Nike Buys Hurley

It’s a hard pill for a lot of skate-industry veterans to swallow, and perhaps even harder for apparel companies that now face a competitor with access to unimaginable resources. Nike, the mainstream sporting-equipment colossus, launched the Savier footwear brand in 2000, recently reintroduced a line of skate-specific Nike shoes, and now owns one of skateboarding’s and surfing’s homegrown apparel brands. Did Bob Hurley just take the money and run? Not if you ask him.

The man who founded the company in 1998 says he signed the deal because it’s the best thing for the company, for its athletes, and for the cultures Hurley International caters to. After considering several options and speaking to a few potential partners, Bob Hurley and his staff were convinced Nike was the best option. “I presented them with our management team’s ten-year plan for the brand, and they bought into it,” he says. “That’s our future, so we kind of have a partnership. I didn’t just sell them the name, and now we’re out of the picture. We’re in charge of building a worldwide organization, and now we have the funding to do it.”

He compares the change in ownership to the way other large action-sports brands have managed growth. “In the past there have been some amazing companies in our business that have gone public to raise capital to do this,” he says. “There’s a next tier of distribution that we want to avoid, and we think this allows us the opportunity to do something unique in America. I decided not to use just our resources to expand globally because I thought it would take our ability to put value into our product to a lower level.”

Although the company is now a wholly owned subsidiary of Nike, Bob Hurley says it isn’t a division of the parent company, and the Hurley International staff will have administrative freedom to grow the company as they see fit-without interference from Nike headquarters: “They want to help us set up our international distribution the way we want it, and along the way we’ll be able to use some of their sourcing facilities. They have tremendous buying power, and hopefully that will help us add more value to our product. To me, it’s all about product design and innovation. We think they can help us with that-they’re an amazing company in design and innovation, and understanding a brand.”

Hurley International’s expansion plan includes opening up overseas markets while preserving the careful domestic distribution structure it’s built over the past three years. While Hurley apparel is available in outlets as disparate as ‘core boardshops and some Nordstrom department stores, Bob Hurley says every outlet is deliberate, and the company will focus its growth abroad while maintaining its current distribution at home. “We want to keep the U.S. distribution super clean, even more than some of our competitors, and get our dollar volume (growth) from other countries,” he says. “Ideally, the U.S. will be a cornerstone for the brand globally.”

Hurley International’s Nike connection raises obvious concerns for skate-shoe companies like éS and Etnies that sponsor Hurley teamriders. While future expansion may also include new product lines, Bob Hurley says those won’t include athlete-driven footwear and insists that Nike isn’t going to use Hurley International as leverage to build its skate-shoe team: “We don’t believe in that formula-one kind of sponsorship for our company. It’s not what our brand’s about-it’s inclusive, not exclusive. We want all of our friends (in the industry) to do well.”

So what changes will Hurley International’s retailers and end consumers see in the coming seasons? Virtually none. “Same distribution, same reps, no (overt) Nike affiliation whatsoever,” insists Bob Hurley. “The only way kids will know about it is if people are saying negative things to try and make an issue out of it. Some of our competitors have tried to do that already, unfortunately. But the consumer is only going to ssee a better product.”

Bob Hurley began as a surfboard shaper and retailer, and became an apparel mogul through a fifteen-year licensing deal with Billabong. His grassroots evolution into the action-sports apparel business seems a stark contrast to the country-club persona of mainstream corporate executives, but Bob Hurley says he and Nike management not only share a vision for Hurley International, but they have a few other things in common: “(Nike Founder) Phil Knight is a performance-oriented guy, and my background is in surfboards, which are performance-oriented as well. There’s some commonality there. He used to be a licensee for Asics, and I was a licensee, so there are some synergies. I think they understand what we’re into.”