Owners Confirm They Are Seeking a Buyer for OP Surf Wear

Ocean Pacific, the nation’s leading surf-wear maker, has quietly been put up for sale, a company official confirmed Tuesday.

Tustin-based Ocean Pacific Sunwear Ltd. has hired Goldman Sachs & Co. in Los Angeles to find a potential buyer, according to Jim Jenks, OP’s co-founder and vice president who holds about 27% of the privately owned company’s stock.

Jenks declined to disclose the selling price but indicated that industry estimates of $90 million are too high. The company has annual revenues of about $250 million, he said.

The move to sell the firm follows the death last year of Lawrence D. Ornitz, then OP’s president and chief executive, who owned slightly more than 30% of the firm’s stock. Ornitz’s wife, Elaine, no longer wants to be involved in the business.

A third owner, Robert Driver--who owns roughly 26% of the stock--is now 81, Jenks said, and also is interested in divesting his interest.

“So we thought that maybe now is the time to take our marbles and run,” he said.

The decision to sell was made after a recent meeting among the company’s owners, who also include Hobart Alter, the inventor of the Hobie Cat sailboat, and Tom Hilb, a Denver businessman. Driver, OP’s chairman, said the minority owners agreed to cooperate in any sale.

Jenks said he may or may not retain his ownership interest.

“It depends on who comes in,” he said. “I love the company, but if somebody throws a deal in my face that I can’t refuse, I may get on my boat and go back to Australia.”

So far, one potential buyer which has surfaced is American Marketing Works, the Gardena-based firm that markets Body Glove wet suits, surf and beachwear and accessories. The company also is a licensor and licensee for Speedo, Christian Dior and Gold’s Gym.

Marvin Winkler, chairman of American Marketing, conceded that the firm has looked at OP. “But at this point, we’ve decided to concentrate for now on our own surf-wear business,” he said.

A major Japanese bank, which was not identified, also has expressed interest in purchasing OP, industry sources said.

In the $1-billion surf-wear industry, Ocean Pacific has loomed as large as the beach for much of the 17 years since its founding. Jenks, who used to make surfboards, and Chuck Buttner started OP “so we could sell a few trunks and walk shorts, have everything out by noon, then have a couple of beers with our friends,” Jenks said in an interview Tuesday.

For the decade after its founding, OP reigned as the West’s leading clothier of the casual beach set. From a shoestring T-shirt and short manufacturer with sales of less than $50,000 in 1972, OP blossomed into a full-line maker, designer and licenser of recreational sportswear.

Today, OP is primarily a licensing company. The firm has 300 employees and allows manufacturers to put the OP name on everything from sunglasses to sandals.

While most of OP’s mainstay, beach-oriented fashion is made by licensees, it still manufactures about $80 million in menswear itself, including swimwear, woven shirts and some shorts. The goods are made in the United States, as well as in Central America and the Orient.

In the mid-1980s, the company spawned a new, separate line--Newport Blue--with its own insignia and sales staff, to appeal to the older and more lucrative men’s wear market. Newport Blue’s sales this year should reach $30 million to $35 million, Jenks said.

But OP’s success has come at the cost of its popularity at the influential, hard-core surf shops that dot Southern California’s coastline. When the label began expanding into larger retailers and outside California, it gained popularity among the inland masses and became less attractive to hard-core surfers.

Today, OP sells best in the East and Midwest, and its major accounts are at mass merchandisers such as Mervyn’s, the May Co. and Miller’s Outpost.

As a result, OP has been struggling for the past five years to regain popularity among the trendy Southland retailers. In 1987, OP bought Jimmy’Z, a popular clothing maker that this year should have sales of $40 million to $50 million, Jenks said.

Ocean Pacific also introduced Hydrolite, a line of surf wear aimed at professional surfers, as well as K-38, a line of surf wear aimed at the hard-core enthusiasts.