Kelly Gibson has helped build Irvine’s O’Neill Clothing into one of the larger surfwear makers with an estimated $75 million in yearly sales.
Now he’s been handed another growth task: Lost Clothing.
Gibson, president of O’Neill Clothing, recently added a chief executive’s title and also took on the top spot at Lost Clothing, which shares space with O’Neill in Irvine.
The moves are part of a reworking at Dysfunc-tional Clothing LLC, which holds the clothing license for Lost and owns the O’Neill clothing license under another name.
Former Dysfunctional chief executive John Warner moved to chairman and passed the reins to Gibson as part of a succession plan, according to Gibson.
At O’Neill, Gibson has overseen a doubling of the brand’s workforce and sales in the past three years. O’Neill employs about 150 people in Irvine.
Lost is known as an edgy, rebellious maker of clothes inspired by surf and skate culture.
Gibson said his goal is to grow sales by targeting a wider market.
“There’s a ton of opportunity out there,” Gibson said of Lost.
Shirts, shorts and other Lost garb is sold in about 800 surf and skate stores, including Jack’s Surfboards in Huntington Beach and Anaheim-based Pacific Sunwear of California Inc.’s stores.
Gibson said he recently filled two new positions: a vice president of sales, marketing and merchandising, and a marketing director.
Lost has estimated yearly sales of $30 million, up by a third since 2002. Gibson declined to give numbers.
Clothes make up the bulk of sales, though Lost also sells surfboards and surfing and skateboarding videos.
Lost has about 50 workers, up from 12 in 1998.
The brand shares warehousing and distribution space with O’Neill.
Lost International LLC, which owns the Lost trademark, is headed by Chief Executive Joel Cooper and founders Mike Reola and Matt Biolos.
Started in Garage
Reola and Biolos started Lost from a San Clemente garage back in 1993. Since then, they’ve gotten a lot of buzz in action sports circles.
Their hot sell: radical graphics, some with flaming skulls and voluptuous ladies, painted on Lost surfboards and stickers and printed on T-shirts and sweatshirts. They also made a name with boardshorts and made “garage-style” surf videos.
The brand has grown by licensing the Lost name to energy drinks and a line of clothes, including jackets, tops and pants, for girls, boys and men.
Reola and Biolos, who shapes surfboards in San Clemente, still approve marketing for licensees.
Competition is fierce, according to Reola.
“The level of competition, especially in Orange County, for floor space has increased,” Reola said. “There are so many companies making good clothes.”
Lost is up against other skate and streetwear companies, such as Costa Mesa-based Volcom Inc., which recently announced plans to go public, Irvine-based Element, which is owned by Billabong USA, and Costa Mesa-based Rvca Corp.
It also faces competition from surfwear’s big names, Huntington Beach-based Quiksilver Inc. and Billabong.
It even gets some pressure from sibling O’Neill.
“They do compete for dollars,” Gibson said of Lost and O’Neill. “But there are two swimming pools.”
O’Neill focuses on surf, he said, while Lost is “an attitude brand.”
In Lost’s marketing, the brand plays up “the decline of surfing civilization” and says it “offers a truer picture of the modern-day surfer.”
The image is a bit darker than the handsome, athletic surfers in ads O’Neill might run.
Reola said Lost will continue increasing its marketing as it grows.
Energy Drink
Lost so far has gotten big exposure from a licensing deal it struck with Corona-based Hansen Beverage Co. last year to make a Lost Energy drink targeting 15- to 25-year-olds.
“Twenty million cans per year with our Web site address printed on it has brought a lot of new traffic to lostenterprises.com,” Reola said. “Revenue generated from Lost Energy drink has allowed us to do things that only a company with higher sales can do.”
Lost now sponsors the Vans Warp Tour skate ramp and the Lost Pro Junior, which is held during the U.S. Open of Surfing in Huntington Beach. It holds surf and skate jams around the country, Reola said.
The brand also renewed its sponsorship of professional surfer Chris Ward with a five-year contract worth more than $2 million and potentially up to $3 million to $4 million based on incentives, Reola said.
Lost also has upped its spending on print ads. It doubled the number of ads it’s running in surf magazines and added advertising in “The Skateboard Mag,” Reola said.
“Marketing to a worldwide audience is more viable and affordable than it was 10 years ago,” Reola said. “We are focusing on one global Web site for Lost and Lost events and promotions will hopefully reach the rest of the world.”
