Killer Profits In Velcro Valley

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It's about respecting the stone, about being absolutely core. The stone, according to Volcom president Richard Woolcott, 33, "represents the buzz from a good skate session or riding a 10-ft. wave at pipe. The stone represents the euphoric state of riding."

Core is core, bro, as in hard-core. Right now, in the Orange County, Calif., coastal-wear industry, the Volcom stone--a diamond-shape logo sewn onto shirts, shorts and pants--is totally core, commanding huge respect within the genre of attitude-drenched brands that cool 15-year-olds crave. "Whatever they put the stone on is gonna rock out the door," says Joe Luzzia, owner of Identity Board Shop in Buena Vista, Calif. "You can tell they're the next big thing."

Here in Velcro Valley, as this ragged patch of the industrial landscape is known, a surfwear or skatewear company that catches the attention of style leaders--the best skaters, surfers or snowboarders in any coastal clique--can in a year swell from $5 million in annual sales to $100 million.

But it's hard to stick around in Velcro Valley. Successful firms have erupted from the Orange County youth-apparel industry to become globally recognized brands--among them, Quiksilver, Oakley, Billabong USA and Stussy. Yet just as many such labels--including Gotcha, Lightning Bolt, Vision Street Wear, Jimmy-Z, Maui & Sons, Mossimo and others--rode huge waves of sales only to wipe out in a few years.

The question for hot companies like Volcom, whose stone T shirts currently hold the honor of being the most ripped-off items from Orange County surf shops, is how to make the transition from small, sizzling firm to legitimate, stable business--and still respect the stone.

Orange County, the sprawling expanse of suburban, upper-middle-class communities south of Los Angeles, is the home of the California life-style. "Orange County is to the youth-apparel market what New York is to the fashion world," says Danny Kwok, co-president of Quiksilver. "We are the epicenter of the youth movement."

Over the years, numerous local surfers and skaters have schemed a way to extend the adolescent life-style of cutting school and hitting the beach into a career of cutting work and hitting the beach. "It's a wonderful industry to be in," says Bob Hurley, 43, founder of Billabong USA and Hurley International. "It's kind of like going to high school forever, and then leaving every day to go surfing."

Hundreds of companies marketing clothes and accessories dedicated to the "board-sports" life-style are operating in Velcro Valley. They range from Oakley, the $200 million sunglasses-and-footwear firm housed in a futuristic, $47 million hilltop bunker, to smaller fry like Black Flys, Split and Volcom, crowded into Costa Mesa and Huntington Beach industrial parks.