The US investment firm behind surf label Billabong is set to take control of rival Quiksilver.
California-based Quiksilver Inc has filed for bankruptcy and sought permission for a $US175 million financing deal with Oaktree Capital Management.
Quiksilver, which has its origins in the Victorian surfing town of Torquay, suffered a 13 per cent fall in sales in 2014 and posted a loss of $US309 million.
Its shares, listed on the New York Stock Exchange, have fallen 79 per cent in 2015.
Filing for bankruptcy will facilitate a restructure designed to restore the company's financial health, Quiksilver said.
Its Asia-Pacific and European businesses remain strong and are not part of the bankruptcy filing, it said.
Oaktree is a major shareholder in Billabong International, after it joined another US firm in a $586 million deal to rescue the Gold Coast-based retailer from its financial woes in 2013.
Oaktree currently holds a 19 per cent stake in Billabong, and its representative on the retailer's board, Matthew Wilson, stood down on Tuesday.
Billabong said he was departing due to a potential conflict in Oaktree's investment portfolio.
Billabong and Quiksilver are leading retailers of surfwear and accessories, as well as skiing and skating and apparel.
Quiksilver's origins lie with Alan Green and John Law, who began making boardshorts in their Torquay garage in 1969.
Four years later they went into business so they could make a living while still going surfing, and the label was soon licensed in the US by surfer Jeff Hakman.
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