RETAILING/SURF WEAR : Bankruptcy Court Approves Sale by OP of Jimmy’Z Division

A bankruptcy court judge gave the go-ahead Wednesday for the sale of the dormant Jimmy’Z division of Ocean Pacific Sunwear Ltd.

Jem Sportswear in San Fernando has agreed to a down payment of $300,000 for Jimmy’Z, a well-known label for young men’s surf-oriented shorts and shirts. Jem would then pay a royalty of 2% of net sales to OP, up to a total of $2.5 million. The deal is expected to close Friday.

“I’m glad that Jimmy’Z, which has always been a fun (trade)mark and a good mark, is going to a credible entity that should be able to do well with it,” said OP Senior Vice President Mike Balmages.

Tustin-based OP tried to sell Jimmy’Z in 1990 to a company called 199Z Inc. for $6.8 million, but resumed control when the new owners could not make the payments. Balmages said, however, that each of the Jimmy’Z licensees, who actually make the clothing, have fallen away in the past couple years. At present, the line is no longer being manufactured.

Balmages said that the sale will be good for OP, bringing in cash to help it through its Chapter 11 reorganization and allowing the company to devote more of its attention to its core Ocean Pacific and Newport Blue brands. The company is presently reviewing two offers for the sale of its Hydrolight brand of wet suits.

“Because of our internal financial restraints, we were never able to devote the resources that we would have liked” to develop Jimmy’Z, Balmages said.