Former Target chief tasked with resurrecting Billabong – five key challenges Launa Inman will face

Billabong shocked the market yesterday when it announced former Target chief Launa Inman will take over from Derek O’Neill as chief executive – promptly sending the company’s shares down another 1.5%.

Shares have fallen a further 2.62% this morning to $2.35.

But while Inman has the qualifications to take the role, there are questions about whether the company can succeed. It faces profit downgrades, store closures, a falling Australian dollar and a European environment where financial turmoil is the order of the day.

With falling share prices and a company losing profit, Inman has a big task ahead of her. Here are five key challenges she’s likely to face:

1. No surfing background

While many executives might say “retail is retail”, there is definitely a certain type of culture that permeates the surfing industry, and Launa Inman might have a little trouble fitting in.

For one thing, Inman has already said she doesn’t surf, and while that may not seem like a big deal, for a company keen on surfing and water sports it may be a bit of a clash.

That’s not to say it can’t be done, however Inman’s recent admission that she doesn’t have any plans to attend an upcoming Billabong surf championship may give the wrong message to some.

2. Specialist retailer

Inman’s background comes from working the top job at both Target and Officeworks, but these chains differ quite a bit from Billabong, a specialist type of retailer. Both her previous roles dealt in very general retail categories, across a variety of industries. Surfwear is a much more dedicated market with its own challenges.

Inman obviously has excellent retail experience – but it’s a shift to a very different type of market.

3. Choosing between retail and wholesale

Is Billabong a retail or wholesale business? It’s hard to know, given wholesaling takes up more than half the company’s revenue – perhaps the time has come for Inman to point the company in one direction or another.

4. She’s a woman in a male-dominated environment

Like most female chief executives in Australia, Inman is a woman in a male dominated environment.  In particular the surfing culture is quite masculine, despite the large number of professional female surfers. Coupled with the fact Inman doesn’t have much of a surfing background, it could be a hard task getting settled into a leading role at the company.

The fact the chairman has enthusiastically welcomed her into the role is a good start.

5. Bad weather and poor sales

Billabong is suffering under a number of key challenges the chief executive can’t control – bad weather and a poor economic environment in Europe. How Inman attempts to deal with both those issues will either make her a success or total failure.

Any chief executive who takes the top job at Billabong can make choices about store closures and job cuts, but there are elements here no one can control – how Inman deals with those factors will determine her level of success.