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Phil Jarratt on Quiksilver's high times and low tides...

 Bob McKnight, Eddie opening ceremony : photo Joli

Industry News 

Book Exerpt: Phil Jarratt documents the rough ride through the corporate jungle for an Aussie surf icon

Surfersvillage Global Surf News, 2 April, 2010 : - - Air France flight AF7638 from Paris Charles de Gaulle banked in a tight arc over the Bay of Biscay, then straightened for its final approach into Biarritz. Bob McKnight lifted his head from The International Herald Tribune and looked out the window at the hundreds of dots beyond the breakers at la Cote des Basques.

As the plane continued its descent, the dots became people, people on surfboards. Big crowd for a weekday, McKnight thought. Good for business. But then, it was the season.

Not ''The Season'', as in Parisian couples in matching Lacoste golf shirts with upturned collars dragging their poodles along the crowded and turd-dotted promenades, but the surf season. Mid-September, normal people back at work, endless days of sunshine and offshore breezes, with strong ocean swells rolling in from the Irish Sea.

McKnight loved the south-west of France, particularly at this time of year. He closed his eyes and recalled images of sunlit waves peeling across the white Hossegor sands … Why then, as the plane's landing wheels engaged with a clunk, did he feel such a sense of dread about this visit?

A driver whisked McKnight and his wife, Annette, through the narrow streets of the old resort town to the Hotel du Palais. Their room looked out over the pool to la Grande Plage, dazzling in the afternoon sun, but after an 18-hour journey, all Bob and Annette were interested in was sleep.

''Shit!'' The phone's ring was louder and shriller than it had any right to be. McKnight sat up, checked his watch and cursed again. Fifteen minutes of quality power nap. ''Yeah, who is it?''

''Bob, it's Greeny. I'm in the bar. We need to talk.''

McKnight scanned the scene in the hotel bar and made straight for a cloud of blue smoke in a far corner. A tanned and bony hand reached out and gripped his. ''Good to see ya, Buzz. Sit down and I'll get you a drink.''

It was 1992 and Quiksilver was in trouble. The dogs were barking at it and the investment analysts were passing on the message. On September 9, just a few days before McKnight flew to France, the company reported a 74 per cent plunge in profits for the third quarter. This was horrible enough, but not exactly a shock.

Both sales and profits had been dropping alarmingly for five straight quarters, while 30 per cent of the company's retail account base had just disappeared. America was in the grip of a recession and at retail counters all over the country, discretionary items such as sportswear were languishing.

But the economic downturn was only the beginning of the problem for Quiksilver.

While most apparel manufacturers' profits were headed south, the Investor's Business Daily reported, ''high-flying Quiksilver Inc's earnings headed to Antarctica''.

''I'm still checking for a pulse,'' quipped Gary Jacobson, an analyst for Kidder, Peabody & Co, who just 18 months earlier had rated the stock a buy with the equally flip endorsement ''Hey dudes, surf's up - looks radical. (That's good)''. The fashion trade's Daily News Record noted: ''Surfwear got really big because of the neon craze, but that was a number of years ago. You can't ride the crest of a wave forever.''

And so the obituaries were stacking up. On top of recession and changing fashions, the past year or so had seen consumer confidence take a major hit from the global tensions surrounding Operation Desert Storm in Iraq, and closer to home the surfwear market had suffered from widespread media reports of syringes on the beach in New Jersey, pollution in California and shark attacks on three coasts.

The beach looked bleak, and in a modern world of gas masks, riots and bomb explosions, young consumers had started to make a statement by embracing the street, or hip-hop culture - the sounds of the ghetto and the look of the op shop.

By 1992 Quiksilver was taking severe blows to most parts of its corporate body. Domestic sales revenue had dropped from a high of $91 million in 1990 to less than $60 million in 1992, assuming that the fourth quarter went to hell in a handcart like everything else … and it did.

But the real problem that McKnight and his company faced was much more deep-rooted and fundamental than the ebb and flow of money. The glue binding Quiksilver USA and its Australian parent company was called a ''sharing agreement'', in which there was meant to be a free flow of ideas, product designs and marketing concepts.

Salts & Suits by Phil Jarratt is published by Hardie Grant, $35rrp.

Read more exerpt at The Sydney Morning Herald

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Source: Sydney Morning Herald

Industry - Surfersvillage


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