Surfwear maker Billabong USA in Irvine is developing a retail division to support a handful of specialty stores, and has contracted with an operator for a chain of outlet stores, two of which recently opened.
In November, Billabong hired Pacific Sunwear of California Inc.’s Steve Culley to oversee the new division as vice president of retail store operations.
“We are considering opening a select number of concept stores, but at this point it’s still in the planning stages,” Billabong President Paul Naude said. “The objective would be to have a couple open in the next 12 to 18 months. We are not intending to roll out a chain of stores, but rather some flagship stores for showcasing and testing our product as well as driving the image of the brand.”
Culley had spent 15 years at Pacific Sunwear, joining the company at the time it was an 11-unit California chain and seeing it through its expansion into a nearly 600-unit national retailer. His final position at PacSun was divisional merchandise manager for young men’s and divisional merchandise manager for the outlet division.
“I felt it was time for a new challenge,” Culley said. “Pacific Sunwear is a very good company, but I’ve been working with Paul Naude a little bit and decided it was time to make a move when he made me an offer to head up his retail sales.”
Additionally, the company has entered a partnership with Newport Beach-based Pacific Brands to operate a small chain of outlet stores. The first two stores opened in Barstow and Lake Elsinore in November, with a third scheduled to open in Napa in April. Pacific Brands operates a small chain of beachwear shops under the name Balboa Beach Co.
These are the first stores for the Irvine-based surfwear company, but its parent Billabong International Ltd. has roughly four flagship stores in other countries including at its headquarters in Australia and at its European headquarters in France.
“The industry is in a great place, the youth market is vibrant and that bodes well for the industry,” Naude said.
Billabong, whose stock trades under the symbol BBG on the Australian Stock Exchange, is the second-largest surfwear manufacturer next to Huntington Beach-based Quiksilver Inc. Overall Billabong is projecting 2001 sales to be roughly $208 million in fiscal 2001 ending June 30, with the U.S. division accounting for about 48% of the company’s sales.
Billabong’s move comes a decade after its rival made its first foray into the retail business with a licensed Quiksilver Boardriders Club store in Honolulu, Hawaii.
“The idea behind the retail concept was to develop it as a licensed chain,we were not going to be in retail,” said Gregg Solomon, vice president of Quiksilver’s retail division. “We did not get into company-owned stores until 1997.”
Quiksilver, whose sales were $516 million for the 12 months ended Oct. 31, now has a total of 96 stores, including 12 company-owned stores and 14 licensed stores in the U.S., with the bulk of the stores operated by its European division Napali in Europe and Great Britain.
In the past year, Quiksilver opened a company store at South Coast Plaza in Costa Mesa. Also, the company opened its first Quiksilver Youth store for boys’ and girls’ clothing last year at Fashion Island in Newport Beach.
Solomon, who reports to Marty Samuels, executive vice president of sales, oversees a staff of 175 employees.
The Quiksilver Youth and Roxy stores, which sell the juniors’ line, are targeted for growth because they have less competition,most surf shops and other specialty retailers such as Pacific Sunwear are more focused on older teenagers and adults.
“It’s a fine line that we walk in trying to have our company-owned stores and still not infringe upon our retailers and key accounts,” Solomon said.
Other surfwear and skateboard manufacturers that operate retail stores include Toes on the Nose, Rip Curl, and sunglasses maker Oakley Inc., which recently opened a single store at the Irvine Spectrum Center to showcase its products.
“I think it’s definitely a good move (for Billabong), but you have to be sensitive to where that store is going to be because you want to protect the stores that have been with you from day one,” Toes on the Nose President Richard Allred said. “It helps complement the brand and as long as you don’t take away from existing customers, then it’s a win-win situation.” n
