California Apparel News

Perhaps no one remembers the good ol’ days of youth better than Ocean Pacific Apparel Corp. The Irvine, Calif.–based surfwear company that is best known as Op is mining its 33-year history for inspiration as it prepares to revamp the brand and boost sales.

Now a part of Warnaco Group Inc., Op is reclaiming its licenses, assembling a team from scratch and redrawing retail channels. The timing seems right. The thriving surfwear market stresses authenticity, and industry analysts advise action-sports companies to sell a lifestyle instead of mere products. With the current fascination for vintage-inspired looks, the strong growth in surfwear for juniors and the backing of swimwear giant Warnaco, Op seems poised to take off.

“The real opportunity here is to take the retro and vintage aspect of the business and do it in a modern way,” said Op President Dick Baker. “Op has the heritage to do it with credibility.”

Christy Lowe, managing director at investment bank USBX Advisory Services LLC in Santa Monica, Calif., said Op has an opportunity to flourish in the swimwear sector and overseas markets. “The Op brand is a real natural in the swimwear category, which Warnaco knows well,” she said. “With Warnaco’s distribution reach and scale, I think they’ll be able to propel the growth internationally.”

Op began as a surfboard company in the ’60s. Surfer Jim Jenks launched the apparel line in 1972 with three surf trunks and two walking shorts. Op made its name—and big bucks—after introducing Hawaiian shirts and corduroy walking shorts. It eventually sponsored surf contests and branched into skateboarding, snowboarding and other action sports. But sales declined in the late ’80s in the wake of increasing competition from new brands.

Baker, an apparel industry veteran who earned his stripes at Esprit de Corp. and Tommy Hilfiger Corp., joined Op in 1997 as president. He spearheaded a new branding campaign and changes in manufacturing and distribution. According to Baker, Op and Warnaco began discussions over a swimwear license. (Op had been licensing swimwear to Apparel Ventures Inc.)Talks evolved into negotiations for an acquisition. In August, New York–based Warnaco scooped up Op for approximately $41 million, making its first acquisition since emerging from bankruptcy.

In the past 10 months, Op has steadily expanded its team for design, merchandising and marketing. One of the first hires was Amanda Blake, who assumed the mantle of senior creative director after working at contemporary clothier Joie. A self-described tomboy and surfer, Blake aimed to build, in her words, “a surfer art studio.”

Eric Crane and Gary Siskar joined Op as marketing vice president and senior marketing director, respectively. Also surfers, Crane and Siskar both came from a buzz-worthy action-sports start-up called The Amerikan Project. Crane had been a freelance graphic designer on Op’s ad campaign before joining full-time. “I want to make everyone see Op in a new light,” Crane said.

Op hired designers from Abercrombie & Fitch Co.’s Hollister Co., Levi Strauss & Co. and Lucky Brand Dungarees. Baker said Op now has about 25 people.

The team will take the reins from the licensees. The apparel license with Rays Apparel Inc., also of Irvine, will expire at the end of 2005. Apparel Ventures’ license for swimwear ended in March. “We’re taking our core apparel business in young men’s, juniors and swim and converting them into operating businesses,” Baker said. “That is a big deal.”

The transformation into a vertical operating company that controls its sales and distribution channels has been made less daunting with Warnaco’s help. “Warnaco obviously has the capacity and experience to do that,” Baker said.

Warnaco also wants Op to stay its own course. Warnaco Swimwear Executive Vice President Kathy van Ness said Op functions as a completely separate company with a dedicated staff. It also has its own heritage as a California lifestyle brand. “California—this is where it’s happening,” she said.

Van Ness recalled that when focus groups in California and across the country were shown Op products, their nostalgia-infused reaction was: “Wow—Op.” She said children’s clothing and footwear are still licensed to other manufacturers. “It’s a hybrid model,” she said. “All the apparel and swimwear is designed by this group internally.”

The first collection that Op will handle on its own will bow in Spring 2006. Op provided a sneak peek at that selection of sportswear and swimwear on June 13 at a launch party in Beverly Hills. (See related story, this page.) The cord shorts and rainbow stripes returned. Available in fat and thin wales, the juniors shorts came in baby blue, burgundy, white and tan and extended to mid-thigh or the knees. The tees were dyed in subdued colors. Terry cloth enhanced the ’70s feel.

Baker said Op will narrow distribution to surf shops, better specialty chains such as Nordstrom Inc., boutiques and better department stores including Bloomingdale’s Inc. Op previously sold to bargain retailers such as J.C. Penney Co., Kohl’s Corp. and Mervyn’s LLC. But Baker said Op will not keep those accounts. He declined to provide projections for revenue, although he said he expects menswear to contribute 60 percent of sales and juniors to contribute 40 percent.He said Op is also looking at different acquisitions as part of the Warnaco deal.

Lowe said it makes sense for Op to limit its distribution. “It is tough to really build a brand and the cachet of the brand when it’s sold in the mass channels,” she said.

Siskar said the sweet spot for the company is 18- to 19-year-old kids who are starting to set their own path. Advertising will include television commercials and layouts in magazines such as Surfing and Filter.

“We don’t want to pigeonhole our brand as a retro or vintage brand,” Siskar said. “We want to reestablish the fact that it is the original true California beach lifestyle brand.”