to be given the opportunity to lead the SurfStitch Group, a highly innovative business with an engaged and talented team.
“There are both major opportunities and challenges and one of my first priorities is to establish an operating and management framework, which Lex ’s and Justin’s new positions are a part of, that I believe will restore the business to a position of strength.
“I am fully focused on rebuilding value for shareholders.”
Sonand is the former CEO of M Webster Holdings and Globe International.