CIT: Why more U.S. apparel companies are "reshoring" their manufacturing.
ROTH CAPITAL PARTNERS: Hosting 27th Growth Stock Conference March 8-11 in Dana Point, Calif.
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I had many interesting conversations at Surf Expo and ASR, and now that all the traveling is done, I have time to write about the key interviews from the shows.
One of my most informative talks was with Bob Hurley. We discussed several things, including what's next for the Phantom boardshort series and how its success has impacted the company's overall approach to product, how Hurley is adapting to the tough economic times, how it is helping retailers, and how the company's challenges four years ago helped prepare it for today's environment.
Named "Boardshort of the Year" last year at the SIMA Image awards, the Phantom proved to many that consumers will pay for a high-quality product. Now, Hurley has created a tiered strategy for Phantom, with prices ranging from $100 to $55. Bob said he's been wearing the inexpensive ones, the P60, which he called "amazing." "I'm very proud of (Phantom)," he said.
Hurley is applying thinking behind the Phantom to the rest of the company. "The idea of innovation and excellence - and don't accept the status quo," Bob said.
Bob said Hurley is going to make less product, but better and more special product going forward. He said the company is challenging itself with each style, asking, "Do we really need that?" The company wants to set a high standard for what it produces, which will also benefit retailers, he said.
Hurley is placing larger bets with select retailers, he said, and really trying to help those that are struggling. "We tell them, ‘Our job is to help you make money,' " he said. And that doesn't mean selling retailers more goods, Bob said. That may mean selling them less SKUs so that their stores aren't crammed with too many styles. "Narrow and deeper can be a good thing," he said.
Hurley initially struggled to keep up with its rapid growth after Nike acquired the company in 2002. It has clawed its way back by relentlessly focusing on consumers, celebrating the Hurley DNA, listening to retailers, and creating innovative products, according to other interviews I've had with Hurley executives and with retailers.
Those are similar to the strategies other brands are talking about now, after the economy has nosedived. I asked Bob if Hurley's past struggles helped prepare it for the marketplace of today, since the company had to do a lot of revamping and rethinking to turn itself around.
"We had our recession four years ago," he said.
The process was sometimes painful, Bob said, and he credits Hurley CEO Roger Wyett for leading the way. When Roger came to the company, he would talk about Hurley's results in public forums, which made Bob uncomfortable. "It was embarrassing, because it wasn't good," Bob said.
But Roger told him, "I want the whole world to know. Because we are going to fix it."
Bob said the company is "making progress, but has a long way to go. We are not patting ourselves on the back. We believe in kids, and we are trying to give them a voice. ... And our team has good mojo right now and is really working together well."
Hurley's results show the improvement. Parent company Nike Inc. said Hurley's revenues rose in the high teens in the quarter ended Nov. 30.
"Even the economic circus can't keep great ideas and great energy down," Bob said.
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