Nike Buys Hurley International

Beaverton, Ore.-based Nike Inc. recently acquired surfwear manufacturer Hurley International, creating a relationship that will facilitate international growth of the Costa Mesa, Calif.-based surf brand.

“It’s kind of like buying into our future,” said Bob Hurley, who founded Hurley International in 1998 after leaving Billabong USA. “We have ideas for the brand globally and we felt the best way to do that and control the brand was to partner with someone who can take us to Japan, Australia and Morocco.”

While the terms of the deal remain undisclosed, Hurley said that the relationship with Nike will not only provide funding for expanding international infrastructure but will also provide access to the relationships and experience Nike has established from its own business affairs overseas.

“For example, if we are looking for a warehouse in Milan, they will know where makes sense,” said Hurley. “Nike will provide software and central sourcing for the planet. We can learn from their experience with the whole myriad of mistakes they’ve been able to learn from over the past 30 years.”

Word of the deal sent shock waves through the surf industry with fears that the surfwear manufacturer would lose its independence under the sneaker giant. Hurley, who will remain president of Hurley International, said those fears are unfounded.

“I’m not concerned, because I’m still in charge of the company and my management team and sales force are still in place,” said Hurley. “We now have the ability to expand globally without using our own resources.”

Hurley also tried to dispel fears expressed by core consumers and retailers who imagined that the brand would now move away from key surf shops and into larger retail chains under Nike’s guidance.

“Fiction spreads faster than truth,” said Hurley. “Rumors are causing people to get upset. We intend to keep our current distribution and not blow it out to mass retailers. It’s Nike’s desire as well to keep our Hurley distribution and retailers.”

Hurley, who said he initiated the deal with Nike, emphasized that it is part of the company plan based on the goals he set when he left Billabong.

“When myself and my management team started Hurley, we had a 10-year plan and we’re going to continue our plan,” he said. “I approached [Nike] and said here’s what I plan to do and there’s been no changes to that.”

In addition to the international expansion, Hurley said that the company may introduce other product categories domestically, while leaving the original distribution and original products in place.

“We’re a teenage lifestyle company,” he said. “We think that we can keep our distribution clean and go into other product categories like Roxy, which has amazing product categories. With Nike, shoes is a natural fit, so we may do shoes.”

Hurley said that he is hopeful that the buyout will be beneficial to both the brand and the retailers who carry it, but ultimately, the proof will be in the results. He also said he hoped the deal would benefit the surf industry overall. He noted that after surf giant Quiksilver issued its initial public offering in 1986, the company was able to broaden its consumer offerings and, industry-wide, it paved the way for other publicly traded surf and skate companies.

“Hopefully that will be the case here,” he said, adding, “What a company says isn’t very important, but what a company does is. Everyone should keep an eye on what we do. It will be interesting.”