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Quiksilver Takes to the Skateboard

Apparel: The Huntington Beach surf-wear maker buys the clothing business of skate icon Tony Hawk with plans to expand the line's appeal.


Sinking its roots deeper into the extreme-sports market, surf-wear maker Quiksilver Inc. said Wednesday it has purchased a skateboard clothing company launched two years ago by skate champ Tony Hawk.

The renowned skateboarder's Hawk Clothing in San Clemente makes skate-inspired clothes, including loose pants and knit beanies, for younger boys, but Quiksilver plans to expand the line to include teenagers.

The companies declined to disclose terms of the deal, which does not include Hawk's skateboard-making business, Huntington Beach-based Birdhouse Projects.

Although Hawk's clothing sales were just $1 million in 1999, its first full year in business, the company's value to Quiksilver lies in its world-famous name. Tony Hawk, 31, a die-hard family man, has made skateboarding more accessible to mainstream America by merging his lanky, wholesome image with a sport that is populated mostly by edgy iconoclasts.

Under Quiksilver's direction, the clothing line will reflect those seeming contradictions.

"It's more of an edgy skate line, but not over the top," said Quiksilver Chief Executive Robert B. McKnight Jr. "It's not demonic. It's not in your face. It's acceptable."

As the skate line evolved, it became less "mom-friendly" and more "urban and core," said co-owner Pat Hawk, Tony Hawk's sister. Quiksilver will follow the same course and offer a product line that is heavy on hats and T-shirts, including some featuring menacing hawks.

"It's going to have an edge to it, that's for sure, because it is skate and it is young," McKnight said. "But it's not going to have swear words and daggers."

Analysts say a marriage between the famed skateboarder's business and the largest surf-wear company holds considerable promise for Huntington Beach-based Quiksilver, which has already expanded its formerly all-boys brand to include clothing for girls, middle-aged surfers and even toddlers.

"It could be very powerful," said Darren Barker of Wedbush Morgan Securities. Quiksilver has managed to build an authentic surf brand, he added. "Now we've got a company that has the people and the operations in place to capitalize on another attractive market--skate."

Although skateboarding has grown increasingly popular and many companies have sprung up to make skate shoes, few have made headway selling clothes to skaters, a balky bunch that shuns popular products.

Vans Inc., the granddaddy of skate-shoe brands, is still pushing to win this fickle audience. The Santa Fe Springs company, which recently moved to pump life into its brand by opening a string of skateboard parks, last year teamed up with Anaheim retailer Pacific Sunwear of California to make and sell Vans skate clothing.

Apparel sales from that venture are doing well, said Pacific Sunwear President Tim Harmon, who added that PacSun would be "very interested" in carrying the Hawk brand when it expands to larger teenage sizes.

But though Quiksilver is known for its deft maneuverability into new markets, it's still far from clear whether young skateboarders will sanction the Hawk-Quiksilver partnership.

"Within the sort of core, skate-surf markets, Quiksilver is seen as the big gun, the corporate type of company," said Miki Vuckovich, editor of Transworld Skateboarding Business magazine.

In any case, media-savvy Hawk will be boosting the brand under the new deal, which calls for Quiksilver to sponsor the 6-foot-3-inch skateboarder. A Carlsbad resident, Hawk has won six gold medals on ESPN's X Games, appears in high-profile ads--including the popular "Got Milk?" campaign--has snagged small parts in movies and has signed a deal to become a commentator for X-Games.

Hawk started the clothing business with his brother Steve and sister Pat. Hawk Clothing will close its south Orange County office and move to Quiksilver's headquarters.

McKnight said Tony Hawk will receive an undisclosed amount of cash, Quiksilver stock and other financial incentives tied to the sales and earnings growth of the Hawk brand.

The deal is Quiksilver's latest push to expand its product line to fuel sales and boost the bottom line. Having conquered the red-hot juniors market, the company is now preparing to launch a new line of contemporary sporty apparel for the slightly older woman.

Its expansion efforts have so far generally paid off.

The company also said Wednesday that its earnings for its fiscal first quarter ended Jan. 31 rose 22% to $4 million, or 18 cents a share, as sales increased 16.3% to $99.9 million.

But, as with many retailers, Quiksilver's stock has lost ground. The shares, which have slumped 49% over the last year, closed Wednesday at $13.25, down 25 cents, on the New York Stock Exchange.


The Next Wave?

Surf-wear maker Quiksilver Inc. hopes to push into the skateboard-clothing market by purchasing a company founded by skateboard champ Tony Hawk. Although Quiksilver's stock has slumped with other retail shares, its sales and earnings have been growing.


Source: Bloomberg News


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