He’s a master at stirring things up.
Richard “Wooly” Woolcott, cofounder and chief executive apparel maker Volcom Inc., has made a career of causing chaos through the company’s rebellious motto and off-the-wall marketing.
Now he’s really shaken things up,only this time by going the way of the establishment.
The Costa Mesa-based company’s planned $86 million initial public offering has surprised some while others scramble to get a piece of the action.
“I’ve never had so many people call me and see if I could get them stock,” said Dave Hollander, president of Becker Surfboards, which has stores in Corona del Mar and Huntington Beach. “No one knows what it’s priced at or even if it’s a good deal. This whole industry is going, ‘You’ve got to get a piece of this thing.’ They’re hot.”
Woolcott’s going the way of his surf buddy Bob McKnight, chief executive of Huntington Beach-based Quiksilver Inc., the biggest maker of surfwear and one of the few publicly traded ones.
McKnight and Woolcott are “of the same cloth,” said Dick Baker, chief executive of Irvine-based Ocean Pacific Apparel Corp., part of Warnaco Group Inc.
Both executives are aggressive, focused and protective of their brands, Baker said. At the same time, they’re cool, laid-back surfers, he said.
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Woolcott has lived in a trailer by his favorite surf shop in Laguna Beach for years.
“He is a wolf in sheep’s clothing,” Baker said of Woolcott, who declined to comment for this story. “He’s a Pepperdine graduate who’s extremely smart, and, oh, by the way, he’s a core surfer who loves the business.”
Wall Street’s conservative suits and ties don’t seem the likely fit with Volcom, which has been the “essence of rebellion” and the “non-conformist of the tribe,” Baker said.
The company’s motto is “Youth against establishment.” It’s known for marketing antics. One Volcom tradeshow booth was cast in a Mexican theme complete with tons of tequila and mariachi-dressed employees.
“For all those reasons, it was a surprise,” Baker said of the filing to go public. “But not from a business perspective. It’s the right way to grow the company.”
Volcom is looking to cash in on its heady growth.
Big Growth, Profits
Last year, the company had sales of $113 million, which were up 49% from 2003. It has been profitable, with net income of $24.6 million last year, up 72% from the year before.
The company plans to use the proceeds of its offering to pay down debt and for marketing, expansion in Europe and other general purposes.
The results didn’t happen by accident, Becker’s Hollander said. Volcom “has always been controlled chaos” with “really bright people” calling the shots, he said.
Take the company’s marketing, which Hollander called “brilliant.”
Like the time the company bought a beat-up sailboat, hung a sail with its giant Volcom diamond logo and sailed it up and down the beach during a big surf event.
“It’s not like a bunch of idiots just getting lucky,” Hollander said. “The kids love them.”
Woolcott founded Volcom in 1991 with Tucker Hall.
They started with about $5,000 from Woolcott’s dad, Ren & #233;, who also is chairman and president of Clarendon House Advisors Ltd., a privately held investment firm.
Hall has a stake of 5% or more in Volcom, according to a regulatory filing. Woolcott and his father also own sizable stakes, though percentages weren’t given in the company’s filing.
Woolcott, a graduate of Pepperdine University, knew little about making clothes when the company got started. Neither did Tucker, who since has retired and couldn’t be reached.
Woolcott had worked in Quiksilver’s marketing department. He also was a Quiksilver-sponsored surfer with a promising career until he broke his neck on a surf trip to Mexico.
“It was a long rehab,” said Carol Nielsen, women’s buyer for Becker, who’s known Woolcott for years. “It really speaks to his drive and focus.”
Woolcott, who has a passion for art and music, told trade publication TransWorld Business last year he learned to run a company by “trial and error.” He said Volcom was “an excuse to let off some steam and do a lot of snowboarding.”
The company’s first headquarters was in Woolcott’s Newport Beach bedroom. Sales were run out of Tucker’s bedroom in Huntington Beach. Sales the first year: $2,600.
Woolcott got a call one Saturday from his dad, who had been looking at Volcom’s numbers, he told TransWorld.
Ren & #233; Woolcott had warned his son that he would be out of business in less than three months if he didn’t get his act together. The company was out of inventory and cash,and dad wasn’t planning to bail him out.
So Volcom got its act together, building a middle-tier action sports apparel maker by focusing on surfers, skaters and snowboarders.
“Volcom is the ultimate crossover brand, respected by surfers, skaters and snowboarders alike,” said Peter “P.T.” Townend, owner of Huntington Beach’s marketing and consulting firm The ActivEmpire Inc.
The company’s clothes and accessories are sold in some 3,000 stores in the U.S., including Becker, Huntington Surf & Sport, Laguna Surf & Sport, Nordstrom, Surfside Sports and Anaheim-based Pacific Sunwear of California Inc., one of its biggest customers.
It also sells clothes in 40 countries. It plans to take over its European licenses when the pact expires in December 2006.
Volcom has been “the darling of the industry,” said Randy Hild, Quiksilver’s senior vice president.
“They have a powerful brand that can go the next volume leap with the additional capital,” Hild said. “It’s going to be exciting to watch. They’re almost following the footsteps of Quiksilver.”
The company is set to join a select group of publicly traded action sports companies, including Quiksilver and Irvine’s Billabong USA, whose parent Billabong International Ltd. is publicly traded in Australia.
Most other surfwear makers are small and privately owned or have been sucked up in a wave of recent acquisitions by big apparel makers such as Nike Inc., Warnaco Group Inc. and VF Corp.
Woolcott has kept Volcom far from mainstream,at least from the outside. The company, which sponsors riders in surf, skate and snow, doesn’t sell stickers. But its signature diamond logo is plastered all over OC thanks to counterfeiters, Becker’s Hollander said.
“When you go inside and talk business they’re super organized,” said Steve Friedmann, vice president of Newport Beach’s Friedmann & Friedmann Insurance Services, which handled Volcom’s insurance from 2000 to 2004.
Even the company’s skate park at its headquarters has rules.
“Everyone that used the facility had to sign a waiver that they knew it was dangerous,” Friedmann said.
Woolcott also keeps an even hand when it comes to his retail accounts.
“He’s got an amazing ability to be one of the boys and coolest guys there but without taking anything to excess,” Hollander said.
Still, Woolcott will have to tone things down for Wall Street.
Tequila and Grandma
At a surf industry event a few years back, Woolcott received a few awards. During his presentation speech, he chugged tequila and thanked his grandma for taking him surfing.
It’s a delicate balance, Quiksilver’s Hild said.
Volcom needs to be creative and not send “a fire drill throughout the company” and “get everyone nervous about meeting Wall Street’s expectations,” he said.
“That could be a curse,” Hild said. “Quiksilver has done that well and I’m sure Volcom will do the same. They’ll create their own rules.”
Managing the brand after it’s injected with public money will be Volcom’s biggest challenge, said ActivEmpire’s Townend.
It needs to keep a “balance of saltwater and Harvard,” said Townend referring to a statement Quiksilver’s McKnight once made. “I daresay at this time Volcom might have a little too much saltwater. The infrastructure will most likely need some Harvard added to it.”
