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Surfstitch board cut down amid rebuild

AAP logoAAP 5/12/2016 Marty Silk

Surfstich's board will have just three members going into the new year as the company tries to rebuild from falling sales, weaker revenue and hostile shareholders.

Founder of the online clothing and sports apparel retailer Lex Pederson, as well as Justin Stone, Stephen Goddard and Jane Huxley will all stand down from the board at the end of this month, less than three weeks after 31 per cent of shareholders voted against the company's corporate pay package at the annual general meeting.

Surfstitch chairman Samuel Weiss said Quiksilver Europe founder and former chairman Harry Hodge will join the board and the company will search for additional directors to replace those who are leaving.

Mr Pederson and Mr Stone will continue in their executive roles at the company

The retailer has had a difficult year making a net loss of $155 million in 2015/16 after investing heavily in business changes and failing to achieve the strong sales growth it hoped for.

Surfstitch has also warned legal costs from its failed $55 million takeover bid for CoastalWatch and a content sharing deal with Crown Financial would make a forecast decline in cash from operations in the current financial year blow out to $9 million to $10 million, from its previous forecast of $6 million to $7 million.

The board changes will leave Surfstitch with just three board members, Mr Weiss, Mr Hodge and chief executive Mike Sonand going into 2017.

Mr Weiss said a smaller board with a majority of non-executive directors would aid the company's rebuilding process.

He thanked the outgoing board members for their contributions, particularly over the past nine months.

"I am especially grateful to Stephen, Jane, Lex and Justin who have each contributed much to the Board and the Company and have been most helpful to me as I have come to grips with the issues that the company faces and how best to address them in the months ahead," Mr Weiss said in a statement.

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