Episode 05: Bob McKnight

LIFE ON TOUR

Right off 54th Street in Newport Beach, there’s a strip of sand and ocean known by locals and global surf fans alike as Echo Beach. “In the 1980s, this was the hottest hundred yards,” remembers Bob McKnight, 64. “It was here, between the jetties on 52nd and 56th Street, where the surf industry forever changed.”

Years before this defining moment, back in 1976, McKnight was just a surf obsessed college grad trying to figure out what his next move was. “I’d just graduated from the business school at the University of Southern California and decided to take a trip to Bali to surf and travel before entering the business world. This would become the best decision in my life,” McKnight says with assurance. It’s hard to argue with him, considering on this trip McKnight would met his eventual wife, Annette, and business partner, Jeff Hakman.

Hakman was arguably the best surfer in the world at this time and the two immediately hit it off. What started as a friendship soon turned into discussions about partnering together in a business and Hakman had the idea: board shorts. He had been wearing swim trucks that were made especially for surfing, a rather obscure concept at the time, by an Australian company called Quiksilver. The founder, Alan Green, worked hard to make sure the top riders in the world were wearing his brand of board shorts and Hakman knew there was money to be made.

Together, McKnight and Hakman secured the rights to sell Quiksilver in the United States, founding Quiksilver USA together and they immediately started creating new shorts in a Newport Beach garage. Both surfers would purchase the fabric, cut out the patterns and get them sewn one at a time. McKnight would put the finishing snaps on each pair and then they would drive up and down the Southern California coast selling them out of McKnight’s Volkswagen bus. “We’d give away pairs to the hottest surfers and sell the rest to surf shops and to everyone who wanted to look cool. It just took off from there,” McKnight says proudly.

Fast forward a few years to 1981 and back to the spot where we’re standing with McKnight, his toes dug into the sand. McKnight tells the story that was the turning point of the industry:

“Alan Green was starting to make bright board shorts with checkerboard prints, polka dots, stars, stripes…really radical stuff at the time. He started to just ship them to his Australian accounts without telling them anything. They would open their shipment and they would complain to Greenie. He would tell them “Just put them out, they are going to sell. I guarantee you.” He really gambled the entire company on these designs and it paid off. People went crazy for them. So we started to do the same thing here is California and it was right here, Echo Beach, where these new board shorts sent a message to not only the surf world, but the fashion world. I really believe Quiksilver’s shorts in the early 80s shaped music, art and high fashion for the rest of the decade.”

From there, McKnight guided the Quiksilver USA as CEO to become the top surf brand in the world. By 1990, the brand had signed superstar surfer Kelly Slater and launched its women’s line, Roxy, named after Green and McKnight’s daughters. Along with rival brands Rip Curl and Billabong, the surf culture became mainstream and huge profits were adding up as they all dove into the world of skateboarding, then snowboarding. This success and hunger to continue to grow led to Quiksilver’s acquisition of Rossignol, a huge European ski brand, in 2005. To many, this was the start of Quiksilver’s downfall.

“Rossignol is a great brand,” recalls McKnight. “We wanted to be in the outdoor space and compete with the likes of Patagonia, North Face, and Columbia. We thought this would help us gain a foothold in the ski hardgoods and apparel market.” Immediately after the $560 million purchase was made by Quiksilver, disaster struck. “Europe had the worst snow season in over 50 years,” laments McKnight. “Not a single ski lift was open in Western Europe. Nobody could sell anything, nobody could order anything, nobody could pay their bills. It stuck us in a hole for two years and we just had to end up basically giving it away.” After only three years, Quiksilver sold Rossignol at a nearly $500 million loss.

A very tough market for surf apparel and retail in general, and the rapid shift towards online retailers ultimately led to Quiksilver declaring bankruptcy in 2013. “As a person, this was the most disappointing part of my career. It happened under my watch,” McKnight says. “Yes, we made some bad decisions but I’m really proud that we’ve moved on. We’ve pulled out of this thanks to Oaktree and some great people and advisors. It’s been great therapy and I’m so happy to see the company thriving again.”

Through the ups and downs of Quiksilver, experiencing most of it all from a close distance, is Robbie McKnight, Bob’s youngest child and only son. Like the elder McKnight, Robbie attended USC and quickly entered the apparel industry post-graduation.

“I knew for a long time that I wanted to work with my dad,” says Robbie. “I wasn’t sure if it would be with Quiksilver or another brand, but I knew I wanted to be able to pick his brain, learn from him, and see how he manages his business.”

Robbie, 26, is not afraid to admit that growing up so close to Quiksilver was nothing but normal. “I’d wake up on the weekend and Kelly Slater would be chilling in our house. I traveled all over the world with my dad and Quiksilver athletes to surf and snowboard. I’m lucky but I used every moment of it as a learning experience.”

During college as a Business Administration major, Robbie and his dad would collect potential business ideas in a book. “We had about ten or twelve concepts that we would continuously add notes to,” recalls Robbie. “It would seem to always land on belts being the idea we liked the most.”

The savvy entrepreneur father-and-son team saw an opening in the accessories market to offer cool, fashion-forward belts, similar to the need to provide stylish shorts for surfers over forty years ago. “We knew we had a great idea and by combining my experience with Quiksilver and Robbie’s great business mind and his grasp on the current marketplace and trends, we thought it was a no-brainer,” Bob says with a smile. Robbie quickly jumps in, adding “It wasn’t easy though! I learned quickly that how to start a business isn’t quite what they teach you in school. I’m truly thankful to have had my dad there with me.”

Robbie started Cuater, an accessories brand that has grown to offer not just belts, but hats, socks, underwear and footwear. The two are no longer associated with the brand, but still proudly wear the gear they helped build.

When asked what’s next on the horizon for him, Robbie says he’s working on several new ventures he hopes to launch in the next year or two. “He’s got some really exciting stuff he’s working on,” Bob says proudly. “It’s been a treat to see him develop and run a business, because I was there at his age doing the same thing.”