Cooler Than Thou

Jeff Hakman, Mr. Sunset himself, had just flown into Kuta Beach. For Bob McKnight, a 22-year-old surfer bumming around Bali in the summer of 1974, "that was like being told Tiger Woods has just shown up at your local golf course." McKnight and a few friends immediately headed for Poppy's, a local pub, where they heard Hakman would be holding court.

When they got there, Hakman, short and muscular with a large, square head and thick, protruding chin, was at the bamboo bar, sipping a beer. As with many professional athletes, Hakman's confident physicality infused everything he did with a certain swagger. "He was a god," McKnight recalls. "I mean, this was Jeff Hakman, in the flesh."

There were no global rankings for surfers at that time, but Hakman, by consensus, was the world champion. He had won the first Duke Kahanamoku contest in Hawaii, in 1965, and had pioneered many of Oahu's North Shore breaks, including, most famously, Sunset Beach. His fearless surfing put him in the vanguard of short-board revolutionaries who introduced the cutback style that is now considered, basically, surfing.

For McKnight, with his short blond hair and blue eyes, and a nose so prominent it was like a wave gathering to break on his upper lip, Bali was paradise. He had been dreaming about this place his entire senior year at USC--the beaches, the dope, the warongs where you paid 50 cents for a magic mushroom omelette--and now, to top it off, his hero had shown up and was buying him drinks.

McKnight had been, he says, "a spoiled rich kid in college." He drove a Porsche, made surfing films in his spare time and spent as many mornings as he could at the beach. Having gone through his first few years at USC assuming he would work for his father when he graduated, McKnight had been invited home for dinner one Sunday and told that Daylin, the conglomerate that had bought his father's trading company, had gone bankrupt. All the family's money, Dad explained, was invested in now worthless company stock.

The rich surfer kid wasn't rich anymore and would now have to pay his own way to Bali. Already a budding entrepreneur, McKnight raised the money by showing his surf films in high school auditoriums up and down the West Coast, charging a buck a head. And he persuaded Pan Am to flow him a free round-trip ticket to Bali if he could get 10 of his college classmates to book fares. By September, McKnight was in Bali, where every wave seemed better than the one before, the living was ridiculously cheap, and the marijuana was virtually free. The unimaginable bonus was that he was now not only drinking with Mr. Sunset but surfing with him as well.

"I don't know anyone who had less physical ability as a surfer than Bob McKnight," recalls Hakman. "He had to try harder than anyone." Hakman challenged McKnight to surf on some terrifyingly huge days, encouraging the nervous McKnight to turn into the face of the wave. "You gotta trust your rail," Hakman shouted after McKnight wiped out one morning. "You gotta f-----' trust your rail and get in the pocket!"

The goofy-footed McKnight and the wide-stanced Hakman surfed together almost every day that month, and more than a friendship was formed in Bali--an industry colossus was also born. The culture and business of Quiksilver, now the largest surfwear company in the world, was forged by the relationship of these two men--the idolatrous fan and the iconoclastic hero, the future chief executive officer and the future junkie. Together they rode their own endless summer through personal wipeouts to the founding of a billion-dollar corporation.

But already, during that hot month on Kuta Beach, the first symptoms of the sickness that almost tore them--and the company--apart were apparent. One lazy evening, Hakman, renowned in the surfing world as a party animal, tried heroin for the first time. "A friend of my girlfriend had some," he says. "A few other surfers were using it. I started smoking it off tin foil. When I first tried some it was like, Where have you been all my life?"

Quiksilver, the Huntington Beach, Calif.-based apparel maker that sells more than $1.2 billion worth of shorts, jackets, pants and shoes annually, is not only the world's biggest surfwear company, it is also among the largest sports-apparel companies period. Every year, in the Midwest, in Europe, in Russia, in China, millions of new consumers, attracted by the lifestyle it has come to symbolize, discover the brand. The expansion has been so rapid--Quik's revenues were just $444 million five years ago--that industry experts now mention Quiksilver in the same breath as the giants of the sports-industrial complex, Nike and Adidas. The company's growth, including last year's $87 million acquisition of DC Shoes, means that Quiksilver, which already has a juniors line in Roxy, a golf line in Fidra and a baby boomer sportswear line in SilverEdition, is now a head-to-toe rival with that behemoth to their north. "At the level we are at now, Nike becomes a real competitor," says CEO McKnight. "But we also want to emulate them. We admire how they stayed core with runners while also growing."