Another shake-up has played out at Irvine-based Ocean Pacific Apparel Corp.
The surfwear maker, hip in the 1970s during the surf craze, is expected to be sold to New York-based Iconix Brand Group Inc. for $54 million by parent Warnaco Group Inc.
New York-based Warnaco will get $10 million in the deal, which is expected to close in November. The rest will be in cash and stocks.
There were an undisclosed number of layoffs at Op’s Irvine office. Andrew Lelchuk, senior vice president at Op, said that the plan is to still keep the Irvine office and it will be business as usual.
Iconix owns, licenses and markets several brands, including Joe Boxer, Bongo, Rampage, Candie’s and Mossimo Inc., which it also recently bought.
Iconix said it wanted to break into the surf, skate and snow industry, and acquiring Op is a big step.
“Iconix believes it can expand OP’s international business further and significantly grow the brand’s penetration in the U.S.,” said Neil Cole, Iconix’s chief executive in a statement.
It’s a good move and we’re happy about it, Lelchuk said. It’s a great opportunity for Op and Iconic’s business model more closely matches ours so it’s a better fit.
The sale comes about two years after Warnaco, which makes underwear, swimwear and sportswear, bought Op for $40 million.
The company had been trying to restructure Op and jump-start sales, which have lagged over the years in the face of stiff competition from OC’s hip surf and skate set: Huntington Beach-based Quiksilver Inc., Irvine-based Billabong USA and Costa Mesa-based Volcom Inc.
Lelchuk said the company’s made progress on the restructure and is happy with it so far.
At a recent tradeshow, Op’s offering, particularly for women, had been streamlined and focused mainly on swimsuits, shorts and beach cover-ups.
Op has 30 license agreements to make a range of clothing as well as shoes, kid’s clothes, eyewear, perfume, skateboards and surfboards.
As part of the sale, Warnaco will continue to make and sell Op’s women’s and junior swimsuits under license.
Joe Gromek, Warnaco’s chief executive, said in a statement that the company made “significant progress in the restructuring of the OP business” but the sale lets it increase attention on core brands and “international opportunities,” key growth drivers.
Warnaco has seen some struggles. The company, which makes clothes for several brands, including Calvin Klein, Speedo and Cole of California, recently was urged by investor New York’s Barrington Group to consider cutting costs and selling assets not core to its business after a “string of recent operating disappointments,” which resulted in financial restatements by Warnaco and missing expectations.
Warnaco’s swimwear group, including Op, saw a $16.2 million decrease in sales in the three months ended April 1, partly due to extra costs from a new software system.
