He’s Not a Passive Investor : Rambis Trades Laker Bench for Board Seat at Irvine Sportswear Firm

Basketball star Kurt Rambis has exchanged his seat on the Los Angeles Lakers’ bench for a board seat at La Jolla Sport USA, an Irvine company that recently acquired U.S. rights to sell a popular line of surfing apparel.

Rambis, 35, acquired an unspecified stake in La Jolla Sport, which hopes to bolster sales of the O’Neill Sportswear line by capitalizing on Santa Cruz-based O’Neill Inc.’s reputation as a leading wet suit manufacturer.

Privately held O’Neill’s worldwide revenue topped $100 million in 1992, largely upon the strength of its wet suit sales and the overseas sales of its sportswear. But O’Neill’s domestic sportswear sales--hindered by troubled licensing arrangements--accounted for just 15% of the total.

O’Neill, founded in 1952 by legendary surfer Jack O’Neill, did not disclose a purchase price for the deal.

Rambis, waived last week by the Lakers after a 13-year career in the National Basketball Assn., said he’ll be more than a passive investor at La Jolla Sport.

“I’m not a design-type person, and anyone who knows me knows that,” Rambis said. “But I’m not content to be an investor who just throws money into the company. . . I’m going to learn as much as possible about the company . . . and really do my part to make this work.”

La Jolla Sport is a division of La Jolla Sportswear, which manufactures tailored men’s suits and sports coats. La Jolla Sportswear will report about $44 million in 1993 revenue.

La Jolla Sportswear will continue to focus on stylish men’s clothing, but the new division will keep the O’Neill Sportswear line targeted directly at younger, cutting-edge surfers. “O’Neill has the hard-core reputation in the surf wear industry that is essential for success in this business,” said La Jolla Sport President Tom Williams.

About 15 Pacific Outlook employees who handled O’Neill’s sportswear design, merchandising and sales have joined La Jolla Sport, Rambis said.

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O’Neill has dominated the wet suit market, “but it has to be the most under-utilized name in the whole surfing industry,” said Dave Hollander, co-owner of Becker Surfboards, which has shops in Mission Viejo, El Toro, Malibu and Hermosa Beach. “They’ve got great demographics . . . but they haven’t been able to bring (sportswear) product to market in a consistent fashion in this country.”

O’Neill “makes damn good suits,” said Paul Holmes, a marketing executive with Hang 10 International, a San Diego-based surf wear competitor. “But . . . they haven’t had such good fortune in translating that quality name into (domestic) sportswear.”

The O’Neill sportswear line ran upon hard times earlier this year when its former sportswear licensee, Anaheim-based Pacific Outlook Sportswear, entered bankruptcy proceedings. Pacific Outlook laid off 100 employees and blamed its financial woes on an ill-advised expansion and a heavy debt load.

O’Neill President Pat O’Neill said La Jolla Sport is attractive “because they’ve got an organization in place that’s allowed them to stay in business for more than 50 years.” La Jolla Sport will also benefit from tight links to O’Neill’s corporate design center in Santa Cruz, O’Neill said.

Rambis made his investment along with two longtime friends, former Dallas Cowboys football player Doug Cosbie and Richard Brown, a Los Gatos-based financial adviser. Rambis, Cosbie and Brown attended Santa Clara College. Brown’s brother-in-law, Tom Williams, will operate the business.

Rambis, a Manhattan Beach resident, said much of La Jolla Sport’s future growth will come from snowboarding apparel sales. “Surf wear continues to grow,” Rambis said, “but we see snowboarding apparel as probably the fastest-growing (segment) right now.”

O’Neill faces stiff competition from Ocean Pacific, Quiksilver, Body Glove and other surf wear companies that hope to dominate the snowboarding apparel niche. Quiksilver recently reported that its winter snowboard apparel orders are up by 80% over last winter’s record sales.

La Jolla Sport’s surf wear line could grow to “between $30 million and $50 million (wholesale) in the next three to five years,” Wilson said. “And that’s not including the women’s and children’s rights, which we also acquired.”

Rambis, who’s never been regarded as a fashion trendsetter, acknowledged his limitations. “I’ll have some good ideas which I’ll expect to be used,” Rambis said. “But I’ll also expect people to (occasionally) tell me to take a hike.

“I bring a good solid work ethic to the company,” he said. “I’ve been involved with sports since the sixth grade, I live down at the beach and I can relate to the kids who like to go down and hang at the beach.”

Rambis described La Jolla Sport as “the kind of investment I wanted to get into for some time now. . . . Of course, I didn’t anticipate my career coming to an end as quickly as it did.”

Rambis was waived on Dec. 14, following a 13-year pro career. He was let go moments after being called off the Lakers’ team bus in Detroit, two days before he was due to earn a $250,000 annual bonus.

La Jolla Sport Marketing Director Gemma Turi maintained that Rambis’ unexpected departure from the Lakers won’t dilute his value to the company. “I’d much rather have a highly visible athlete like Kurt who’s available to go to different openings and make appearances than someone who’s not available because they’re out of town,” Turi said.