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Quiksilver Will Get Global Trademark Rights

Apparel: The Huntington Beach surf wear maker will pay millions to the Australian founding company.

May 12, 2000|From Times Staff and Wire Reports

Quiksilver Inc., moving to expand its surf wear empire, said Thursday that it is acquiring worldwide trademark rights to its brand name from the Australian firm that founded the original business three decades ago.

The Huntington Beach company acquired the rights to the Quiksilver brand for the United States, Mexico and Puerto Rico in 1986, using part of the proceeds from its initial public offering at the time. Before that, the Australian founder was licensing the brand to Quiksilver and firms in other countries.

Quiksilver will make three roughly equal payments, the first totaling about $22 million, to acquire the world trademark rights from Quiksilver International Pty Ltd. The second and third installments will be paid in 2002 and 2005, with final amounts to be determined in part by future financial results.

The deal, expected to close in 60 days, will "become very meaningful to our bottom line" in the future, Chief Executive Robert B. McKnight Jr. said in a prepared statement.

The Australian firm, co-founded by Alan Green, has granted 17 license/distribution agreements, including those for the Huntington Beach company's export businesses in Canada, Central and South America and for its European unit, Na Pali.

Other licensees, some of whom have had agreements with Quiksilver for more than 20 years, are in Australia, Japan, South Africa, Brazil, Chile, Argentina, Indonesia, Korea and Turkey.

For Quiksilver in Huntington Beach, the deal is the latest in an aggressive expansion effort.

Two months ago, the company purchased a clothing company owned by skateboard champ Tony Hawk, firming up its position in the growing extreme-sports market.

Quiksilver has also expanded its formerly all-boys brand to include clothing for girls, middle-aged surfers and even toddlers.

The efforts have paid off, as the company has posted solid gains in earnings and sales over the last five years. In 1999 alone, Quiksilver's profit rose 48% to $26.6 million as sales climbed 40% to $445.9 million

Quiksilver's stock, which has been under selling pressure over the last year along with shares of other retailers, climbed 7.2%, or $1.06 a share, to $15.81 Thursday in Nasdaq trading. The stock had traded as high as $30.75 about a year ago.

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