Volcom Inc.: Life's a beach

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Gidgets and Moondoggies of the world unite: clothing company Volcom Inc. (Nasdaq:VLCM) rode into the active apparel market in the 90s and has been hanging ten ever since, with its stock price recently increasing by 26%.

The company’s line includes t-shirts, fleece, bottoms, tops, jackets, board shorts, denim, outerwear and footwear accessories, but it is more than just a run-of-the-mill clothing company.

Unlike most companies that come about from board rooms full of men in suits, Volcom was conceived by twenty-somethings Richard Woolcott and Tucker Hall on a snowboard trip the two took to Lake Tahoe in March of 1991. With $5,000 borrowed from Woolcott’s father, the two set out to create a clothing company based around their mutual love of three sports: surfing, skateboarding and snowboarding.

Their “youth against establishment” mantra translated to an initially anti-establishment business model. Volcom’s headquarters were first set up in Woolcott’s bedroom in Newport Beach, while sales were run out of Hall’s bedroom in Huntington Beach. Clothing revenues for the first year were $2,600.

Flash forward to 2008 and one can see the “gnarly” wave of growth the company has ridden. Over the years, the company has expanded from not only clothing, but sponsoring athletes, building skateparks, producing films and creating a Volcom record label.

And that paltry $2,600 in sales its very first year? Try $80.6 million today. For the quarter ended March 31, 2008, net income rose to $9.3 million, or $0.38 per share, from $5.5 million, or $0.22 per share in the prior-year quarter. Analysts polled by Thomson Financial expected profits of $0.21 per share. Revenue rose 59% . . .

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