UPDATE: October 30, 2019: On Tuesday, Nike announced plans to sell the Hurley brand to Bluestar Alliance for an undisclosed amount, according to a company press release. The deal is expected to close in December, and follows reports over the summer that Nike was looking into options for the brand. Michael Spillane, president of categories and product at Nike, said in a statement that the change will allow "sharper focus and intentional investment in Hurley's growth potential" as Nike pursues "targeted investment" through its Consumer Direct Offense. Bluestar Alliance bought Brookstone out of bankruptcy last year and its portfolio includes the Bebe brand, Limited Too and others.

Dive Brief:

• Nike is exploring options for its Hurley surfwear brand, including a possible sale of the business, according to a Reuters report. Nike did not immediately respond to Retail Dive's request for comment on the accuracy of the report.

• Hurley was acquired by Nike in 2002 and has 29 stores, including factory and employee stores, according to Nike's latest 10-K. Sales of the Hurley brand are wrapped in with Nike's North America geographic operating segment, which was responsible for $14.9 billion of the sportswear giant's revenues in 2018.

• Founder Bob Hurley stepped down as CEO of the Costa Mesa, California-born business in 2015, after 16 years in the role, and was replaced by current CEO Bob Coombes.

Dive Insight:

Surfwear brands have not been at their most powerful in recent years. Trends in the athletics space have favored athleisure and streetwear, including the likes of Lululemon and Athleta on one side, and Puma and Reebok on the other, as well as stalwarts Nike and Adidas.

Brands focused on skate and surfwear have not fared as well over time. Quicksilver filed for bankruptcy in 2015 and handed over the keys to private equity firm Oaktree Capital Management, which later bought up rival Billabong as well, via its Boardriders subsidiary.

"Today marks the beginning of what will be a turning point for our industry," Dave Tanner, CEO of Boardriders Inc, said in a statement at the time. "With the combination of Boardriders and Billabong, we bring together the best of both companies, creating a dynamic enterprise under the Boardriders umbrella."

But the segment has continued to struggle since, with private equity firm Golden Gate Capital combining PacSun with another of its businesses, Eddie Bauer, in a separate operating company last year a few years after the former filed for bankruptcy in 2016 (with $88 million in debt). Kering, too, sold off its Volcom skate and surf-focused brand in April this year.

For Nike, the potential sale of Hurley could be a reaction to the same industry trends that pushed others in the space to file for bankruptcy, and could indicate that the segment is not showing signs of a return. If successful, a sale could result in Nike shedding dead weight at an otherwise successful business.

"The surf/skate market has been soft," Matt Powell, vice president and senior industry adviser of sports at the NPD Group said in emailed comments to Retail Dive. "Hurley has not been a growth story for some time."

It's unclear how much Nike could sell the surfwear brand for.