[ ONCE A JOLLY SWAGMAN ]

An interview with Billabong founder Gordon Merchant after the phenomenally successful public float of his company

ONCE A JOLLY SWAGMAN

From nomad to mogul - the remarkable journey of Billabong boss Gordon Merchant

By Tim Baker

When Billabong went public this year, and news of its spectacularly successful debut on the Australian stock exchange was splashed all over the front page of newspapers around the country, Billabong boss Gordon Merchant was staying low profile. He was neither at the Brisbane stock exchange for the first day’s trading, nor available for comment to the legions of reporters eager to record the utterances of this unlikely mogul. The former surf nomad, who had started out cutting boardshorts on his kitchen table in a tiny rented apartment, and was now worth an estimated $255 million, was surfing on the NSW north coast, far from the madness of the trading floor. He was running round the point in between waves when a TV crew managed to finally catch up with him, and he politely answered their questions and continued his surf.

Barely a week later and he’s back at his Gold Coast home, high on the coastal foothills overlooking this famous stretch of beach. It is here, from his laptop computer, on a dining room table strewn with papers, surrounded by floor to ceiling windows and panoramic views over the Gold Coast’s beaches and hinterland, that Gordon commands his empire. A telescope at the window is trained on the southern points of Snapper, Greenmount and Kirra, so he will never miss the first sign of a new swell. Every Wednesday afternoon, he disappears to his second home at Angourie, not to return until the following Monday morning. If one must oversee a massive, global surfwear label - valued at around $600 million by the Australian Stock Exchange - this appears to be the way to do it.

I seemed to have found Gordon in the midst of one of those rarest of windows in life, when someone has ascended a peak whose height they can’t quite believe, and is temporarily awestruck by the view. Notorious as a hard man in a business and a tough, ruthless critic, Gordon is - for once - satisfied.

“That’s one thing that I don’t think I could have done much better at, which is a statement for me,” Gordon says, of the mind-boggling success of the float. “It’s hard for people because I am such a tough critic. I’m the worst person to shape a board for. I think I’m as tough on myself as I am on everyone else.”

SW: How did you get into the clothing business in the first place?

Gordon: I knew nothing about the clothing industry. My mother used to sew for Anthony Squires and I used to go out there at the factory and wait for her after school, so I knew what the inside of clothing factory looked like, and I knew how hard my mother had to work. When I started, I knew about what surfers like but I didn’t know about mainstream fashion or anything like that. I just tried to look at everything from a surfer’s perspective rather than anybody else’s perspective. I tried to think about what appealled to you when you were a grommet, when you just started to surf ...

I had a good friend, Tommy Moses, and he started Cream clothing. It was very successful in the early days. It was probably one of the very first surf brands that ever came about ... I was still slogging it out shaping boards, and I’d tried to make a lot of boards in the past and it had really affected my health. And I knew I wanted to make some money because I was sick of paying rent and I wanted to get a house to live in ... I saw Tommy doing really well and I thought I might have a go at that myself . I met up with Rena (his future wife) about the same time and Rena was crocheting and making little bikinis and selling them, and we decided we’d keep on with that, and we started making a few boardshorts and we used to take them round on a Friday afternoon and sell them to the local surf shops. I remember I think it cost us two bucks for the fabric and the velcro and the cotton. We didn’t even have any labels on them, it was that archaic. I’d cut them out on the kitchen table and Rena would sew them and we’d get about 25 pairs together and take them round to Hohnesee’s or Goodtimes or whoever and we’d just sell them for four bucks each and they’d retail for $6.50. I think we made about a buck a pair or something, but we had enough to live so we survived.

How did you come up with the name?

I was still building boards and Cabbage, just a young kid who was working for me, he’s still on the coast here, I was teaching him to sand. I said to him, what was I going to call this? After a while, people started having a go at me because there were no labels. I looked like a backyarder. I honestly believed that if you bought something you shouldn’t have to go around advertising it. You’ve already paid for it. Why do you want to go around like a walking advertisement? I was being quite idealistic. I thought it was silly to have labels on the outside of clothing. But then you started to realise that it was like a group thing, a peer thing, and if you could get a label, it was a prestige thing, people liked it.

I needed to get a label that looked pretty established. I thought of the brand like you used to have on farms above the gate - I’ll try to do something like that. And I tried to do some unique style of writing, so it kind of looked different, so I did the arch. Cabbage said, ‘Why don’t you call it Billabong?’ ... It was just a bit of Australiana, and I drew it up and put underneath it, ‘Since 1973,’ because I thought that’s what all these established brands have got. I’ve walked into Neilsen brothers and I’ve got my shorts there ... and I remember Kim saying, ‘What are you doing? It is 1973.’ (laughs) Everybody’s got to start somewhere. It was obviously a bit tongue in cheek but it worked.

What did you see yourself as primarily - a designer, or a businessman?

I didn’t see myself as anything. All I was doing was whatever was necessary. I started out as a cutter, and then I figured out how to make all my own patterns. I actually did that off my surfboard templates. I didn’t want to go out and learn how to make patterns. I wanted to understand why you did certain things, what effect it had. If I learnt that then I learnt how to make something very efficient and very practical, because I knew all the reasons why you did everything, not that somebody told you to do that. I just did whatever was required, pretty much. I was the sewing machine mechanic, I was the pattern maker, I was the stock room. I did the despatch, and all in a pair of boardshorts. We had this factory and Myers would come in and want to buy product and they’d look straight at me and go, ‘Where’s the manager?’ So I’d look at the girls and go, ‘Who wants to the be the manager today?’ and they’d all put their hands up ... They’d just look straight past you and look for the guy in the suit.

Where did you grow up?

I grew up on a farm west of Sydney, out near St Mary’s. I grew up riding a horse to school. We had a mixed farm. We had 2000 chickens, 100 pigs, about 20 cows, a couple of horses. We used to grow crops. We had no electricity and no running water, just tank water. It was very very hard. It was funny because when the hippy thing came round and they said, ‘We’re going to go back to nature and we’re going to not have electricity, we’re not going to have this and that,’ I said, ‘Hey, I’ve been there, done that. You do that, I ain’t doing that.’ I really appreciate having an automatic washing machine. I still remember mum trying to do the washing in a 44 gallow drum with a fire underneath it. That was just murder.

How did you get into surfing in the first place?

Through my brother’s friends. We moved to Maroubra and the thing to do at Maroubra was surf. I started to try and surf and I was terrible. I couldn’t swim, I dog paddled to the beach. I copped such a bagging. But after a year or two people start to accept you, slowly but surely I grew and got stronger ... Then, I went off and sanded boards for Scott Dillon in Brookvale. My mother thought my life was finished. I guess I got into drugs a little bit and wound up in Jeffreys’ Bay, of all places.

What was that like?

They were perfect waves but the boards didn’t work, and I thought, this is ridiculous, forget all this fashionable shit, I just want to shape boards that actually work. I spent a bit of time there and thought about it. In 1968, 1969, Midget came out and he brought out the first downrail I’d ever seen. We were riding the boards that I’d just started to tuck the edge a touch just around the tail, but everywhere else was just a soft rail. We didn’t even have a real good idea of an overall rocker line of the board. And Jeffreys Bay certainly taught you that. It was a fast wave. Midget brought this board and it had the most outrageous rails you’d ever seen, from nose to tail, it was like a sharp vee. It had no rails, just an edge, but he could sit on the back of this thing and he had this little pintail on it, and he’d just wiggle it and he could sit 50 metres inside us and just fly past us. But he had no manoeuvrability. I had all the manoeuvrability in the world. I could go vertical and go straight back down again but if any little section got in front of me my board was like a handbreak, it couldn’t get around it. And he could just drive around everything, he had all the speed. When I left there, I went up and I was in Engalnd for a while and I just thought about the two and tried to figure out how I could get the best of both, have the speed and have the manvoeurability. I figured if I tucked the edge under, still had the edge under there but still had the curve of the rail, I thought it might work. It was two years later before I actually did the board. I came back and got a job with Joe Larkin. Brian Austen, “Furry” was working there, and Michael Peterson and Billy Grant. Michael was only 15 or 16, and Peter Townsend and Rabbit. I made this board, a 5’`10” - taped it up with masking tape and filled it up with resin so it had the full box downrailer, and went round to Duranbah with a block of wood and sandpaper and just kept tucking the edge under until I got a continuous curve off the rail and this hard edge underneath. And every time I went back out in the water and tried it you could feel it. You had this instant speed and this thing accelerated, whoa, and yet you could still lay it on a rail and still do a full rail turn because it had some rail to work off. That was the start of it, that changed everything.

What was the Gold Coast like when you first got here?

It was amazing. When I got here it was 1970, there was only about 15 guys that used to surf Kirra and Burleigh, because of the consequences of losing your boards, and when the surf was pumping there’d be like 200 people, most of them surfers, sitting round the points watching you surf and not going out because the didn’t want to smash their boards.

Where do you think you got your drive to be successful in business?

Maybe it’s the syndrome of being small, the small man’s syndrome, I don’t know. I used to cop shit from my dad, I used to cop shit from everybody because I was little. I guess maybe I’ve always been super competitive. I’ve always wanted to be successful in whatever I did. It didn’t matter whether I grew paw paw trees, I wanted to grow the best paw paw trees ... I was always trying to prove myself, I guess ...

I remember probably the most thoughtful time I ever had in my life was when I was living on the farm. I had a farm out here (in the Gold Coast hinterland). I used to make just two boards a week and I used to just travel up and down the coast just surfing. I’d never in my life spent any time by myself before. I think it’s really important that people do get to spend time by themselves and get to analyse themselves, and think about what makes them tick, what they really want out of life. I used to sit there for days at a time, not doing anything, just thinking about me and what I wanted to do.

When I was a young kid, when I was at Maroubra, I came home one day and my mother had committed suicide. That kind of changed my life, because she’d been such a strong influence on my life and suddenly she wasn’t there, so I really did have to dig pretty deep and I consoled myself to a certain extent. I went looking for myself with drugs for a while. Never heavy drugs. It was smoking a bit of pot, or LSD. I took a little LSD, mushrooms or something. I went surfing on mushrooms.

What was that like?

Well, it was fantastic, as long as you didn’t overdo it. You hate recommending these things to anybody because you fear that they’re going to be stupid and overdo these things. And when it goes in your body it actually feels like a poison, so I don’t think it’s that wonderful for your body. But if you go back and study other cultures, a lot of cultures use different things to increase their level of awareness, and I found it very educational. If you’ve got one of those addictive natures then you can over do things.

There have been plenty of casualties.

I saw a lot and it is very dangerous and it’s nothing I’d recommend to somebody who didn’t know themselves very well, but I actually learnt a lot. We’d get hold of a mushroom and I’d just take a little bit, just to know how it did affect you, and then I’d know exactly how much to take and then I’d go surfing on it and I’d be able to feel the bottom of the board and the power of the wave and I learnt alot about water flow coming off the board ... You feel like what an animal feels like, when you’ve got those natural instincts and awareness of what we probably were like without intellectualising things. I can only describe the surfboard design in 1970 as archaic blunt instruments. They were too short, too heavy, with soft rails that had been carried over from the mal days that also made them too slow. The boards also had a single fin that was between 12" to 14" deep that weighed at times up to a kilo in an attempt to create some sort of drive out of the board. I thought they worked more effectively as an anchor being the weight they were and over two centimetres thick at the base and rarely foiled correctly.

I'm certainly not trying to justify taking mushrooms, because given my time over again and the same circumstances I would probably do the exact same thing all over again. The reasons I stopped taking mushrooms at the time wasn't to do so much with the mental effects. It was more to do with the physical effect it has on your body and the fear it might have some long term detrimental side effect on your kidneys or liver. Also, the authorities had seen fit to pass a law banning taking these particular mushrooms. At the time there were people going out and collecting buckets full and adding them to vegetable stews and making a meal out of them. They wouldn't have a clue how many mushrooms they were consuming in the one meal. So consequently these people were at times over dosing severely. So I guess the law had to prevail to protect them from there own stupidity.

It was during this period of time that I developed a totally different surfboard design from what was currently available. I also developed I think the first leash that had a strap around your ankle attached to a rubber shock absorber and then to a fiberglass plug on the deck of your board. The boards I designed were around 50% thinner and 50% lighter with small boxy rails and a tucked under edge. I remember copping a heap of flack from a lot of the then surfboard design gurus because my boards were so different. I also copped a lot of verbal abuse for being the first surfer to use a leash. But on both accounts I used to just laugh at them because my boards worked really well and were going way faster. With a leash I could sit deeper and catch heaps of waves. If I did get caught behind a section, I would just straighten out, jump off and pull my board back through the wave and be ready for the next one. If a clean up set came through I'd be the only one left out there.

I didn't know it at the time but I was entering the best five years of surf in my life and that any surfer had ever seen on the Gold Coast. I was 26, in the prime of my life, capable of surfing nine hours a day four days straight. I had great boards, a leash and the crowds weren't a factor. I was as free as a bird and needless to say loving life.

Have there been a lot of sacrifices along the way, in the name of business success?

People may look at myself and the success of Billabong and think, oh wow, he’s very lucky, and perhaps I am, but everything we gain we also lose something. And I really look at a lot of people that have normal lives and had very close family relationships, and when you’re that obsessed and you work that hard, you do sacrifice a lot ...Money’s nice but it’s not the be-all and end-all. It’s been very educational for me in regard that I sat on that farm and had absolutely nothing and I sat and thought about where I wanted to go and I’m here right now and I’ve got everything probably you could ever want and I look back and I think about that period of time and I was freer then than I am.Because I had nothing there, so you’re not trying to run out there and protect all these possessions, look after all these possessions. The more possessions you get are just like another anchor. It’s all dispersing your energy that perhaps is best put in some other areas, to lifting your awareness levels. Maybe not the drugs, (laughs) I don’t think my body could take it.

You obvioulsy keep pretty fit.

I stretch a lot. That’s another part of it, just being aware of your physical and your mental . When I got to 50 years old, I was stiff as a board and I was trying to surf and I was like a tin solider, and I started to stretch and seven years later I can do the splits. I’m pretty flexible.

My neck and shoulders were stuffed from surfing so much. I remember I used to be able to surf Burleigh for like nine hours a day, and I’d be out there paddling against the rip and catching waves but I never stretched, and consequently my neck and shoulders were pretty much stuffed. I had pins and needles coming up and down my arms.... from surfing so much and never stretching and now I can surf and I don’t get that problem because I know stretches to correct all that. There are a lot of good stretches for surfers that can correct shoulders and necks. You’ve got to be disciplined and you’ve got to put in at least half an hour a day.

You’re pretty diet consscious too.

I have to be really. I always have been. I was in Bali and I caught giardia and that really knocks you around, and I had to stay on a diet, and the diet for giardia is really quite a strict diet. I stayed on this diet for two years and I beat it. The parasite grows in your stomache, you’ve got no energy whatsoever, you’re nauseous as hell, it just flips you out. The worst stomache cramps and the worst gas, the worst acid stomache you could ever imagine. It really knocks your immune system around. No sugar, no dairy, no wheat, no yeast, no alcohol. The best thing you can have is rice and vegetables, very neutral.

And you’re still surfing a lot.

I’m really happy that I’m still surfing. I don’t know how far I can go. When I was a kid, 16, 17, I used to think you stopped surfing at 30, and here I am heading towards 60 and still riding shortboards and enjoying it, going to G-land and places like that. And I don’t know how long I can go for but I’ll go for as long as I possibly can.

Do you believe in fate? Do you think you were destined to do all this, or could it all have turned out quite differently and you’d be just another old surfboard shaper?

(Thoughtfully) I honestly don’t know. I don’t know. Whatever I turned my mind to, I was determined to be successful. You know, we nearly went down twice. A couple of times there we were on our arse. The first year we were in the factory I just over produced boardshorts. I owed plenty of money to people who’d given me accounts and I paid them off. I remember we used to go to the flea market. We had three little girls, two little girls and a baby, and we sat at the flea market all weekend and sold boardshorts for four bucks a pair, and it cost as $3.50 or something to make them, and we got enough money together just to get us through the next week, so things were really tight. That was probably about ‘74, ‘75.

And then, when I financed Bob Hurley because Bob started the business over in America with $40,000 ... I never costed it really out, how the cash flow was going to work, and for a little bit there we thought we were going to go down. We were advised that we should fold the company up and move on and we said, bullshit, we’re going to ride ourselves out of this ...That was June/July, by October we were back in the black again and it passed. We worked our way out of it.

How stressful are those times?

I remember waking up in a cold sweat. The sheets were saturated because I was terrified. You think, oh god, all those people you owe money to, you had such close relationships with, and you just thought you were going to let them all down ... Rena was a tower of strength through those periods. She would hold it all together and we’d just keep working away and work our way out of it. It is scary and it does take a lot of nerve to keep coming back and spinning the wheel again, putting all your money, every cent you’ve got plus every cent you can borrow, on the line. And you’re actually only making 10% profit, so if you blow it, and it doesn’t take much to blow it, you didn’t make any money that year. And if you blow it by 20% you just made a 10% loss, and if you haven’t got the money, you don’t repay your debts, you’re in deep shit.

How important has Occy been to Billabong?

Occy’s the longest sponsored surfer, since 13 or 14. I went into Mark Apilovich’s surf shop in Cronulla and Mark introduced me to him and I was 33 or 34, so it’s been a long time.

It must have been satisfying to watch his comeback?

It was very satisfying to see him come back like that, but I tell you what, it was really disappointing to see him at 19 and throw it all away .... I mean, he had it in his fingertips and he threw it all away. He wasn’t mature enough to handle it, and I think it was part of the burn out syndrome of kids who want to get on the tour when they’re 16. He said, if you don’t sponsor me, Terry Fitzgerald will, so I travelled with him most of that first year, but you can’t hold their hand every day of the week. I would have loved to see him retire last year, to see someone use the system to their benefit, rather than the system use them. “That’s all I want, see you later.”

What have been some of your proudest moments with Billabong?

I thought that some of the contests in Hawaii were about as challenging as you’d ever want a contest to be. If you’ve got a contest that can be at Sunset, Pipe or Waimea and you are taking boards for all those breaks and you’ve got to be able to surf all those breaks, that’s a big ask. And to watch perfect Waimea at 25 feet and that day that we had to call it on (1986), it was hairy. And (Rob) Bainy came in, he nearly drowned out there. I said, ‘Money for nothing, cheques for free,’ and he started chasing me round the car park (laughs). I knew how hard it was for those guys to paddle out there and surf that place. (Gary) Greeny was on the beach just spinning. I went to get him a board off Mike Latronic, an 8’6”. He was just about in tears. I feel for those guys because I’m terrified of waves that size.

So, what’s the future hold now?

I don’t really know. I just think right now it’s another time for me to just assess where I’m going. Obviously, I’m still pretty committed at Billabong and making sure that it is successful . For me personally, I just try to stay as fit as I possibly can, get the best surf I can. We’ve just bought a house in Hawaii, right between Jockoes and Lanieakea. You jump off the rocks and paddle straight out. I’m going to put some time in there I hope. It’s just an old beach house but it’s alovely place. I love that area. I know most of the crew who surf round there so it’s fun.

What’s your favourite wave?

I like G-land, G-land’s one of the best waves. It’s like Kirra. There’s nothing like a wave that you can pull in to and stand straight up and be a long way back in. That feeling’s just awesome, and that’s a place you can do that, you can actually stand up in the barrel.

Jeffrey’s Bay. Going anywhere like that and to be able to paddle into any wave you want , no hassles, no nothing, and just surf for the sheer enjoyment, the sheer pleasure. I grew up in periods like that when I had a fair bit of that. I think I’ve surfed Angourie at it’s very best, Kirra at its very best, Burleigh, everywhere. These days it’s pretty crowded. I guess Angourie’s one of my favourite waves. I love Kirra. I love Burleigh, Tavarua and G-land. And Mundaka, I had the longest barrel of my life there. They’re all different, they’ve all got their own idiosyncracies.