COSTA MESA, Calif. — Hurley, the action sports brand owned by Nike Inc., wants to break out of the O.C.
Looking beyond its Orange County home turf and the board sports companies that emerged there, Hurley has hired key executives from New York-based contemporary label La Rok, surf rival Roxy and entertainment giant Walt Disney Co., and is focusing more on the crucial women's sector.
"We don't want to be a one-dimensional white boy, Orange County boys' club," chief executive officer Bob Hurley, the onetime surfboard shaper who started the company in 1999, said in an interview at headquarters here. "We welcome outside talent."
The company hired Jenna Wilson from La Rok in March to be design director of the young contemporary division. Wilson's appointment followed the arrival in July of Maria Barnes, former sales manager for swim and accessories at Roxy, to be general manager of young contemporary. A year ago, Dennis Green, a former executive at Disney and Nike, became senior vice president of production and creation.
Hurley struggled after being acquired by Nike in April 2002, but lately has hit its stride, said Christy Glass Lowe, who follows the action sports industry for USBX Advisory Services LLC in Santa Monica, Calif. "Women's is a key growth area....They are definitely developing a more serious and broad line," she said.
In addition, Lowe said Nike affirmed its commitment to the brand and the action sports sector. "They're going to spend some serious resources," she said.
When Nike announced the deal, Hurley said it had $70 million in 2001 sales, and reports valued the acquisition at more than $100 million. Nike doesn't disclose sales for its subsidiary brands. But in its fiscal third quarter ended Feb. 28, the athletic giant said sales in the group that included Converse, Hurley and Cole Haan increased 15 percent to $522.7 million. Nike's total revenue climbed almost 9 percent to $3.93 billion during the same period.
Soon after the acquisition, Hurley introduced its first line of shoes, which are designed and distributed through Converse. It launched a children's line last fall and plans to expand the pajamas, boxer shorts and socks it has offered with new underwear and sleepwear lines this year."We try to take advantage of all the assets that Nike has," Green said, noting that Hurley has realigned its production and design teams to work in one group, following the same timeline, process and guidelines. For instance, Hurley dispatches employees to Nike headquarters in Beaverton, Ore., to do research for clothes and shoes. As a result, Hurley used a water-resistant, stretch fabric that Nike developed for Olympic swimmers on men's and women's boardshorts.
Nike also decides on growth, such as the opening of Hurley's first freestanding store. Hurley has about 600 accounts, including Macy's, Buckle, Zumiez, Fred Segal and Active. It operates three outlet stores in the U.S. and has one shop-in-shop at Huntington Surf & Sport in Huntington Beach, Calif.
The shop-in-shop layout favored men's clothing. Entering from Main Street, shoppers face baseball caps, walking shorts and T-shirts on a metal shelf and wooden crate. Two female mannequins flanking the sliding glass door modeled checkered microshorts and a squarenecked polkadot sundress from the young contemporary line. But the majority of the women's products, including $109.99 pink rectangular sunglasses, $74.99 white jeans, $23.99 T-shirts decorated with colorful scribbles and $44.99 leather flip-flops, were in the back.
Sitting across from Hurley's shop on a recent Saturday, Karina Papirian, 13, from Westminster, Calif., said, "It's more of a guy's brand." She spends $100 to $200 each month on clothes from other companies including Hollister, Roxy and Volcom.
For Allison Trachy, a 30-year-old administrative assistant at a local mortgage company, Hurley's styling is cute and its quality is high, but the prices are daunting. "As a girl on a budget, I'd rather go to another shop and get a bargain," Trachy said.
Therein lies the challenge. Although Hurley said the company places equal importance on the men and women's divisions (each has about a half-dozen designers and a graphic artist), Barnes acknowledged that her young contemporary group contributes only 35 percent of total sales.
As for shoppers' pigeonholing Hurley as a guy's brand, Lyndsey Roach, director of marketing for young contemporary, said Hurley's style can be described as "a clash of the masculine and the feminine."Hurley is stepping up efforts to target women. It advertises in women's magazines Foam and Preen as well as publications focusing on youth culture such as Mean Street and Alt Press. Its marketing was nominated this year for best women's ad campaign by the Surf Industry Manufacturers Association (Billabong won).
Roach said Hurley is concentrating on grassroots marketing, such as its sponsorship of a lounge dubbed Girlz Garage on the Vans Warped Tour (music and skateboarding). Last June, the brand kicked off high school fashion shows called Walk the Walk, in which schools stage their own runway presentations featuring Hurley clothes. In return, Hurley learns how real kids interpret the brand on the runway.
The brand also recruited 15- to 16-year-old girls, including Tessa Keller from the reality TV show "Laguna Beach," to be ambassadors in its so-called YC (Young Contemporary) Army. In exchange for free clothes, the teenagers review designs, provide feedback and model outfits at trade shows.
Hurley invited retailers to its headquarters for focus groups, said Akram Abdel, who handles marketing and buying for Jack's Surfboards in Huntington Beach. He said it was important for Hurley to listen to retail buyers because it hit a plateau after the acquisition in 2002. Plus, key employees, such as former creative director Lian Murray, left Hurley.
Abdel, who visited Hurley last spring with his men's and women's buyers, said the brand listened to his team and implemented their suggestions, such as producing T-shirts that don't display the Hurley logo.
In the young contemporary holiday collection, which will be unveiled today at the ASR Trade Expo, Hurley will offer a double-breasted peacoat in fleece and a "break-up, make-up" hoodie bisected by a zipper running vertically down the hood and torso to allow the wearer to mix and match the halves printed with stars and stripes.
Wilson said next spring's collection will integrate four themes: bright colors and shiny metals, sporty fashion as characterized by metallic mesh textiles, bold prints such as stripes and an Eighties tribute with acid-wash jeans in turquoise and pink. Hurley said the brand differentiates Hurley from competitors. Aiming to be inclusive and reach out directly to teenagers through grassroots marketing, he said, "We want everybody to have a voice in our brand."
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