Still Riding Surf-Wear Wave : OP Founder Sees Sunny Outlook for Sports Clothing : JIM JENKS

As a surfboard dealer in the early 1970s, Jim Jenks could plainly see how the fashion market had failed to cater to his clientele.

Swim trunks did not fit surfers right. They crimped around their legs when they paddled out to catch a wave. The back seam was vulnerable to ripping out.

Jenks’ response was to design his own line of trunks specifically designed for surfing. The venture he co-founded would become known as Ocean Pacific Sunwear Ltd.

The company went on to become the international giant in the surf-wear industry. About a third of all “California lifestyle apparel”--as clothes for surfing, volleyball and skateboarding are known--carry the label of OP or one of its subsidiaries.

The company, with sales of about $300 million a year, has broadened its product offerings to include lines ranging from children’s wear to winter jackets.

The company established itself in its first few years in business. It was such a success that Jenks retired after eight years to cruise the world on a huge motor yacht. And he might have stayed at sea had it not been for the sudden death of OP President Larry Ornitz in 1988. Jenks decided to come back to personally steer the company.

An affable man who was wearing a baggy tropical-print shirt during a recent interview, Jenks said he has no regrets about his return. “I love it. It’s great. It’s like coming home,” he says.

Today, Ocean Pacific, headquartered in Tustin, manufactures its own swimwear and walking shorts in a product line for the youth market. In addition, its Newport Blue subsidiary specializes in sportswear aimed at men in their 20s and 30s. The company also makes surfing wet suits through another subsidiary, Hydro Light. The remainder of its OP clothing is manufactured by various companies that license the OP label.

Jenks talked with Times staff writer Chris Woodyard about trends in the Southland surf-wear industry.

Q. Where does the surf-wear industry stand right now? What’s hot and what’s not?

A. Southern California, with so much surfing here and the active lifestyle, kind of generates active companies. And surfing, like skateboarding or anything else, is very cyclical. It goes up; it goes down. Right now, you are seeing a very strong comeback of surf-wear. It got diluted the last couple years by the real active looks of volleyball and the tail end of skateboarding. If you take all of the other fringe sports and watch them go up and down, surfing will always kind of flow through the middle. It remains very constant. You can see that in the very rapid rise of some companies like Quiksilver or Billabong that bank their whole look on surfing. Our core is surfing, but we will have fringe areas. We happen to believe very strongly in snow boarding, and we are moving into that area. This not only gives us a year-round business, but snow boarding has really caught on. It’s incredible.

Q. What are the differences among the surfing, volleyball and skateboarding looks?

A. The surfing look, the actual in-the-water look, has gone to more of a fitted look with Lycra, with combinations of rubber and Lycra, more of a wet-suit type of look. And as far as casual wear, it’s more of a fitted waistband instead of an elastic waistband, whereas if you take volleyball, it’s strictly an elastic waistband kind of look.

Q. What’s behind the recent move back to surf wear?

AI think that there are so many items out there to choose from that your basic surf look is something that the customer understands. It’s not as confusing.

Q. Do you expect a shakeout in this industry? And, if so, which firms do you expect to survive?

A. I do feel there will be some sort of shakeout because there is just too much going on now. And I think retail will dictate that. We have noticed lately that the stronger retailers are taking more of a stand with one or two brands, instead of three or four brands. That will clean that part of it up. The companies out there that have the best distribution are the ones that are going to make it. And those are going to be your larger ones, such as Gotcha and Quiksilver.

Q. In essence, would consolidation tend to make consumers more brand-conscious?

A. I think that one of OP’s biggest assets is that it is now a mature brand with brand recognition. And Quiksilver is now becoming a mature brand. They’ve been around long enough to where their name is recognized. We are a safe business for a buyer. They are going to go with people like us who they know will perform for them, who are not a flash in the pan and who will be there for the long haul.

Q. Is the average customer getting older or are you still trying to appeal to the younger customer?

A. Hey, the whole world is getting older. The demographics show now that there are more older people than younger people. We still cater towards our age group. We find a lot of older people are dressing down, trying to look younger.

Q. And that helps the surf-wear industry?

ASure.

Q. Are you having to cut clothes differently or go about it in a different way?

A. I think styling and designing dictates the fit of the clothes. We do a lot of baggy looks and some things are cut really true to form. It depends on what the style is.

Q. Do you think T-shirts will continue to be strong in the surf-wear industry or is it going to go to a more fitted-shirt look?

A. No. I think T-shirts are going to remain strong. I think that’s one area where you are going to see a lot of shakeout. But the T-shirt business is still a strong, basic business. I think you are going to see better art, more cut-piece type screening, and a lot more life brought into what we know as the T-shirt business.

Q. Have other manufacturers tried to create a year-round business by going into the ski or snow-boarding markets?

A. Yeah, some have. O’Neill has tried to do that. And I think they were successful with it. We feel that in Southern California there is a real lifestyle where guys that are out there surfing in the summertime are usually skiing or doing something in the winter. And we feel that snow boarding is close enough to surfing that it really appeals to our customer base, and we want to take advantage of that.

Q. Has the disarray in the retailing industry hurt the manufacturers at all?

AGolly, I’ll tell you, I wish I knew what was happening in the retail industry. With so many (major retailers) in financial trouble, it’s been tough for a lot of people. We really concentrate our distribution toward specialty stores so we were not as affected as some manufacturers were.

Q. Why does California lifestyle wear remain popular in the East, Midwest and other parts of the country?

A. We depict a lifestyle that’s fun, that’s active, that’s carefree, and people want to relate to that.

Q. Do you think the neon colors that are so popular in swimwear will continue to stay popular?

A. We feel it is starting to fade out right now. We feel that it’s gone from bright to a washed-down bright, to a washed-down highlight. Instead of a shirt being a solid yellow wash down. It might be gray now, with just a pinstripe (of neon color) going across it to highlight it.

Q. Where is the trend heading?

A. I think we are going to get back into basic colors again. I think you are going to see more blues and grays. Denim is becoming extremely strong again. Denim has always been there. It’s a good strong market. But in our market surfers got away from denim and got into very loose printed pants--the very unconstructed type of look. And now we see a little swing back to very casual denim looks.

Q. Do you think there is enough product differentiation among the various surf-wear makers?

A. I think we try to stay as different as we can, but a print trunk is a print trunk. And a silky shirt is a silky shirt. We bump rails from time to time. It’s not something we do on purpose. We just go out and do our own thing.

Q. Is licensing, rather than manufacturing, the big trend?

A. Licensing allows you to build your business faster if you have a limited capital base. And it does cut down some exposure--inventory, a lot of overhead, that kind of thing. The thing we like about licensing is you can really get behind a certain segment of your business. It allows us to grow each part of our business because there is an individual who is responsible for each part.

Q. What are the downsides of licensing?

AA weak licensee. One that gets in trouble or something. Then you have to step in and take it over.

Q. Wouldn’t there be a certain amount of control that’s lost to a licensee?

AYes, if it’s not structured right. We have our licensing set up so we do have control over the product, over the quality and the distribution and that’s what makes us different from most licensees.

Q. From the licensees’ standpoint, wouldn’t they feel a sense of loss of control over their business to have a company calling shots for them?

A. When you license, you are stepping in and taking a piece of business that is already established. You don’t have to grow that business. Your risk is very minimal. You may give up some sense of control, but you have a guaranteed business and that’s the price you pay for a guaranteed piece of business.

Q. How does a surf-wear manufacturer go about picking the most qualified licensee?

A. It’s like anything else. It’s like you are buying a business. We look at them and try to measure their financial strength. We look at how they manufacture. It’s a certain amount of due diligence to try to find the best.

Q. It seems like the trend is to have a separate product line for every kind of sport.

A. Yes. People are more health-conscious now. Southern Californians are finding they can run or surf or play volleyball . . . on almost a year-round basis. They feel better and they want to identify with a particular sport. Surfers want to identify with what they are doing, and volleyball players want to be able to walk down the street and have people say, “That person plays volleyball.”

Q. Is that good or bad for the surf-wear industry?

AI think that’s really good because, even though there is a lot of crossover, it makes guys take a stand and say, “I’m a surfer and I’m proud of it.”

Q. Doesn’t that mean, though, that you have to make that many more lines, knowing that sales may be limited in a particular line?

A. No, not really. There is a lot of crossover in there. I think what’s happening now is the casual look--the out-of-the-water, off-the-court look--is pretty much the same. When you are actually doing the sport, there are clothes that are dedicated to doing that. But when you get out of the water, and a guy reaches down and pulls on a pair of elastic side-seam shorts, it’s whatever color, whatever trim, whatever fit he likes. That’s what he is going to put on. So I think there there is some real competition for that market. But once you are in there doing your own sport, you are going to dress appropriately for that.

Q. Is there are large wanna-be segments in these sports, people who want to look like they participate in a sport but are actually very casual participants?

A. Yeah, there is. There’s a certain amount of that. I don’t know if any (surf-wear maker) gears their line toward that. We make our stuff to work. Everyone wants to be somebody. I want to be a race car driver, but I don’t walk around dressed like Mario Andretti. You’re going to do what you feel comfortable with.

Q. Is it important for a surf-wear manufacturer of your size to have a strong presence in surf shops?

A. First of all, you can’t just make a living and support a brand in just those stores. You want to be there. You want that presence. You want to support those guys who have supported you through the years, and it’s very important you are there. But if you look at surf shops today, compared to when I first started selling in surf shops, they are completely different. When I first started to sell them clothes, I had to sell them the rack to put it on because all they did was make surfboards. And they might have had a few wet suits in there, but it was all hard goods. And I had to (say to) them, “Hey, put this in and you are going to sell this and you are going to make this amount of mark-up. You’re going to make money off this.” We literally educated them. Now you can go to Ron Jon Surf Shop in Cocoa Beach, Fla., and I think they are one of the largest Levi’s 501 dealers in the country. Surf shops are very sophisticated now. They are regular, specialty store retailers. They’ve got computers in the back room; they’ve got inventory control and they’ve got buyers. It’s a whole different business now. And you handle those people just like you would specialty stores or anyone else.

Q. Given that, I’m not sure I understand why you believe that surf-wear makers need to branch out into other types of clothes.

A. I think that you have to understand how a business grows. If you want to maintain a certain size, build just swim trunks and sell to surf shops in Southern California, then you can do that and you make a damn nice living. Everything would be fine. But you are only going to reach a certain size. If you want to expand your business, then you are going to have to start making shirts to go along with those trunks, and then you are only going to get to a certain size. It depends on how far you want to get in life. Our hook is surf-wear, but we make jackets, shoes and children’s wear. But our thing is surf-wear, and everything grows around it.

Q. Is Orange County going to remain the center of the surf-wear industry?

AIt’s definitely here. You have all your major guys around Orange County. It’s a great place to live. We needed to be in Orange County to be close to the airport for shipping and close to the truck lines. The office help, the labor, the buildings--everything is better up here. And we’re still close to waves, and that’s important. You have to be where you want to be and this is as far north as I’ll ever go.

Q. Do the continuing existence of sweatshops pose a problem?

AUnfortunately, there have been people who have taken advantage of the Mexican labor force in Southern California in sweatshop situations. I know authorities are doing all they can to clean that up, which is great. We do a lot of our manufacturing offshore where we import our goods and any of our licensees that actually own their own sewing shops are legitimate manufacturers.

Q. Is that one of the things you look for when you look for a licensee, that they are paying adequate wages?

A. Absolutely. We check all that out.

Q. What is the strongest marketing tool for surf-wear manufacturers today? Is is promotional events, such as surfing contests, or advertising?

A. I think you have to do it all. I think you have to advertise. You have to advertise in the right publications. I think that television is becoming more important to us. It’s very expensive, and you’re going to find only the bigger guys are going to be able to afford to go into it. I think that surf contests, surf teams, anything you can do along those lines are very important in keeping your product name and image out there.