In 1994, they saw a footwear opportunity if they could link up with manufacturers in Korea. They would offer skateboarders the first technically sound skateboard shoe without sacrificing style. “We recognized there was a whole new market,” Block said, who described himself modestly: “I'm great at marketing and design, but a business idiot.” He could balance a skateboard better than a checkbook.
So the partners added a C.F.O. and got serious about financing. The business continued to grow, adding product lines and market reach. Whatever they touched seemed golden. Skateboarders, snowboarders, BMX and motocross riders were snapping up the shoes, along with other apparel. Even fashion-conscious celebrities who had never set foot on a skateboard were joining the rush to be seen in DC Shoes.
To keep pace with growth, it was clear DC Shoes needed more financing, but their bank balked. They thought this was a fly-by-night industry. But a Merrill Lynch Financial Advisor saw it as a business here to stay and introduced Block and Way to people at Merrill Lynch Business Financial Services Inc. (MLBFS). After reviewing their financial picture, MLBFS approved DC Shoes for a working capital line of credit through a Working Capital Management Account® (WCMA® account). Meanwhile, the company's success was attracting notice and inquiries from other companies.
Seeking investment banking expertise
Block and Way heard from corporate suitors over the years but never entertained offers. That changed two years ago when they came close to signing a Letter of Intent with a like-minded firm. When the near-deal fell through, Block and Way realized they needed expertise.
Once again, Merrill Lynch had what they needed. “Merrill Lynch has been very helpful to us,” Block added. Through the Merrill Lynch Private Sales Referral Network, Block and Way were referred to The Sage Group LLC (Los Angeles), an independent investment banking advisory firm.
“Sage brought us a smorgasbord of possibilities,” Block said. In spring of 2004, DC Shoes agreed to be acquired by Quiksilver, Inc., the surfboarding and apparel company, which now allows Block and Way to operate DC Shoes as a wholly owned subsidiary. “There's been minimal change to our workday,” said Block, whose first love is design and marketing. But as a Quiksilver company, DC has greater resources for product development, marketing and global reach. DC Shoes continues to inspire young athletes by showcasing top skateboard professionals, including Damon's brother, Danny Way. Not only is Danny a top technical consultant on shoe design, he holds world records in height and distance on a skateboard. That's big air.
The clients' testimony is their own experience and may not be representative of the experience of others. It is not indicative of future performance or success.
The Merrill Lynch Private Sales Referral Network is a service through which Merrill Lynch clients are referred to independent third party investment banking firms.