Irvine-based surfwear maker Ocean Pacific Apparel Corp. has acquired smaller rival the Realm LLC of San Clemente, according to sources close to the deal.
The deal, which was in the final stages late last week, is the first buy for 28-year-old OP and is part of the company’s bid to grow its business. The move is one of several steps taken over the past few years by OP to reinvent itself as a hip, beach-oriented apparel brand.
Industry players say OP’s challenge is to maintain the Realm’s core surfer customer base.
“It will help OP’s image, but the question is it depends what they do with it,” said Joel Cooper, chief executive of Lost Enterprises in Laguna Hills.
OP, which counts annual sales of $130 million, produces apparel, footwear and accessories and recently launched a new sportswear line for professional surfers called OP Pro.
The Realm, whose yearly sales are estimated to be about $3 million, was formed two years ago by a team of executives who worked for sunglasses maker Arnette Optic Illusions, which later was bought by Bausch & Lomb Inc.
Rays Apparel Inc., a Costa Mesa apparel maker and a longtime OP licensee, is expected to produce the Realm line for OP.
Dick Baker, OP’s chief executive, could not be reached for comment last week. But Baker acknowledged earlier this month that he was negotiating with the Realm.
The Realm, which was founded by a group of investors including Craig Lark and surfer Greg “GT” Tomlinson in 1998, has had a few setbacks since its launch, industry sources say.
Lark, a former Oakley Inc. employee, was Arnette’s co-founder and vice president. Tomlinson, Realm’s director of sales, worked at Arnette and Gotcha Sportswear.
Lark, Tomlinson and several other founders formed a new sunglasses company in November called Von Zipper in San Clemente. Tomlinson and Mike Parsons, the Realm’s director of marketing, also have a stake in Von Zipper, but plan to stay on with the Realm, sources said.
It is unclear whether OP will retain the Realm’s surf team, which includes pro surfer Pat O’Connell. Under Baker, a former Tommy Hilfiger Corp. executive who was hired by OP in 1997, the surfwear brand has pared its staff down to about 20 employees and its manufacturing is 100% contracted out.
OP has revamped its advertising, spent more than $1 million to sign top surfer Tim Curran and partnered with Surfer magazine to launch the OP Pro Boat Trip Challenge.
In its peak during the 1980s, OP sales were in the $400 million range. But competition from brands such as Quiksilver and Billabong cut into its market share and its annual sales bottomed out at $70 million in the 1990s.
