Editor’s Note: Scott Hays is co-founder and executive producer of OC World, a nonprofit multimedia company that broadcasts public affairs programming to 15+ million households on KLCS-PBS. He also is co-producer with Terry Corwin of the upcoming documentary “The Surf-Skate Business Evolution,” which will hold its first private screening on Feb. 27 at the recently renovated Lido Theater in Newport Beach.
Surf-wear industry entrepreneur Danny Kwock sits on a sky blue-colored plastic and acrylic side chair in the original Wahoo’s Fish Taco restaurant on Placentia Avenue in Costa Mesa, reflecting on that pivotal moment as a young teenager in Hawaii when he realized his life’s ambition was to become a professional surfer.
He was in a movie theater watching the Greg MacGillivray and Jim Freeman’s 1972 film “Five Summer Stories,” which weaves together five distinct narratives about the thrill and dare of surfing and skateboarding.
“That movie for me was iconic,” Kwock said.
Everyone in the theater was screaming at the projection screen as “Mr. Pipeline” Gerry Lopez, arguably one of the most revered surfers ever, scales down a massive 30-foot wall of water that at any moment could crush his skull.
Kwock remembers that Lopez was riding a Lightning Bolt surfboard, a company founded by Lopez and his business partner.
“I was like . . . dude, that guy is unbelievable . . . so graceful, so stylish . . . and he’s in the eye of a hurricane, and I was just a kid watching this going . . . holy moly . . . I want to do THAT! I want to be THAT guy!”
The next day Kwock went down to the local Lightning Bolt shop where, to his amazement, he saw Mr. Pipeline himself working in the backroom, shaping surfboards.
“I was like . . . ‘Whoa dude! There’s the guy!’”
Kwock went on to become president of Quiksilver Entertainment, an early investor in Volcom and co-founder of Salt Optics.
The Influencers of Surf Culture
That moment in Kwock’s life exemplifies the reasons why young people around the world became consumed with the surf industry – a combination of lifestyle and culture, films, magazines, music, surf shops and bronzed-body surfers with their stylish clothes and accessories: shorts, sandals, shoes, t-shirts, sweatshirts, wetsuits, boards and sunglasses.
Surfers in the early days got a reputation as beach bums. What savvy insiders soon found out was that Orange County surfers built the world’s action sports apparel into a multibillion-dollar industry.
In fact, most of the major brand companies in the surf industry either launched or landed here in the coastal communities of Orange County – San Clemente, Dana Point, Laguna, Newport, Huntington and Costa Mesa – still considered today by many business and industry leaders as the “epicenter” of the surf culture worldwide.
Many attribute the start of the industry to the 1950s, when a young ambitious visionary named Hobie Alter started crafting and shaping surfboards from the garage of his parents’ home. Nowadays, the Hobie Cat is a fun and world-famous catamaran.
Eventually, other surf industry pioneers who were innovative and fearless, both in and out of the water, also turned their passion into profit from garage workshops and bedroom headquarters. That resulted in the uprising of dozens of now-iconic brands Vans, Hurley, Clark, Volcom, Hang Ten, Stussy, Hobie, and Quiksilver/Boardriders/Authentic Brands Group (ABG).
Jay “Sparky” Longley, for example, started Rainbow Sandals in 1974. The idea came while surfing at Lower Trestles at San Onofre State Beach. He noticed a pair of broken flip flops in the sand, and he figured, “Well, that’s something I can do.” At that time, cheap sandals that fell apart were such a common problem that Jimmy Buffett wrote “I blew out my flip flop” in his big hit, Margaritaville.
These early founders were “largely responsible for laying the foundation of modern surf culture,” said Laguna Beach resident Paul Naude, a major contributor to the early Billabong brand and now founder/CEO of the sportswear company Vissla.
From Bankruptcies to Corporate Takeovers
Between the late 1970s and mid 2000s, new brands in the surf apparel industry flourished.
Quiksilver from Australia, for example, first appeared in the U.S. as a licensing opportunity for Bob McKnight and Jeff Hakman before they purchased the company and trademarks, and a decade later completed an initial public offering of stock.
Richard “Wooly” Woolcott launched a pre-emptive advertising campaign for Volcom in the early 1990s by giving away stickers at The Frog House on Pacific Coast Highway in Newport Beach, before his company completed its IPO in 2005.
“The first company that went public changed everything because now they had to drive revenues and it became more about spreadsheets,” said Peter “PT” Townend, Australian pro surfer and former associate publisher and advertising director for Surfing Magazine. “In the end that screwed it all up.”
Although the surf-wear industry continued to see impressive business growth globally, by the early 21st century some of the legacy brands began to chafe as competition intensified, consumer preferences shifted and companies either closed, folded, bankrupted, flamed out or became assimilated by large profit-making corporations that wanted to grow their share of the market by building a portfolio of brands through acquisitions.
In 1988, Vans was acquired by McCown De Leeuw & Co. for $74 million.
In 2002, Hurley was acquired by Nike for $95 Million.
In 2004, Vans was resold to North Carolina-based conglomerate VF Corporation for $396 million.
In 2005, Clark Foam closed its Orange County factory due to environmental concerns.
In 2011, Volcom was acquired by the French luxury brand PPR/Kering for $608 million.
In 2012, Hang Ten was acquired by Hong Kong-based conglomerate Li & Fung for $347 million.
In 2021, Hobie Cat Company was acquired by Maynards Industries, a Detroit investment group, for an undisclosed sum.
In 2023, New York-based ABG acquired Boardriders for $1.25 billion, which included such brands as Quiksilver, Billabong, Roxy, RVCA, DC Shoes and Element. ABG then assigned many of these brands to Costa Mesa-based Liberated, which filed Chapter 11 bankruptcy last week. While ABG is re-assigning these brands to New York firms, the latter still recognize the talent in the OC and is opening offices here (see last week’s edition of the Business Journal for details).
Some have kept control. Hoffman Fabrics is still owned by the Hoffman family. Rainbow Sandals is still owned by Longley.
Can Outsiders Understand ‘Stoke’?
Today, the global surf apparel and accessories industry is valued at more than $9 billion and is expected to grow at a compound annual growth rate of 5.5% until 2030 with a revenue forecast of roughly $14 billion, according to a U.S.-based market research and consulting company. The current North American market revenue share is almost 40%.
Meanwhile, the smaller independent brands find themselves caught in the slipstream of big business, and yet these Orange County entrepreneurs have never lost that single passion that drove them into the industry in the first place – the flexibility to surf when conditions are ideal.
“I’ve always believed in defending the borders of this industry because it’s a unique, mystical pursuit,” Naude said. “Passion for surfing is not product driven. It’s driven by this incredible feeling of stoke. The negatives of brand companies getting too big was that it attracted a number of outsiders who didn’t understand the intangibles and yet were in key decision-making positions that eroded the uniqueness of the authentic premium space that is surf culture.”
