SurfStitch CEO Mike Sonand and chairman Sam Weiss. Credit:Jessica Hromas Through its websites, it acted as both a third party retailer, helping others sell surf and skate wear, and a more traditional retailer, selling stock it purchased from suppliers itself, to people in Australia, the US and Europe. ​Initially investors loved the pitch. "If you look out three years, it will be a global business, not a loss-making business, with global scale," Janchor Partners founder John Ho told Fairfax Media shortly after the float. Less than a year later, the share price had more than doubled, pushing SurfStitch's market value beyond $500 million. SurfStitch looked like one of Australia's most interesting, and exciting companies. Cameron, who served as founding CEO, talked up the company's aims to hit $1 billion in sales within five years, and its potential to be the Netflix or Amazon Prime of the action sports world. It started investing in content, such as surf forecasting websites and action sports video providers, in a bid to drive more traffic to its websites.

Billabong was one of the largest shareholders in SurfStitch. Credit:Glenn Hunt Then came the wipeout (I warned you). Last year, Cameron abruptly and unexpectedly quit. New management wrote down the value of the company's assets; its financial losses deepened. It is now facing multiple class action lawsuits from shareholder groups, as well as an ASIC investigation. Its shares tanked, and are now suspended from trading. Happier times: Surfstitch co-founders Lex Pederson (left) and Justin Cameron at the ASX listing in 2014. Credit:Louie Douvis In a statement to the ASX last week, the administrator FTI Consulting said Surfstitch's ASX listed entity and a holding company had been placed in administration, but its consumer facing online companies continue to trade as normal.

At any rate, the SurfStitch saga could reinforce the perception among ASX investors that Australia just can't do online retail. Other e-commerce businesses that have made it to the ASX have also struggled. Shares in Temple and Webster, an online furniture business, have fallen 70 per cent since it listed in late 2015. Redbubble, an online marketplace for printed products, is down about 40 per cent from its IPO price. Some faith has been restored by Kogan, the online electronics retailer, whose shares started poorly but recently reclaimed their IPO price (and have since been on a bit of a tear). Yet, Kogan could be perceived as the exception not the rule.

That, coupled with the narrative Amazon dominates everything in e-commerce (the reality is more complex than that) and the fact that retail floats in general (Dick Smith, Myer) have been problematic to say the least could be a problem. It could make life difficult for the next wave of promising Australian tech businesses with aspirations to list on the ASX in the next few years, particularly those in e-commerce. At the front of the list would be Vinomofo, an online wine retailer with a devoted following, which pursues a daily deals type model in Australia. Members sign up to get discounted rates on cases of wine (and winemakers can offload excess inventory without hurting their brand). In confidential fundraising documents from 2015 obtained by Fairfax Media, Vinomofo's key investor Blue Sky Venture Capital said the "most likely exit path" for the company is an IPO, and that an IPO on the ASX "is achievable in the next three to four years". Other highly regarded Australian e-commerce companies to keep an eye on include Brosa, an IKEA-style furniture business backed by AirTree Ventures, Shoes of Prey, a custom shoemaker backed by Blackbird Ventures and Blue Sky; and The Iconic, the fashion business backed by the German clone factory Rocket Internet.

If the IPO route is closed off, these companies might still be acquired by a bricks and mortar rival. That's what's been happening in the US, stoking a mini revival for e-commerce start-ups. Retailer Wal-Mart acquired Jet.com, consumer goods behemoth Unilever bought subscription razor blade company Dollar Shave and pet food business PetSmart ate Chewy.com. For a while, SurfStitch's biggest shareholder was Billabong, another fallen surfwear company (what's the deal with that, Australia?). Of course, its struggles are in many ways company specific. But through the eyes of a beaten and bruised sharemarket investor, its travails might not look like an isolated case. The challenge for its successors will be to prove otherwise.