U.S. Team Being Put Together by Billabong

Billabong Australia said Wednesday it will put together its own management team to head the company’s U.S. operations.

Company founder Gordon Merchant, who will oversee the enterprise, is “well advanced” in enlisting some of the U.S. surf industry’s “most respected people” to guide the operation, Billabong said in a statement.

The announcement comes 11 weeks after surfwear industry titan Bob Hurley announced he would split from Billabong to launch his own beachwear line, Hurley International.

Billabong’s new U.S. operation will involve about 150 people, including six top executives, said Dougall Walker, Billabong Australia’s international marketing manager.

The company has spent weeks interviewing prospective employees, but is not releasing the names of those it intends to hire because some of them are still employed elsewhere, he said.

Industry insiders said Wednesday that Billabong’s new operations could shake up the status quo within Orange County’s surfwear industry, which racked up an estimated $1.7 billion in sales last year.

Some said the team’s formation presents a rare opportunity for executives at other companies to snag top jobs with Billabong, an established company with a very popular label.

“I betcha lots of people are sharpening up their resumes,” said Peter Townend, marketing director for the Irvine-based Rusty Apparel, widely considered the No. 3 surfwear company among the hard-core surf crowd, behind Billabong and Costa Mesa-based Quiksilver Inc.

Defections may already be underway.

Richard Sanders, a salesman with Hurley’s Billy International Ltd. for 10 years, left unexpectedly last week, Hurley said. He also said Wednesday that he doesn’t know if Sanders plans to join the Billabong camp. Sanders could not be reached for comment.

In addition, Shaheen Sadeghi, founder and president of The Lab anti-mall in Costa Mesa, said Wednesday that he has talked with Merchant about helping finance the new company. But he would not say whether he will be part of the new venture.

“I can’t tell you where we are. It’s too sensitive right now,” said Sadeghi, who was previously president of Quiksilver Inc. and, before that, executive vice president of Gotcha International in Irvine.

Walker wouldn’t say whether Sanders or Sadeghi are being enlisted. He did say that Billabong Australia will finance the U.S. operation.

As was the case with Hurley’s operation, Billabong intends to handle the design, marketing and administration at its new Orange County offices while the clothing is produced elsewhere, Walker said.

He said Billabong is currently negotiating lease agreements, he said.

Hurley, a surf scene insider who opened Hurley’s Surfboards in Costa Mesa about two decades ago, became Billabong’s U.S. licensee 15 years ago. He is credited with transforming the company into one of the nation’s top surfwear brands.

Currently, Hurley is running both Billy International and his own Hurley International from Billy’s Costa Mesa headquarters. Hurley will deliver the Billabong line until his contract expires in June 1999. He will show both lines at the San Diego trade show next month.

Walker said Wednesday that the new management team also will be on hand at the trade show to answer questions at Billabong’s international booth.

Some retailers believe that Billabong will do fine with the new team in place, largely because of Hurley’s contribution.

“It’s a strong brand that’s going to stay around,” said Chris Saenz, a buyer for Huntington Surf & Sport in Huntington Beach. “Somebody’s going to have to really screw it up to ruin it.”