Ocean Pacific Apparel Corp., one of the oldest names in Southern California's surf wear industry, is about to get a new owner.
Richard Baker, chief executive of Irvine-based OP, and Montreux Equity, a San Francisco venture capital firm, are in the final stages of a deal to buy OP from Berkeley International Capital Corp.
Baker would not disclose terms of the deal, which he said will be completed by month's end.
The buyout is the latest move in Baker's strategy to reinvent the casual-apparel company--once the biggest name in the surf niche--into a holding company that will buy and manage other apparel brands.
"As soon as the OP sale is completed, we're looking at other brands," Baker said. "The whole concept is to place these brands in noncompeting tiers of distribution."
Among the labels Baker would like to acquire is Billabong USA, which is up for grabs after its president, Bob Hurley, announced earlier this month that he would not renew his license with the Australian-based company when it expires next year. Hurley is launching his own surf wear label.
Baker said he is also talking with other well-known surf labels, but he declined to name them.
His confirmation of the pending acquisition of OP puts to rest industrywide rumors that Irvine-based Gotcha International was on the verge of buying OP.
Baker, 51, is not the first to promise to revive the OP name, but his experience indicates he may have the best chance.
He is a former president of Tommy Hilfiger's women's division, of Bernard Chaus Inc. and of Esprit Womenswear. Baker joined OP in February 1997, replacing acting CEO Jim Skelton, a senior vice president at Berkeley International.
At Hilfiger, Baker was responsible for the development and management of the women's product licenses. Upon arriving at OP, his first priority was to upgrade and reconfigure the company's licensing operations. OP hires outside manufacturers to make its apparel, footwear and accessories, but it oversees the design and marketing of the products. The company gets a percentage of sales made by its licensees.
Licensing has been integral to OP's growth almost since the beginning. The company was founded in 1972 by surfboard maker Jim Jenks and, along with San Diego-based Hang Ten, was among the first to take Southern California's surf look national.
OP became a widely emulated leader in the industry, and at its peak, sales from its worldwide licensing operations topped $400 million. Last year, the company's 17 licensees posted sales of about $110 million.
The company fell on hard times in the early 1990s, largely due to rising debt, competition from street-oriented fashions and its efforts to shed its manufacturing operations to focus solely on licensing. OP filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in May 1992.
Berkeley acquired OP's assets a year later. Officials there could not be reached for comment Tuesday.
Montreux is a venture capital partnership formed in 1993. It helps finance the operations of small and growing companies in exchange for an ownership stake and makes money by cashing in its stock when the companies go public.
One of its triumphs is Peapod Inc., a money-losing grocery-shopping online and delivery service that raised $64 million in an initial public offering last year.