California Apparel News

Quiksilver Inc. will dive into a new phase of design and experimentation when it opens two new stores at the South Coast Plaza in Costa Mesa, Calif.

The Huntington Beach, Calif.–based surfwear company opens a prototype store for its juniors brand, Roxy, on July 31. Future Roxy stores will be built in the mold of the South Coast Plaza boutique, said Gregg Solomon, Quiksilver’s senior vice president of retail. The new store will depart from the look of previous Roxy boutiques and acknowledge the Roxy girl is getting older and more sophisticated, according to Solomon.

“Our mantra is: Keep the stores globally recognizable but locally relevant,” Solomon said, noting the former design lacked a uniform architectural style. “This is the first time we’ve committed to taking the look on a global basis.”

The surfwear company will again push its limits when it debuts a Quiksilver concept store in mid-2005 or early 2006. Located adjacent to the Roxy store in South Coast Plaza, the Quiksilver store will be the company’s only boutique reserved for male teen and young men’s fashions. The store will also serve as a brand laboratory where the company’s designers will experiment with ideas for men’s apparel.

The look of the new Roxy store will match its fashion-forward clothes, said Steve Jones, Quiksilver’s vice president of visual display.

While the old Roxy stores emphasized a bright teen-oriented look, the new 2,750-square-foot South Coast Plaza store will feature a clean design with muted colors.

“The idea was to take the product to the forefront with a minimal amount of hardware,” Jones said. “The perimeter wall fixtures are a series of poles standing from the floor to ceiling. We want to get an idea of clothes just floating there, not weighted down by these big bulky fixtures.”

Sophistication comes at a price, however. Solomon estimates that construction costs are between $250 and $300 per square foot.

Yet, that may be the price the company must pay to realize its ambitions for its retail division. Quiksilver plans to raise its retail division’s current earnings to 25 percent to 30 percent of the company’s worldwide revenue. The company earned consolidated sales of $975 million in fiscal 2003.

Quiksilver will open between five and 10 stores each year, depending on what opportunities arise, Solomon said. The company runs 37 Quiksilver Boardriders Club stores and five Roxy stores in the United States.Quiksilver Europe announced this week that the company acquired Paris-based three-store specialty chain Andaska for an unspecified amount.

The company recently opened a Quiksilver Boardriders Club store on the Third Street Promenade in Santa Monica, Calif., and in Downtown Disney, the entertainment district adjacent to the Disneyland Resort in Anaheim, Calif. The company also plans to build stores in Hollywood, Fla., and San Diego.

Quiksilver expects to build a Roxy store in Hawaii by late November 2004 that will have the sophisticated look of the South Coast Plaza boutique.

Analyst Jeffrey Van Sinderen of Los Angeles– based B. Riley & Co. Inc. said Quiksilver has a good chance of attracting more consumers to the store through the savvy new look.

“Much of the strength of Roxy historically came from a younger girl customer,” Van Sinderen said. “A more mature-looking format is consistent with the broader demographic to which Roxy appeals today as a lifestyle brand. The setup of a store to some degree can dictate who walks into the store and how comfortable they are to shop.”

But the design move could be risky, said Andy Graves, analyst for San Francisco–based Pacific Growth Equities LLC.

“It would be a shame if they skewed it into young adult and adult—they might lose their cachet,” Graves said. “I would be worried. Why fix something that’s not broken?”

The Quiksilver concept store received unanimous good reviews from analysts, including Graves.

“It’s a smart business practice for any retailer,” Graves said of the experimental store. “A concept store is lower risk. You’re not putting as much capital at stake, your design team and executive team can take a look, and you can do surveys of customers at the store and see what they like. It’s all positive.”

The concept store will be partially designed by Los Angeles–based Clive Wilkinson Architects. The firm designed plans for the Fashion Institute of Design & Merchandising’s Orange County campus and the Manhattan headquarters of advertising giant Ogilvy & Mather.

Solomon said Quiksilver does not yet have plans to duplicate the concept store.

“It’s going to give the young men’s brand a chance to showcase without Roxy,” he said. “It’s an opportunity to see how well it will it do on its own.”