Riding a wave of popularity

LOS ANGELES (AP) -- The surfer and the skateboarder have become the salvation of two Southern California companies whose target customers are teenagers and young adults.
Pacific Sunwear of California Inc. and Quiksilver Inc. each expect to surpass $1 billion in revenue this year by selling the board-sport mystique around the world.
"It's like buying an identity," Maria Andersen, 24, of Denmark said on a recent visit to the Quiksilver store at The Grove, an upscale shopping district in Los Angeles.
"I like the style -- the whole surfing, snowboarding culture," said Andersen, a snowboarder who is also learning to surf.
The firms are thriving by catering to the narrow and ever-changing tastes of the 12-to-24 age group while larger, more traditional companies such as once-hot American Eagle Outfitters Inc. and Abercrombie & amp; Fitch are struggling.
Exposure
The surf and skateboarding culture has exploded in recent years thanks to television shows such as MTV's "Surf Girls" and "Boarding House: North Shore" on the WB network, and movies such as 2002's "Blue Crush." Board sports have also been a staple for years on ESPN's popular "X-Games" competitions.
"There are a lot of kids out there who have no exposure to surfing in particular and they may rarely go to the beach, if ever, but they feel connected to it because it's on TV and it's on the Internet," said Mitch Kummetz, an analyst with D.A. Davidson & amp; Co., a Denver-based financial services firm.
Pacific Sunwear
Pacific Sunwear operates 678 stores under the PacSun name in the United States and Puerto Rico, in addition to 79 outlet stores. The stores feature shirts, jeans, shoes and accessories from a wide variety of brands, including Quiksilver, Roxy, Billabong and Dickies.
The company also runs 121 d.e.m.o. stores in the United States, selling hip-hop brands such as Phat Farm, Ecko and JLo. Pacific Sunwear said it plans to have 1,400 stores by 2007, including 1,000 PacSun stores.
Quicksilver
Quiksilver primarily manufactures clothes and accessories, but also operates 138 company-owned stores. The stores, which carry a full range of clothing, bathing suits, wet suits and similar products, account for 17 percent of its sales.
The stores of both companies feature bright, colorful displays, often highlighted by surfboards or skateboards autographed by stars of each sport. Their Web sites feature articles and photos of competitions and lifestyle articles along with online stores.
Pacific Sunwear reported a better-than-expected 12.7 percent jump in December sales from stores open at least a year, known as same-store sales. These sales are considered the best measure of a retailer's strength.
In the quarter ended Nov. 1, earnings at Pacific Sunwear increased 54 percent to $24.5 million. Sales jumped 23.3 percent to $281.3 million.
Quiksilver, which doesn't report same-store sales, posted a 37 percent increase in sales to $269.2 million in the quarter ended Oct. 31. Earnings jumped 43 percent to $17.4 million.
Both companies' shares have done very well over the past year, with Pacific Sunwear soaring 74 percent and Quiksilver gaining 26 percent.