Quicksilver’s New Clubhouse

Quiksilver has opened a community space on Abbott Kinney Boulevard in Venice, dubbed Quiksilver Edition Mission.

NEW YORK — With the spring launch of its Quiksilver Edition Santa Monica line, Quiksilver provided the 25- to 40-year-old surfer with something to wear. Now the Huntington Beach, Calif.–based surf company is providing them with somewhere to wear it: a community space on Abbott Kinney Boulevard in Venice, dubbed Quiksilver Edition Mission.

The 1,800-square-foot meeting place opened its doors in the bohemian neighborhood earlier this month, offering a range of lifestyle programs for the Quiksilver Edition Santa Monica guy.

Classes and events include yoga for surfers, wine tasting, live local music and theater—“anything that addressees the multidimensional lifestyle of the guy that wears Quiksilver Edition Santa Monica,” explained Josh Katz, head of communications for Quiksilver Brands, who has spearheaded the project.

Although the Mission doesn’t offer any Quiksilver Edition Santa Monica pieces for purchase, it does display merchandise throughout the space and offers Web kiosks for those interested in buying something from the line. More importantly, said Katz, the Mission serves as a marketing tool for the brand, which was recently revised to include Santa Monica, a collection that addresses the underserved surf consumer who sits between the younger-skewed Quiksilver and its aging parent, Quiksilver Edition. Katz expects to export the Mission to other cities including San Francisco, each with their own specific community-related events. He also believes the community-space concept is viable for other Quiksilver brands.

Of course, noted Katz, Quiksilver would be remiss not to use the Mission as a litmus test for possible future retail outposts. The company has made no secret of its interest in growing that segment of the business, as it continues to seek out a president of retail. On a recent conference call discussing the company’s second-quarter results, Quiksilver’s chairman and CEO Bob McKnight called retail “such a meaningful part of what we have going,” adding that Quiksilver has “even more ideas about [retail] coming up.”

Also on that call, Quiksilver executives acknowledged the difficult hard-goods business, reporting a second-quarter loss for the three months ended April 30.

Earnings were down $4.8 million, or 4 cents per share, versus a gain of $3.7 million in the same period last year. Revenues for the quarter, which were carried by the company’s apparel brands, were $603.8 million, up 17 percent from $516.9 million in the second quarter of fiscal 2006.

Although Quiksilver’s apparel brands—Quiksilver, DC Shoes and Roxy—were up more than 17 percent, the company’s equipment brands—ski brand Rossignol and golf label Cleveland Golf—showed a 4 percent decrease during the second quarter.

McKnight said the company has “taken aggressive action to improve the efficiency of the hard-goods business,” adding that Quiksilver is “looking at all strategic possibilities to accomplish this.”

Still, he remained optimistic about the potential of a lifestyle apparel business under Rossignol, adding that “some cooperative weather” would enable Quiksilver to get that piece of the business up and running in the U.S.

By region, Quiksilver’s European revenues were up 24 percent to $268.8 million, versus $217.1 million during the same period last year. The company’s American revenues grew to $279.8 million, up 12 percent from its $250 million in the second quarter of fiscal 2006.

Quiksilver maintained its full-year 2007 earnings outlook of $2.5 billion, with diluted earnings per share of 53 cents, but noted its quarterly estimates would shift earnings per share of 3 cents from the third quarter to the fourth quarter.