The largest 25 apparel companies with operations in Orange County saw local employment drop 8% in the past year as they continue to weather the worst downturn in apparel in recent memory, according to this week’s Business Journal list.
The list is ranked by OC employee count.
The decline in local workers could be steeper, as 12 companies,four more than last year,declined to provide their numbers and were estimated by the Business Journal, which tends to be conservative with its estimates.
Other than the 12 estimates, five companies saw their worker numbers rise, five saw them decline and three saw flat numbers.
Local employment trends have mirrored the national recession. Last year, employment at the 25 companies was flat, while employment rose by 8% two years ago.
Companywide employment was a bit better than overall OC worker counts,it fell 5% in the past year, according to the list.
New No. 1
The list featured a new No. 1, as employee gains at Oakley Inc. and estimated declines at Irvine-based St. John Knits International Inc. moved the Foothill Ranch-based maker of sunglasses, glasses, goggles and clothes in to the top spot.
Oakley, which was bought in 2007 by Italy’s Luxottica Group SPA, saw its local worker count rise 3% in the past year to 1,620.
Its companywide employment inched up 1% to 2,600.
“Our employee growth is indicative of our results in 2008,” Chief Executive Scott Olivet said in January, when the company landed atop the list of the largest foreign-owned companies here.
The company declined to comment for this story.
Luxottica, which does not break out sales for Oakley, saw its first quarter revenue fall about 20% to $1.7 billion, after its sales are converted to dollars. The dollar has gained value against the euro recently, which makes the decline seem larger.
Its sales fell by about 6% when evaluated in euros.
The companywide decline was due to “tough conditions across the world,” Luxottica said in a release.
Despite the overall decline, Oakley saw its sales rise 7% in dollars in the first quarter, Luxottica said.
Oakley’s 2008 sales were $1.1 billion, up 17% from a year earlier, Oakley said.
No. 2 St. John Knits saw its employee count decline an estimated 20% in the past year to 1,000 workers.
The maker of expensive suits worn by well-heeled women typically in their 40s, 50s and older has been hit hard by the retail downturn.
In October, it launched a separate SoCa line of younger, more casual clothes and later opened a SoCa store in South Coast Plaza. The launch is the company’s second stab at appealing to a younger crowd.
The company’s first bid didn’t include a separate line and alienated some customers loyal to the St. John Knits brand, industry watchers say.
No. 3 Huntington Beach-based Quiksilver Inc. was the biggest decliner with a 37% drop.
The maker of clothes inspired by surfing, skateboarding and snowboarding is still reeling after its November fire sale of Rossignol.
Quiksilver sold the money-losing French ski maker for $50 million, or less than 10% of what it paid for it in 2005.
Quiksilver restructured Rossignol throughout 2006 with massive layoffs and staff changes. Even after cutting costs, the company incurred big losses after it was hit with the worst winter in Europe in many decades.
The clothing maker had about $1 billion in short- and long-term debt as of the end of January. About $315 million is coming due this year and in 2010.
During a speech at University of California, Irvine’s Paul Merage School of Business last month, Bob McKnight, Quiksilver’s chief executive, called the Rossignol buy, “a mistake.” The company’s European lenders recently gave it a two month reprieve on a $70 million line of credit based on a pending sale of what’s widely believed to be DC Shoes.
No. 7 Irvine-based La Jolla Group Inc. saw the biggest rise in actual worker count, upping it employees by 39% to 430. The company, which makes clothes under the O’Neill, Lost, Rusty and Metal Mulisha brands, signed a lease late last year that doubled its headquarters’ space in the Irvine Spectrum.
The company still is hiring.
“We have a number of budgeted positions that we will continue to fill once we’ve gotten settled in to our new headquarters and through the remainder of the year,” said Toby Bost, chairman and chief executive of La Jolla Group.
While the company does not disclose sales amounts, it said they were up 31% in 2008.
O’Neill grew 15% in 2008, Bost said.
In April, the company announced that it is launching a collection of Rusty surf apparel in JCPenney stores.
The line will include T-shirts, shorts, boardshorts and hooded sweatshirts for young men and boys, set to debut in July.
“We’re stoked to add JCPenney to our growing list of retail partners, while enhancing our growth at the core level,” Bost said.
The company also works with Macy’s Inc., Anaheim’s Pacific Sunwear of California Inc., Irvine-based Tilly’s Inc. and other retailers.
Biggest Gainer
No. 15 Hybrid Promotions LLC of Cypress was the list’s biggest percentage gainer, upping its employees by 134% to 152. Its revenue was up 57% in 2008 to $142 million.
The maker of T-shirts, hooded sweatshirts and other items under the Hybrid, Bitter Sweet, Cage Rage, Three Counts, Power of Art and other brands and licenses got its start about six years ago out of a spare bedroom in cofounder Jarrod Dogan’s Hollywood home.
“We are definitely lucky to be continually growing during this economy,” said Jeff Caldwell, Hybrid’s cofounder.
Much of the company’s growth is due to its expanding product line and increased business with Wal-Mart Stores Inc., Caldwell said.
The company, which started out selling mostly T-shirts, now has a juniors and girls division, which accounted for about $15 million in sales last year, and now also sells fleece, polo shirts and other items that go beyond T-shirts, Caldwell said.
Caldwell also said that the company, which is new to the list, recently picked up some business lost by Nzania LLC, which now is closed.
No. 22 Seal Beach-based Affliction LLC, which moved to Seal Beach from Signal Hill last summer, also is new to the list.
Affliction generates more than $125 million in yearly revenue selling clothes under the edgy Affliction, Sinful and Xtreme Couture labels.
It is riding the recent popularity of mixed martial arts and rock-inspired clothes.
