California Apparel News

When visiting a foreign country, it is often customary for travelers to partake in the culture and rituals of the region. The same could be said for those new to the action-sports industry, where credibility is measured by one’s knowledge of the best surfing spots on the North Shore and the key players on the professional skateboard circuit.

For action-sports industry newcomer Paul Migaki, part of the challenge of being chief operating officer at Sole Technology Inc. was to learn how to skateboard, surf and snowboard.

“I’ve certainly been exposed to action sports more than I’ve ever been exposed to [them] before,” said the 50-year-old executive, who joined the Irvine, Calif.–based skate-inspired footwear company last January. “I’ve skateboarded, I’ve tried to surf and snowboard, and I’m bad at all three sports. But you’ve got to try the sport to better understand the business that you’re in. I realize now that it’s more difficult than it looks.”

Action-sports apparel companies in Southern California are beefing up their work force with experienced team players and relying less on experienced team riders. Most are hiring newcomers with strong business backgrounds.

Long gone are the days when apparel companies relied solely on the athletic talent of staff for street credibility. But several upper management sources say such talent still helps.

“[Action-sports apparel companies] are still heavily image-driven and focused on retaining their roots but are becoming more business and bottomline focused,” said Surf Industry Manufacturers Association (SIMA) spokeswoman Megan Tompkins.

The Southland’s action-sports apparel companies are growing at a fast rate as distribution channels such as department stores and e-tailers begin to embrace the industry. Plus, other apparel manufacturers are looking to get in on the action-sports action. Nike Inc. jumped into the surf scene when it purchased Costa Mesa, Calif.–based Hurley International in 2002, and New Albany, Ohio–based Abercrombie & Fitch’s Hollister Co. unit brought the beach to the mall.

With global manufacturing and distribution, the action-sports industry has come a long way since its beginnings as a cottage industry in the late 1950s. Today, Southern California’s action-sports industry represents more than 300 apparel brands, according to industry sources.

Some small and mid-size apparel companies cater to a small pool of core specialty shops, while the behemoths of the action-sports world—Quiksilver Inc., the Ocean Pacific Apparel Corp., Billabong, O’Neill, Hurley and Rusty—have expanded their operations to include global distribution.

As action-sports apparel businesses get larger they need management skills that are not exclusive to the surf industry, according to Frank Kaufman, a business assurance partner at Moss Adams LLP, a public accounting firm in Southern California that counts several surf apparel companies as clients.

“If you look into each one of these organizations, you’re going to find people in upper-management positions that are former pro participants in the actionsports arena,” Kaufman explained. “By hiring outside the action-sports apparel industry, firms are bringing in a different kind of management expertise to complement what already exists.”

Evolution of the segment

Industry sources say it is a natural evolution for a market segment that continues to grow at a fast rate. Kaufman estimates that there are approximately 50 to 75 significant companies, many with multiple brands, and 100 to 200 small or developing entities.

Michelle LeBlanc, marketing manager at the Action Sports Retailer Trade Expo (ASR), a Laguna Beach, Calif.–- based trade show for the action-sports and youth-culture markets, estimates roughly 100 action-sports brands will exhibit for the first time at the show’s Sept. 10–12 run in San Diego. About 65 percent of ASR’s exhibitors are located in Southern California, she said.

Maintaining credibility

The concept of recruiting apparel business experts has been in the works for a while, Kaufman said. He pointed to the Ocean Pacific Apparel Corp.’s recruitment of Chief Executive Officer Dick Baker, who served as president of womenswear at New York–based Tommy Hilfiger before joining the Irvine, Calif.–based surf apparel maker in 1997.

“For Op, bringing in Dick Baker makes a lot of sense,” Kaufman said. “He knows how to manage a business, but he also has experience working with the exact customer base that Op has targeted.”

Baker’s wholesale and retail background made him a perfect fit for Op, which was ready to reemerge from a decade-long quiet period.

“For me, it was the opportunity to come back and get involved in one of the original brands of surf—it was a combination of being a part of the heritage and an opportunity to make the brand relevant to the junior customer again,” said Baker, who grew up in a West Coast beach community before moving East to become an apparel executive.

Industry sources said the addition of “new blood” results in a positive progression.

“To the extent that these companies continue to support the industry and contests and advertise in consumer magazines and maintain their image, it’s not going to be an issue,” Kaufman said. “If decisions are made without people who are very close to the sport, then it could be an issue. However, I think the people who run these businesses are smart enough not to let that happen. Typically, when these people come in from the outside, they choose to adopt the lifestyle that’s already there as opposed to trying to make a surf-skate company into a corporate culture.”

Spirited growth

The need for greater visibility of employment opportunities in the actionsports market was the reason why Tom Pezman of Tom Pezman & Associates in Capistrano Beach, Calif., launched www.boardsportsjob.com, a Web site that lists employment opportunities for the surf-, skate- and snowboarding industries.

Pezman, an executive headhunter with a 30-year track record, was recruited by SIMA last year to spearhead the project.

“The action-sports industry is growing up, getting bigger and becoming more complex,” Pezman explained. “And for that reason, companies are looking beyond the industry to find candidates that have proven skills and accomplishments that match their needs.”

About 40 men and women found jobs in the action-sports industry last year, thanks to the efforts of Pezman and his associates. The applicants’ histories were as varied as the jobs themselves— from company president, financial officer and brand director to merchandiser, retail clerk, action-sports publisher and surfboard glasser.

Historically, the action-sports market has been difficult to break into, Pezman said.

“There’s a ’bro factor,’ and if you weren’t part of that group, it was difficult for you to break into the marketplace,” Pezman explained. “For a long time, there was a lot of interest and no place to channel those inquiries.”

Approximately 213 companies use the job board for their listings, and there are roughly 7,800 job seekers registered for the site, which gets about 2,000 visitors daily.

Employment opportunities at www.boardsportsjob.com have increased about 10 percent over the previous year, said Pezman, adding that the surf industry has the most visible job openings, particularly in design, merchandising and retail.

“The smaller the company, the larger the impact one person can have,” Pezman said. “So it becomes an issue for the hiring manager to make a good match.”

Expanding the talent pool

As some apparel companies grow larger they recruit employees from their competitors, which causes friction, said an industry source who asked to be unidentified. “It’s such a tight-knit industry that looking for new team players is not a bad idea,” the source said.

And there is no shortage of experienced players out there.

One newcomer to the action-sports business world who is not going to have a problem adapting is Rip Curl’s young and athletic Jimmy Olsen, who joined the Carlsbad, Calif.–based surf apparel company last year. Olsen worked at Fidelity Investments in Boston before joining San Francisco–based Gap Inc., where he worked for 10 years in finance, real estate and director-of-merchandising roles. He worked as the divisional vice president of corporate merchandising at Coach Inc. in New York before assuming the position of chief executive officer at Rip Curl.

Olsen said his role at Rip Curl was pure destiny.

“My long-term plan was to work in the surf industry and move to Laguna Beach,” said Olsen, an avid surfer. “I had been researching all of the surf brands over the years to try and find out which one would be the best fit.”

Sole Technology’s Migaki said the opportunity to work as a chief operating officer for an action-sports label seemed like a logical move for him. Previously, he worked at Nike, first heading up the sportswear giant’s Irvine, Calif.–based Sports Specialties subsidiary (which Nike acquired in 1994) and then serving as president of Nike Japan. He oversaw Nike’s U.S. equipment development and sales for four years before learning that Sole Technology was looking for an executive to streamline operations.

“What interested me was the opportunity,” he said. “I thought my comfort zone was more at a mid-size company, and I knew I could bring something valuable to the company.”

Although Migaki does not actively participate in action sports, he said he is very much in tune with the way the industry functions.

“My goal is to take the designs that our creative team comes up with and commercialize that product in a most efficient manner,” he said. “One thing that is tremendous about the company is that everyone has been very open and shared their knowledge and information about the industry. I couldn’t be happier.”