O.C. Surfwear Maker Sold

By PATRICE APODACA

Oct. 25, 1997 12 AM PT

TIMES STAFF WRITER

COSTA MESA —

Ski equipment giant K2 Inc., hoping to capture more business from sporting enthusiasts, has acquired Katin USA Inc., a well-known Costa Mesa surfwear company with roots dating back to the early days of the Southern California surf scene.

The firm was sold this week to Los Angeles-based K2 by Bill Sharp and Rick Lohr for undisclosed terms. The pair will remain with Katin as president and vice president, respectively.

Though K2 is best known for its skis--it is the largest American ski manufacturer--it also derives a large portion of its $600 million in annual sales from snowboards, in-line skates, fishing tackle, mountain bikes and backpacks.

“K2 focuses on high-performance sporting goods for the enthusiast athlete,” said John Rangel, vice president of finance. Katin’s surfing apparel “is a natural for our customers.”

Also this week, K2 acquired Carlsbad-based Planet Earth, a fast-growing maker of skateboards and apparel that was started by Chris Miller, a top professional skateboarder.

Robert Marvin, an analyst at Seidler Cos. in Los Angeles, said K2 has “done a pretty good job of picking and choosing” acquisitions of well-regarded brand names.

In fact, the company is largely an amalgamation of brands acquired over the years. Formerly named Anthony Industries, the company was a pool maker before it bought K2 and its Vashon, Wash., factory in the mid-1980s. Founded by two brothers in 1962, K2 had difficulty competing against big European firms.

But in recent years, while other American ski makers have found it tough going, K2 has gained speed. It had three of the five top-selling skis in the United States last year.

Lohr said that Katin’s customers should see little change. He and Sharp will continue to run the company, with its 18 employees.

“We want to avoid everyone saying, ‘Ah, dude, you sold out,’ ” he said. But the firm needed “some serious firepower” to keep growing.

Katin’s board shorts, shirts, jeans and other apparel are sold in specialty shops throughout the United States and abroad. Sharp and Lohr, who began surfing while attending Corona del Mar high school in the 1970s, started the business in 1981 when they became the exclusive licensee of the Katin brand name.

The Katin name has been part of Southern California surfing lore since 1958, when Walter and Nancy Katin, who sold boat covers at their Surfside shop on the coast between Huntington Beach and Seal Beach, began making canvas surf trunks. Over the years, the shorts became favorites of surfing purists, who liked their durability.

Walter Katin died in 1967. Nancy Katin, who continued their Kanvas by Katin shop, died in 1986. By then, Sharp and Lohr were the sole licensees of the Katin brand.

With their Katin USA, the pair--now in their mid-30s--expanded the popular surf line into a wide range of casual clothing. The firm sponsors the Katin Team Challenge, an annual surfing contest in Huntington Beach that draws some of the sport’s top athletes.

The Kanvas by Katin shop, which is still in operation under separate ownership, was not part of the K2 transaction.

Katin’s sales have been increasing rapidly but pressures on profits from government regulations, increasing labor and manufacturing costs and stagnant retail prices forced them to seek a deep-pocketed partner, Lohr said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

K2 Acquires Katin

Sporting goods maker K2 Inc. has acquired Costa Mesa-based Katin USA. Details on the two firms:

KATIN USA INC.

* Headquarters: Costa Mesa

* Founded: 1958 by Walter and Nancy Katin

* President: Bill Sharp

* Vice president: Rick Lohr

* Business: Surf and casual wear

* Employees: 18

* Status: Private

****