Dropping In

Photo by Chris Van Lennep/
Surfing magazineA mere four years ago, when Bob Hurley split from Billabong to create his own surf-clothing company, few in the industry thought Hurley International would be more than a marginal line. They were wrong. With slick marketing campaigns, including sponsorship of pop-punksters Blink-182, Hurley grew from a backyard Costa Mesa brand to a $70 million nationwide company.

Then, on Feb. 21, Hurley laid down another ace, selling his company to footwear giant Nike Inc. According to Merrill Lynch, Nike dished out between $100 million and $140 million to enter the coveted surf-and-skate-lifestyle business.

Why did Hurley sell? "The deal changes our abilities to expand," he says, "and that has always been our goal: to become a global company."

On Internet forums that follow the industry, some surfers and skaters reacted venomously to Hurley's sale. "That's one of the signs of the apocalypse, ain't it?" wrote one critic on the Surfermag.com forum. "[Hurley] is Nike, and it's lame," said another. On the same site, another skeptic wrote, "I don't care how nice [Bob Hurley] is, he's just out to get himself richer on the backs of kids and those kids' parents."

But the cranks, whiners, anonymous pranksters, website commies and Luddites are few—and they're on the margins of power. Bob McKnight, chief executive of U.S. operations for Huntington Beach-based Quiksilver, is all smiles about the Hurley deal, figuring Oregon-based Nike will spread the surf lifestyle to the far corners of the globe.

"I think the competitive landscape will be a lot more challenging from now on," McKnight says. "But I definitely don't see it as a threat. I think they will help grow the Hurley brand, and that will promote the whole industry, which is good."

Surf Industry Manufacturers Association executive director Terry McCann also sees Technicolor rainbows at the end of the tunnel. "If this increases the visibility of the surf industry, that's a good thing; if other companies are hurt by it, it's not a good thing," says the Dana Point resident. "But I'm an optimist, and in the long run, I think it'll benefit our industry."

Nike's labor practices—the company is notorious for its use of a kiddie work force in Third World countries—have been a big issue surrounding the deal. But Hurley says the footwear company has new policies when it comes to suppliers. "I checked into Nike's labor practices before signing the deal," he says. "I wouldn't want to be a part of it if they weren't fair. They've made a lot of changes, and they have very strict guidelines."

Nike says its labor policies—which ranged from kind of cruel to hellish in the early '90s—have changed. "It took us until '98 and '99 till we got a good system in place," says Joani Komlos, a spokeswoman for the shoe company. "Our factories have to meet the country's standards as well as our own." Nike's standards? "We pay according to the local law's minimum wages, and our age standards are high: 16 [years old] for apparel and 18 for footwear."

"We're not saying we're perfect," Komlos says, "but we've learned our lesson, and our standards are much higher today."


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