Smaller surf companies try to stay on top of the wave.

Tom Morey, a mainstay in the surfboard industry since 1955, has seen dozens of surf and apparel companies swallowed up by larger fish.

Most recently, sandal maker Reef Holdings Corp. of San Diego's Kearny Mesa was acquired by apparel giant VF Corp. One year earlier, Greensboro, N.C.-based VF purchased skateboard-themed apparel maker Vans Inc. of Santa Fe Springs.

As far back as the 1970s, Morey sold the rights to manufacture his Morey Boogie Boards to Kransco Corp. of San Francisco (product rights were later resold to El Segundo-based Mattel Inc.). Morey remains a consultant, but puts most of his time into his Oceanside-based surfboard manufacturing company, Y Surfboards.

He says smaller companies are having a harder time doing business, and the larger ones are always looking for ways to capitalize on the booming market for surf-related gear.

"Small businesses are constantly scrambling to keep up," Morey said. "It has gotten tough to do business in the United States."

The surfing industry generated an estimated $3.4 billion dollars in retail sales last year, a 41 percent increase from 2000, according to Board-Trac, an Orange County-based market research firm.

Closely held Y Surfboards is part of a cluster of North San Diego County surfboard manufacturers, including INT Surfboards, BZ Surfboards and Doyle Surfboards.

The smaller businesses compete against large industry players such as VF Corp. and Quiksilver Inc., which bought the San Diego shoe company DC Shoes last year.

Just last week, Costa Mesa surfwear maker Volcom announced it planned to go public, raising as much as $86.3 million in an initial public offering.

Softboards

Morey's latest innovation, the YPH7 Swizzle, is a surfboard meant to be faster, more comfortable and lighter than others. It is made out of the same foam used in Morey's original Boogie Board.

"This is a big revelation," Morey said.

Softboards, as they are called, have gained for several years, as more mainstream Americans have taken to the waves. Surf schools are big users of the boards, which make it easy and safe for beginners to learn the sport.

"We can't make them fast enough," said Chuck Herpick, vice president of sales and operations for Y Surfboards. "Right now we are selling about 20 a month. By summer we expect to be up to 100 a month."

Eventually, Morey expects his business to manufacture up to 500 softboards a week. But while the Swizzle can be used by beginners, it also was developed to be a high performance board.

"The current softboard is great for training, but it is bulky and heavy," Morey said. "The hardboard (which is traditionally used by surfers) is good for performance but it is very dangerous. We have made a high-performance friendly board. This board tides better than a hardboard."

Morey, 70, became an avid surfer in 1950. He has been developing surfboards and surf apparatus for most of his life.

Established in 1999, Y Surfboards, which has six employees, is primarily a developing company continually looking to expand and better its products, Morey said.

"Every surfboard you make is a prototype," Morey said. "It's all a work in progress."

Y Surfboards is looking to expand its business opportunities and eventually sell the license to a company that would take over the manufacturing process, Morey said.

Reef, a 21-year-old company with 130 employees, will remain based in Kearny Mesa and is expected to contribute about $45 million in sales to VF Corp.'s total. VF owns 19 apparel companies, including Vans, JanSport and the North Face.

Mark Price, vice president of global marketing for Reef, said that working within VF Corp. gives the company several opportunities that weren't previously available.

"It is not going to make a material difference in who we are and who our customers are," Price said. "We wanted to be able to reach our brand destiny and with faster success."

Price added that consolidations in the surf industry have become a component of the business plan.

"It has become a business necessity," he said. "The scale of business done is huge."

All of which makes for tougher competition, said Morey. "As to whether (acquisitions) are good or bad, I can't say."