Surfwear retailer Quiksilver Inc. put its U.S. business into bankruptcy Wednesday with a deal to hand control of the company to investment firm Oaktree Capital Management in a $279 million debt-for-equity swap.

"After careful consideration, we have taken this difficult but necessary step to secure a bright future for Quiksilver," said Pierre Agnes, Quiksilver's chief executive, adding the $175 million in bankruptcy financing provided by Oaktree and Bank of America will allow the company to keep its doors open during its chapter 11 restructuring.

The California-based Quiksilver filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., listing assets of $337 million and debts of $826 million.

Under the terms of the Oaktree-backed plan, Quiksilver's $279 million in secured bond debt will be swapped for a majority of the stock of the reorganized retailer. The proposed plan, which requires court approval, has the backing of 73% of the company's senior most class of debt, Quiksilver said in court papers.

Quiksilver's roots go back to Australia, but in the 1970s the company began making boardshorts for surfers in the U.S. and is now based in Huntington Beach, Calif.

Quiksilver is one of the best-known and longest-operating surf and snowboard clothing brands. The company designs and distributes its products under the Quiksilver, Roxy and DC brands. The company's European and Asia-Pacific businesses weren't part of the bankruptcy filing.

But the cash-strapped company has struggled in recent years, plagued by business issues that slowed the delivery of Quiksilver products to stores in North America.

Quiksilver's revenue in its most recent quarter decreased to $333 million with margins at 47.1%, resulting in a net loss of $38 million. During the same quarter in 2014, the company reported a loss of $38 million on revenue of $397 million and margins at 48.9%.

The law firm of Skadden, Arps, Slate, Meagher & Flom is handling Quiksilver's chapter 11 case. The case number is 15-11880.

Stephanie Gleason contributed to this article.

Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com

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(END) Dow Jones Newswires

September 09, 2015 08:45 ET (12:45 GMT)

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