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Surfwear Maker Doubles HQ Space in Irvine

In one of the larger leases this year, Irvine-based La Jolla Group Inc. is expanding its headquarters within the Irvine Spectrum.

The apparel company has outgrown its 100,000 square feet on Pasteur and recently signed a lease for a 200,000-square-foot building at 14350 Myford Road, which is owned by Irvine Company.

La Jolla Group has carved its niche in the surf-inspired apparel industry by making clothes under the O’Neill, Lost and Rusty brands, as well as motorcross-inspired Metal Mulisha.

The company generates an estimated $200 million in yearly revenue by selling its clothes at big and small retailers including Anaheim-based Pacific Sunwear of California Inc., Washington-based Zumiez Inc., Huntington Surf & Sport and Jack’s Surfboards, both of Huntington Beach.

At a time when the clothing and real estate industries are hurting from a tough economy, the expansion is significant.

La Jolla Group has grown its operations over the years and needed more space to accommodate future expansion, according to Chief Executive Toby Bost.

The company currently operates out of a campus-style location with three distribution centers and its brands operating in separate offices, Bost said.

Changing headquarters will give the La Jolla Group a chance to consolidate its operations as it continues to grow, he said.

“It came to a point where we were getting too spread out because of our growth,” Bost said. “We can’t wait to put all of the brands together under one roof.”

La Jolla’s new headquarters will oversee design for clothes, sales, marketing, accounting, advertising and distribution, Bost said.

The company tapped Irvine-based architecture firm LPA Inc. to design its building with sustainable materials and amenities including a modern distribution center, a model retail store, a fitness center and a 6,000-square-foot conference and showroom center.

The headquarters will have artwork and gathering spaces equipped with video games for workers to enjoy, Bost said.

The company’s goal is to create an office that’s functional but fun so that it appeals to its young employees, he said.

“Our employees spend most of their waking hours with us,” Bost said. “We’re doing the things that generations X and Y want from a corporation these days.”

La Jolla Group will move its distribution to the new headquarters next month.

Other operations are expected to move next year, Bost said.

The company counts 320 workers at its current headquarters, he said.

More workers are set to join the company since its larger space will allow it to grow its OC headcount some 30%, he said.

“There’s a lot of growth opportunity,” he said.

La Jolla Group’s move comes as the company is diving into the retail business.

This year, the company opened an O’Neill store at Anaheim GardenWalk. Last year, they opened an outlet store in Lake Elsinore called Rider’s Outlet.

More outlet stores will debut, Bost said.


Interesting Timing

La Jolla Group’s venture into retail comes at an interesting time when apparel makers and retailers are struggling to generate sales in a weak economy that has squeezed consumer spending.

The company isn’t immune to an economic downturn but plans to continue generating sales by making new products, Bost said, so La Jolla Group is making a greater commitment to invest in research and development.

“It’s an opportunity to build market share,” he said.

The company is investing in its manufacturing technology overseas so that it can make better products, Bost said.

La Jolla Group’s outlet stores are expected to help generate profits as they give the company an opportunity to sell overstocked items and move clearance products faster, Bost said.

La Jolla Group expects its revenue to climb 25% this year, he said.

Steve Case, senior vice president of leasing for Irvine Co.’s office properties, has noticed that surfwear companies are continuing to grow their operations in OC.

Competitor Irvine-based C & C; Cos., which makes shoes and clothes under the Sanuk and Liquid Force brands, outgrew its headquarters and moved into a 47,000-square-foot building in August.

Also in August, Asics America Corp. of Irvine left its 44,716-square-foot headquarters for 50,000 square feet of space.

“It’s unique how these companies are executing a business plan in a tough environment,” Case said. “They’re taking a long term view.”

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