5 Big Stories
Orange County is home to five automakers, three of which had a moving 2017. Hyundai Motor America Inc. named Kyung Soo Lee president and chief executive in September. He replaced Dave Zuchowski, who parted ways with the Fountain Valley-based automaker in December 2016 as sales trailed the national pace. Mazda North American Operations also reported a major change, but everyone at the Irvine-based automaker packed boxes and moved down the street to the new 97,000-square-foot headquarters at Irvine Co.’s 200 Spectrum high-rise. Karma Automotive LLC has a new address in Irvine. It left Costa Mesa as its ranks expanded 47% to 588 employees. The company will finish the year with almost 1,000 employees, including an additional 280 at its factory in Moreno Valley. It rolled out the first Karma Revero in May and its first showroom in December on Pacific Coast Highway’s “Luxury Auto Drive” in Newport Beach.
The owners of South Coast Plaza bought back a large chunk of property at the Costa Mesa shopping center from department store operator Sears Holdings Corp. in July for $187 million. Sears continues to operate a roughly 240,000-square-foot store there and leases out another 43,000 square feet in its main building to fast-fashion retailer Forever 21. It also owns the Sears Auto Center and a restaurant site for a total of about 300,000 square feet. No plans have been announced about repurposing the space.
Wet Seal LLC, founded in OC in 1962, liquidated its assets after filing for bankruptcy on Feb. 2—its second filing in less than two years. The retailer reported 2016 revenue of $144.5 million and had 142 stores in 37 states. Boston-based Gordon Brothers Finance Co. bought the Wet Seal name and other intellectual property for $3 million at a March 2 bankruptcy auction. Wet Seal resurfaced last month with a fall collection, apparently designed in downtown Los Angeles. Former Chief Executive Ed Thomas now runs former competitor Tilly’s in Irvine—the retailer posted $152.8 million in revenue in the November quarter and net income of $8.8 million, up 36.5% from a year earlier.
Advantage Solutions Inc. filed for an initial public offering in May. The Irvine-based provider of sales, marketing, merchandising and digital technology services for packaged goods manufacturers and retailers posted net income of $31.2 million last year and an 11% increase in revenue to $2.1 billion. Its debt is $2.74 billion and includes $1.8 billion used to finance its $4.2 billion buyout in 2014 by Los Angeles-based private equity firm Leonard Green & Partners LP and CVC Capital Partners in Luxembourg. When it debuts on the New York Stock Exchange, industry experts say it will be poised to get one of the largest valuations for an OC IPO in recent years.
OC’s top two shopping centers, Fashion Island in Newport Beach and Costa Mesa’s South Coast Plaza, spent much of the year celebrating their 50th birthdays. The festivities included fashion shows, art exhibits and collaborations with designers on exclusive, anniversary-inspired products. And there was much to celebrate—South Coast Plaza reported $1.7 billion in taxable sales for the 12-month period ended June 30, while Fashion Island rang up $633.4 million.
Honorable Mentions
• The local apparel industry had its share of excitement. Retailer Quiksilver Inc. in Huntington Beach changed its corporate name to Boardriders Inc. in March, a move that industry watchers say prepared it to pursue Billabong International Ltd. The potential deal, which values Billabong at about $150 million, was announced this month. The action-sports apparel manufacturer and retailer emerged from bankruptcy early last year under the ownership of Oaktree Capital Management LP. The Los Angeles-based private equity firm also owns 19% of Billabong and is one of its senior lenders. Boardriders’ brands include Quiksilver, DC and Roxy; Billabong’s include RVCA, Element and Von Zipper.
• TravisMathew LLC in Huntington Beach was sold to Carlsbad-based Callaway Golf Co. in a $125.5 million cash-and-debt deal.
• Raj Swim, whose estimated annual revenue is $300 million, hired Brenda West as president. West, who served in a similar role at Manhattan Beachwear Inc. in Cypress, became the first person outside of the swimwear maker’s founding family to hold the position. Lisa Vogel and her brother Alex Bhathal continue to serve as co-owners and co-chief executives. Raj owns the SwimSpot retail chain, and makes and markets swimwear for Time Inc.’s Sports Illustrated Swimsuit, Ella Moss, Splendid, Reef and other brands. Raj also designs and produces its own labels.
• Apparel and footwear manufacturer and retailer Vans Inc. has settled into its new 180,000-square-foot digs in Costa Mesa, complete with a skate bowl, music room and full-time barista.
Next Week
Emerging trends in retail and marketing and our predictions on how those changes may play out in OC next year.
— Mediha DiMartino
