SYDNEY, Australia — Surfwear label Billabong's journey from a backyard on Australia's Gold Coast to a $3.2 billion public company culminated in its shares losing 99 percent of their value. Money manager Sebastian Evans is betting on a comeback.

Billabong International Ltd. accepted a refinancing plan from U.S. private-equity funds in 2013 after the name synonymous with professional surfing took on too much debt to build a network of stores. Evans, who manages the country’s second-best performing mutual fund, bought the shares recently at 60 Australian cents, near a seven-month low, and has faith a brand deemed worthless can recover.

“It’s a lot easier to turn around a company with a great brand, and you can’t get many global brands in Australia any more in retailing,” Evans, who helps oversee more than A$100 million ($78 million) at NAOS Asset Management in Sydney, said in an interview last week.

Gold Coast surfer Gordon Merchant founded Billabong 42 years ago, making surf shorts in a backyard shed and selling them to local shops. After floating on the Australian stock market in 2000 and soaring about 500 percent, the company was worth $3.2 billion seven years later.

A spree of acquisitions amid a global expansion in 2008 marked the beginning of the collapse as sales waned and the company was forced to shut stores and cut staff after breaching terms on its debt. By 2013, Billabong had seen two CEOs leave in as many years and its shares dropped 99 percent from their 2007 peak.

Cutting Costs

Billabong is cutting costs by switching from Chinese suppliers to cheaper makers in Vietnam, Bangladesh and India, Chief Executive Officer Neil Fiske told Bloomberg in February.

Less than two years into Fiske’s reign, Billabong in the final six months of last year posted its first profit since 2012. North America, Billabong’s largest market, last year contributed the least to sales since at least 2007, and Fiske has said he will open more stores in Australian cities to meet growing local demand.

Evans’ NAOS Long Short Equity fund returned 28 percent per annum over the past three years through the end of February, placing second among a survey of more than 500 Australian stock funds tracked by Morningstar Inc., a data and research firm.

Billabong is one of about 16 stocks that Evans typically holds in his portfolio, he said. Others include Amalgamated Holdings Ltd., which owns cinemas and hotels, and Macquarie Atlas Roads Group, a toll-road operator.

Further weakness in the Aussie dollar will boost profit at Lindsay Australia Ltd., which stores and transports fruit and vegetables, Evans said.

A fund run by Smallco Investment Manager placed first in the Morningstar ranking over the past three years.

Billabong shares slipped 0.9 percent to 54.5 Australian cents in Sydney on Friday.

By Adam Haigh; editors: Sarah McDonald, John McCluskey.