ONeill Clothing’s decision to sponsor the U.S. Open of Surfing in Huntington Beach is a signal that the company plans to compete more fiercely with industry titans such as Quiksilver and Billabong, executives said.
“Our growth has been really strong the last year or two, and we feel very confident in stepping out and spending a lot more money to broaden our whole marketing program,” said Chief Executive John Warner.
When Warner, an industry veteran who has worked for Quiksilver and Ocean Pacific, joined ONeill Clothing in 1996, the company logged less than $10 million in annual sales. Since then, the company, which employs about 100 people, has strengthened its position, and last year domestic sales of its clothing reached about $50 million.
The management team has been beefed up, and the company recently created a separate sales and marketing unit for its women’s division, which accounts for 35 percent of sales. The ONeill brand can now be found alongside Quiksilver, Billabong and Hurley clothes at Macy’s West stores, its first foray into a department store. ONeill’s relaunched boys and accessories divisions are growing rapidly. All of the initiatives helped sales grow 25 percent in 2002.
“It seems like a brand that is on a roll,” said Sean OBrien, editor of TransWorld Surf Business.
ONeill has also developed a “meaningful” business with Anaheim-based PacSun, which has 613 stores in malls across the country, Warner said.
“We have a great business with them, which has enabled us to put more money into marketing — with our team and athletes,” he said. “Weve expanded our media dramatically,” he said.
But surf shops make up the backbone of the clothing business, and the reputation of the 50-year-old ONeill wet-suit brand, made by ONeill Inc. of Santa Cruz, makes it a player in that distribution channel, said OBrien, of TransWorld.
“For surfers, the name ONeill carries a lot of allure,” he said.
Privately held ONeill mostly sells its clothing to surf shops that also carry its wet suits, creating a more powerful brand, a strategy appreciated by stores like Killer Dana Surf Shop in Dana Point.
“They dont sell (clothes) to every store, which helps,” said co-owner Chris Andrews, who said ONeill is his third-highest-selling brand behind Quiksilver and Billabong. “When you think of ONeill, you think of surf.”
That’s why James Leitz of sports-marketing agency IMG, which owns the U.S. Open and has struggled to attract a credible surf-industry sponsor, is so excited to have landed ONeill.
“ONeill brings as much heritage and history and expertise within the industry than we could ever have dreamed of,” he said.
At the U.S. Open, the ONeill name will be seen on banners, heard on the public address system, and worn on the clothes of the television announcers, Leitz said. ONeill athletes will host autograph-signing sessions, and ONeill parties will be hyped.
A sister company of ONeill Clothing, Lost, will sponsor the junior event. Warner and five partners, including former Los Angeles Laker Kurt Rambis, own both the ONeill and Lost licenses. ONeill Inc. does not release annual sales figures, but in 1994, industry estimates pegged the total in excess of $100 million.
