Matthew Perrin, the most successful corporate raider in the history of the surf industry

Phil Jarratt
Swellnet Dispatch

Matthew Perrin has been all over the news this week following a fraud case on the Gold Coast. The news coverage often includes references to Perrin's time at Billabong. But what was his role there? It's all a little mysterious.

In this extract from 'Salts and Suits' Phil Jarratt decribes Matthew Perrin's dubious entry into the surfing world and his head-spinnin', cash-grabbin' exit from it.

The second problem facing Billabong was even more wide-reaching and more insidious. Something big was going on and only Gordon Merchant seemed to know what it was. [Bob] Hurley had already felt it when he declined the license for Billabong Girls and Merchant set up his own operation in San Francisco. The wagons seemed to be circling even more when Doug Spong was granted the girl's license for Canada, but Spong, like most of the other Australia-based executives, wasn't sure what was going on either. The mystery deepened when Billabong's management team gathered at the Huntington Hilton in California for their annual global meeting. Billabong had become a big company, but not so big that the top brass didn't know each other. So who where those two tall guys lurking in the shadows and looking uncomfortable in Billabong beachwear right out of the box?

As it turned out, they were the Perrin brothers, Matthew and Scott, Gold Coast property developers, lawyers and racetrack touts who had been brought into the Billabong inner sanctum by Colette Paull, the long-time personal assistant to both Rena and Gordon Merchant. Paull approached the Perrin's initially because Billabong had run out of warehouse space, and they patched together an $11 million real estate package at Burleigh Heads. But the Perrins, who were known as aggressive deal-makers, had their eyes on a bigger prize.

It had been widely known for several years that Rena Merchant wanted to get out. Long after the Merchant marriage ended, Rena felt uncomfortable in the business relationship. According to one insider, she would sometimes surround herself with crystals at board meetings to protect her from 'Gordon's bad vibes'. After helping arrange finance in the US for Gordon Merchant's rebirth of the Billabong operation as a wholly owned division, the Perrin's turned their attention to Rena's forty-nine per cent stakeholding in the fastest growing surf company in the world.

In a rare interview with BRW magazine in 2004, Rena Merchant denied that she was stalked by the Perrin's, or that there was any pressure on her to sell. "Billabong had become a numbers game and I didn't want any part of it," she said. A consortium led by the Perrin brothers and including former Qantas chairman Gary Pemberton bought Rena's shareholding in late 1998 for $26.4 million, a figure Rena has steadfastly refused to confirm. After twenty-five years of hard work, she walked away to build a sustainable golf course near Noosa, giving a one percent holding to Collette Paull to prevent the Perrin bloc from gaining majority control. Billabong general manager Greg Woods, who was squeezed out soon after, told BRW: 'Rena was stitched up.'

Another Billabong heavy feeling the pinch was Doug Spong, whose licensed accesories division was a huge money-spinner for the brand. Spong suddenly felt himself an outsider. At a company meeting at the Sheraton hotel in Noosa, Spong was completely ignored by both the Perrin's and Pemberton. Outside the meeting, Scott Perrin came up to him in the carpark and said, "We'll get around to dealing with you in a couple of months. Until then, carry on as normal."

Spong soon realised what was afoot. No-one would admit it, but Billabong was centralising ownership in preparation for floating the company on the stockmarket. It was the end of the nineties, greed was still good, the dotcom bubble hadn't burst yet, IPOs were making new millionaires every other week, and if the Y2K bug didn't kill everyone, the future was rosy. The family, the surfing cowboys, the trusted retainers, the old salts....they all had to go to make way for the masters of the universe. And when Billabong's ducks were all in a row, the public would be invited to play and the A-team would make a shitload. Doug Spong eventually sold Thin Air, the accesories license, for $28 million, most of it in company shares at $2.30 which made him a very rich man after the succesful float. But not in comparison to the Perrin's, who would become the most succesful corporate raiders in the history of the surf industry.

In 2000, Billabong announced a $295 million float, debuting on the Sydney Stock Exchange later that year with spectacular results, soon achieving $500 million market capitalisation and sending Gorden Merchant's personal wealth into the stratosphere. Soon after the float it was valued at $255 million; by 2004, BRW estimated it at $491 million.

After the succesful float of Billabong, the Perrin's had become seriously rich, entering BRW magazine's 'Rich 200 List', alongside Gordon Merchant (the richest man in surfing), Quiksilver's [John] Green and [Alan] Law, Rip Curl's [Doug] Warbrick and [Brian] Singer, and Globe's Hill brothers, who were suddenly making a mint on surf and skate. The BRW 200 was an elite club, and some of the members were destined to be temporary, but for Matthew and Scott Perrin to be so rich so soon, on the back of Billabong, did not sit well with many people who had devoted their lives to the industry.

"I picked them for raiders the first fucking day," said Doug Spong. He was right. For two years, Matthew Perrin, aged just twenty-eight at the float, guided Billabong into better corporate governance, better financial reporting and better all-round performance. Despite the fact that he knew nothing about surfing he was potentially a great corporate leader for the brand. But Matt Perrin and his brother Scott liked fast cars, fast horses and fast money. From the day they came in, they were on their way out. In fact Scott Perrin took his profit and left before the float.

In January 2003, without consulting his board, Billabong CEO Matthew Perrin dumped eight million of his company's shares, realising more than $66 million in cash, causing the stock price to drop more than two dollars and prompting an Australian Stock Exchange investigation. While Billabong was still in recovery mode, with Perrin long departed, he sold his final five million stock, at a somewhat reduced price, but adding considerably to his wealth.

In the context of the plundering of Wall Street that was going on in the first few years of the new century, it hardly even rated, but the surf world was rocked, and rightly. The Perrins had been on a mission - to infiltrate surf, pick its bones dry and get the hell out of Dodge.

Extract courtesy of Phil Jarratt and Hardie Grant. 'Salts and Suits' comes with a double thumbs up recommendation from Swellnet. You can buy it here.

Comments

tonybarber's picture
tonybarber's picture
tonybarber commented Wednesday, 21 Dec 2016 at 3:02pm

Good to see the back of them. Greed got him in the end.

stunet's picture
stunet's picture
stunet commented Wednesday, 21 Dec 2016 at 3:05pm

Reckon it might have got him in the beginning too.

zenagain's picture
zenagain's picture
zenagain commented Wednesday, 21 Dec 2016 at 4:10pm

I try not to say bad things about people in general but I sincerely hope this pole smoker goes to jail. Him and his dodgy bro.

I'll reserve judgment but I'm quite sure the wife isn't as squeaky clean as she portrays either.

Watashi wa metabo oyagi desu.

udo's picture
udo's picture
udo commented Wednesday, 21 Dec 2016 at 4:19pm

I think he's sitting in a cell right now zen awaiting sentencing ..max sentence is 12 yrs for this....and the wife now sells real estate

zenagain's picture
zenagain's picture
zenagain commented Wednesday, 21 Dec 2016 at 4:20pm

He'll be out in year Udo, re-aquaint himself with his dodgy wife and join his bro in Victoria where they'll cook up their next scheme to defraud normal people of millions.

These fuckers are insatiable.

Watashi wa metabo oyagi desu.

memlasurf's picture
memlasurf's picture
memlasurf commented Wednesday, 21 Dec 2016 at 4:49pm

No Zen his wife is really pissed off and she spilt some of the beans I think. Never underestimate a wife who has been seriously wronged by the hubby. She will be out for his nuts as she said losing the house was worse than him having an affair.

zenagain's picture
zenagain's picture
zenagain commented Wednesday, 21 Dec 2016 at 5:43pm

Mem, I'll bet you a steak dinner there is no way in the world that she was unaware of/olivious to his 'improprieties'.

Watashi wa metabo oyagi desu.

Over60yrs's picture
Over60yrs's picture
Over60yrs commented Wednesday, 21 Dec 2016 at 5:07pm

Well the wife was the star witness against him in the just finished fraud case - and true to his arrogance (and greed) he pleaded not guilty all the way to the end (always claiming his wife knew he was forging her signature). That not guilty plea won't go well with the judge and he is currently in a cell awaiting the sentence.

He seemed to lose all his money buying up supermarkets in China so obviously not as smart as he think he is.

udo's picture
udo's picture
udo commented Wednesday, 21 Dec 2016 at 6:05pm

Nicoles doing ok 5mill of real estate sales this year

zenagain's picture
zenagain's picture
zenagain commented Wednesday, 21 Dec 2016 at 6:09pm

Scott Perrin's Albatross Ave house on the market for $29 mil.

Watashi wa metabo oyagi desu.

thermalben's picture
thermalben's picture
thermalben commented Wednesday, 21 Dec 2016 at 7:07pm

Jeez, and here's me thinking I'm a little fancy choosing stainless steel screws for my front deck instead of galvanised nails.

memlasurf's picture
memlasurf's picture
memlasurf commented Wednesday, 21 Dec 2016 at 7:16pm

Ben I hope you got those wiz bang self drilling and countersinking. Makes life very easy.

thermalben's picture
thermalben's picture
thermalben commented Wednesday, 21 Dec 2016 at 7:36pm

Does "self drilling" mean they supply a tradie to do the work? That would make my day.

memlasurf's picture
memlasurf's picture
memlasurf commented Thursday, 22 Dec 2016 at 9:42am

Ha ,that would be a breakthrough. They are real quick though just get a rattle gun from Bunnings with the fitting for them and it is quick and easy even moi bush carpenter.

Lanky Dean's picture
Lanky Dean's picture
Lanky Dean commented Monday, 2 Jan 2017 at 9:36am

Smart choice , Especially if you live close or relatively close to the coast.

joanne-henstridge's picture
joanne-henstridge's picture
joanne-henstridge commented Wednesday, 21 Dec 2016 at 6:51pm

KARMA

Sheepdog's picture
Sheepdog's picture
Sheepdog commented Wednesday, 21 Dec 2016 at 7:24pm

"Matthew Perrin, the most successful corporate raider in the history of the surf industry"

Well he aint that fuckn "successful" now, is he....... pmsl

Sheepdog

crg's picture
crg's picture
crg commented Wednesday, 21 Dec 2016 at 7:37pm

Just to get a little tabloid for you...

After the marriage split Perrin had an affair with a local lawyers gold digger wife...the lawyer then took up with the ex Nicole...yep a straight wife swap...

Jail or not he's more worried about Chinese retribution...his life has been threatened more than once from those parts...

I'm not cheap,
But I'm free.

oiley's picture
oiley's picture
oiley commented Thursday, 22 Dec 2016 at 9:05am

The surf industry would have been alot better off without greedy people wanting to get filthy rich and not caring if they trash their brand.. zero integrity was displayed by everyone who agreed to the IPO, not just Perrin

h_b_bear's picture
h_b_bear's picture
h_b_bear commented Thursday, 22 Dec 2016 at 11:01am

Perrin as CEO dumping his entire BBG stock without informing the Board is still one of the most extraordinary things I have seen from an ASX company. Clearly didn't give a rats arse as he would never work in a listed company after that. Merchant has been the author of many of the BBG mis-steps as well. The market loves these fast growth companies, puts values on them that require faster and longer growth than they can ever sustain and then they blow themselves up trying. BBG was just another example.

tootr's picture
tootr's picture
tootr commented Thursday, 22 Dec 2016 at 1:53pm

Surfstitch anyone?

R JH.'s picture
R JH.'s picture
R JH. commented Thursday, 22 Dec 2016 at 11:41am

This is the story of a man called Merchant being dudded by a probably cryto Happy Merchant.

blindboy's picture
blindboy's picture
blindboy commented Thursday, 22 Dec 2016 at 12:09pm

Did anyone who made lots of money from the surf clothing boom end up happy? Maybe they were just miserable bastards anyway but, from my observations, the money and power ruined their judgement as to what the most important things in their lives actually were. Cocaine, first class travel, luxury hotels, lots of yes men (and women). It takes a stronger character than most of them apparently possessed to come through that with your sanity.
There was a point back there in the late seventies when the surf industry got ahead of the cultural trend towards "greed is good" and a really clear line developed between those who were motivated by riding waves and those who were motivated by money. Some sat on the line but they were soon pushed out by the carpetbaggers. A plague on all their houses!

Laurie McGinness

tonybarber's picture
tonybarber's picture
tonybarber commented Thursday, 22 Dec 2016 at 12:51pm

BB, it is difficult to define 'happy' but from this angle I would say many lived and worked in an industry which was their passion. The Rip curl blokes had fun, surfed, skied their arses off. Merchant chased waves around the globe. Many saw the need, the opportunity and the creative side but I don't believe they were driven by greed. 'Greed' and 'profit' are too seperate entities. Perrin was the former.

blindboy's picture
blindboy's picture
blindboy commented Thursday, 22 Dec 2016 at 12:56pm

I could name some other names there tb, as for "the need" what was that? To sell prodigious amounts of surf clothing to non-surfers? How was that ever a need?

Laurie McGinness

tonybarber's picture
tonybarber's picture
tonybarber commented Thursday, 22 Dec 2016 at 1:05pm

Yes, granted. What I meant by need was that there were no wetsuits, there were no board shorts, T shirts and clothing that identified you as a surfer. Just as the Californians took to Levi jeans, we also created and made our own style. The paradox was that when a brand did go mass market, it was soon dead. Somehow, these guys avoided that. Maybe non surfers wanted to be 'surfers'.

Phil Jarratt's picture
Phil Jarratt's picture
Phil Jarratt commented Thursday, 22 Dec 2016 at 5:07pm

Jeez, BB, you're not one of them commie schoolteachers polluting our kids, are you?? If there is a perceived market, an entrepreneur will strive to fill it. Nothing wrong with that. There was and still is a decent, honourable living to be made in the surf industry, and the vast majority of surf-workers do not deserve to be tarnished by the sins of the few. I just wish a few of those smart-arse, tight-jeans young marketing wizards who spend most of their day out the back in the company skate-park would return my calls! And as far as you go, BB, glad to see you're still a warrior saint. Have a happy festive, mate.

Phil Jarratt

blindboy's picture
blindboy's picture
blindboy commented Thursday, 22 Dec 2016 at 5:30pm

All the best Phil, we always had different views about the industry and chose our directions accordingly. Me? I just could never understand the attraction of the rag trade. More power to the board manufacturers and those who work in the genuine surf industry. Clothes nyah! Selling board shorts to bastards in Berlin and t-shirts to twerps in Texas........well if you like that kind of thing. And yeh I am still corrupting our youth with notions of fairness and equity against the spirit of the age.

Laurie McGinness

Phil Jarratt's picture
Phil Jarratt's picture
Phil Jarratt commented Thursday, 22 Dec 2016 at 5:47pm

More power to ya, BB. Alliteration lives!

Phil Jarratt

Dave Drinkwater's picture
Dave Drinkwater's picture
Dave Drinkwater commented Thursday, 22 Dec 2016 at 6:49pm

They saw an opportunity and took advantage of a company and the people that invested in good faith. All the big brands were having trouble trying to position them selfs in a ever changing global market and while this is all happening the young grommets coming through just saw a bunch of old people wearing clothing that wasn't relevant to their gig, they dropped the ball. (Innovate or perish)... ??? This gave rise to alternative underground brands, where it all began..

Its just a cycle, corporate greed has no place in the surfing culture and eventually like a boomerang it will come back to hit you in the back of the head when you least expect it...

Keep it real and just be nice

oiley's picture
oiley's picture
oiley commented Friday, 23 Dec 2016 at 12:46pm

when are the hueys getting listed on the ASX? LOL

Vic Local's picture
Vic Local's picture
Vic Local commented Saturday, 24 Dec 2016 at 5:15pm

Look on the bright side, Perrin will be getting seriously barrelled in prison soon.

"angry online, smiley in the brine"

seaslug's picture
seaslug's picture
seaslug commented Sunday, 25 Dec 2016 at 6:52pm

Didn't Billabong make a soap, he could take it with him and fix it to the floor

canetoad's picture
canetoad's picture
canetoad commented Saturday, 24 Dec 2016 at 5:54pm

Billabong used to be a big family business that respected it's workers. Now the company seems intent on employing Bogans who have no relationship with the surfing lifestyle and employees have just become a number ! As for money changing people. I've personally seen a beautiful family whose kids became great surfers.
Never have a real job, split apart. The hate , the egos, the money, family members turning on each other. Unbelievable head problems. Money and greed. Change people ? Absolutely.

canetoad

fitzroy-21's picture
fitzroy-21's picture
fitzroy-21 commented Friday, 27 Jan 2017 at 11:45am

Perrin gets 8 years prison for fraud.

Over60yrs's picture
Over60yrs's picture
Over60yrs commented Friday, 27 Jan 2017 at 12:11pm

Eligible for parole in 4 years. CBA have recovered $4m of the stolen $13.5m.............wonder where the rest is ??

simba's picture
simba's picture
simba commented Friday, 27 Jan 2017 at 6:06pm

Wonder what Gordy thinks about this?

simba

udo's picture
udo's picture
udo commented Friday, 27 Jan 2017 at 6:12pm

Whaaat...this ones for you
Lets say no more millions are recovered....Perrin patiently does his 4 yrs
Within a year of his release has instant wealth ?
Does the Qld statue of limitations [6 yrs ?] apply
or can any new found assets or money be seized ?
9 mill over 4yrs not a bad daily rate in the can....if he can keep it.

udo's picture
udo's picture
udo commented Thursday, 27 Jun 2019 at 4:59am

Perrin released on Bail.

seaslug's picture
seaslug's picture
seaslug commented Thursday, 27 Jun 2019 at 11:40am

A year before he was even eligible for parole

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