Lost Enterprises announced the signing of a fifteen-year clothing licensing agreement with Irvine, California-based La Jolla Sports, the highly successful licensee of O’Neill clothing.
For Lost, the deal is the next step in elevating the surf label to a global surf power. “Our business has increased 300 percent, yet we didn’t have the infrastructure,” says Lost Co-owner and CEO Joel Cooper. “This deal gives us the ability to compete.”
For La Jolla Sports, bringing on Lost gives the company an added dimension, one that complements¿not competes¿with its bread-and-butter O’Neill business. “This deal enables us to break into other segments without cannibalizing existing markets,” says John Warner, president and CEO of La Jolla Sports and Dysfunctional Clothing, the new company formed to handle the Lost license. “Lost caters to a younger and edgier market, while O’Neill is more of a traditional surf brand.”
The new alliance will support Lost in the areas of production, warehousing, finance, and customer service. The Lost creative team, which includes Cofounders Mike Reola and Matt Biolos, will continue to design the line, as well as handle the marketing of the brand both domestically and internationally. Lost Enterprises will maintain control over its international licensing, surfboard, and video divisions.
Cooper believes the deal will allow Lost to realize its growth potential and also improve deliveries and service to its growing network of retailers, which has topped 300 nationwide. “This will provide us with the infrastructure to compete head-to-head with the Volcoms and Hurleys of the surfwear world,” says Cooper, who helped launch Gotcha and turned it into a worldwide brand.
But just how big does Lost want to become? “Big enough to remain cool,” Cooper states frankly. According to Cooper, that means becoming a 30-million-dollar company domestically¿but not any bigger because doing so would compromise distribution and, ultimately, the brand’s image.
Currently, sales for Lost are about eight-million dollars, with surfboards accounting for fifteen- to twenty-percent of that number. In order to reach the 30-million-dollar benchmark, Cooper says Lost will sell to Pac Sun, which is the biggest account the company will hold. “Any surfwear company that wants to be big needs to sell to Pac Sun,” he adds.
The Lost look will remain the same¿the line will be just better and more extensive, says Cooper: “Our strength today is T-shirts, walk-shorts, and trunks. Our goal is to expand what we do well and make it better. Instead of offering our customers three pairs of shorts, we’ll offer them twelve.”
Biolos will act as creative director while also continuing to focus attention on shaping. Reola will head the marketing department, which includes managing the surf team and developing new video projects. Cooper will focus on brand management, the growth of domestic sales, and building the brand internationally.
“I’ve been in love with the Lost logo ever since I first saw it,” says Warner, former chief executive of Quiksilver. “The timing for this deal was perfect. The planets all lined up.”