July 25, 2019 / 8:06 AM / a month ago

Exclusive: Nike explores sale of surfwear brand Hurley - sources

FILE PHOTO: The Nike swoosh logo is pictured on a store in New York City, New York, U.S., September 4, 2018. REUTERS/Carlo Allegri/File Photo

(Reuters) - Nike Inc (NKE.N), the world’s largest sportswear maker, is exploring options for its surfwear brand Hurley International, including its possible divestment, according to people familiar with the matter.

Nike’s potential retrenchment from the surfwear market is emblematic of the stance of most major consumer companies towards the sector. Surf brands have lost their appeal among non-surfing consumers, who now prefer boutique brands and retro streetwear.

Among the options that Nike is considering for Hurley is an outright sale of the Costa Mesa, California-born brand, the sources said, requesting anonymity because the deliberations are confidential.

It is not clear how much Nike could fetch by selling Hurley. Nike declined to comment.

Nike purchased Hurley from founder Bob Hurley in 2002 for an undisclosed sum in an effort to expand beyond athletic-focused apparel and into other sportswear for surfing, skating, and snowboarding.

Bob Hurley founded the company in 1979 and achieved notoriety in the 1970s for shaping the surf board for world champion Wayne “Rabbit” Bartholomew.

In the last few years, the burgeoning appetite for clothing associated with the beach lifestyle and culture waned, to the point that former global leader Quiksilver filed for bankruptcy in 2015 before being taken over by private equity firm Oaktree Capital Management (OAK.N).

Mainstream fashion has dropped surfwear in favor of athleisure, while emerging fashion is turning toward urban streetwear brands like Carlyle-backed Supreme, and throwback looks like the revived sportswear brand Fila and Champion.

Last year, Boardriders Inc, the company behind Quiksilver, Roxy and DC Shoes that is owned by Oaktree, acquired its struggling Australian rival Billabong, owner of its namesake brand along with other lifestyle brands such as Element and VonZipper.

Reporting by Harry Brumpton and Joshua Franklin in New York; Editing by Christopher Cushing

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