Word on the Sand Is Street : Surf Wear Retailers Scramble to Stock New Urban Look : Where beach influence once worked its way to the city, the city is now making its way to the beach.

LAGUNA BEACH —  When Doug Bunting stopped stocking wet suits in his Equipe surf shop, it was viewed by purists as the moral equivalent of banishing hot dogs from a baseball stadium.

Bunting didn’t stop there. He relegated his surfboards to an out-of-the-way corner and refitted his store to downplay its surfing roots. The music wafting through his Laguna Beach emporium was changed from contemporary rock to a more ethnic mix of rap and hip-hop.

“People thought I was crazy,” said Bunting, whose shop has been a South Coast Highway fixture for a decade. Still, the beach retailer said he won’t turn back. Sales have climbed 30% since he reacted to a trend he spotted last year: the carefree, sun-drenched beach look is out; the urban, streetwise, slouchy look is in.

Teen-agers are shunning coastal cool in favor of clothing inspired by the fashions of inner-city gangs. The movement is being shaped in part by MTV music videos, Los Angeles’ underground “rave” parties and the growing popularity of ethnic influences in Southern California.

The change is having profound effects on the estimated $1-billion surf wear industry, which is primarily based in Orange County. Established, large players, such as Gotcha Sportswear Inc. of Irvine and Quiksilver Inc. in Costa Mesa are scrambling to keep up with the new look while maintaining their appeal to the surfers and beach-goers who made their labels popular in the first place.

The fashion movement has spawned a number of newer labels that have left the beach behind. They include Mossimo and Stussy Inc., both in Irvine, Cross Colours in Vernon and Fresh Jive Manufacturing Inc. in Los Angeles.

Some fear the surf wear industry has stumbled.

“I think the whole ‘California lifestyle’ marketplace has lost its direction,” said John Bernards, former president of the Newport Blue division of Ocean Pacific Sunwear Ltd. in Tustin. “It’s splintered.”

Splintered, yes. Dead, no. Industry leader Ocean Pacific filed for protection from creditors last month in U.S. Bankruptcy Court in Santa Ana. But the company blamed a mountain of debt remaining from an ill-fated adventure into manufacturing as the cause, not any endemic weaknesses in the popularity of surf wear.

The street-look phenomenon is the latest evolution in an industry that began humbly enough in the early 1960s by providing surfers with trunks that would not fall off in heavy breakers, nor chaff their thighs when paddling their boards.

The cut and colors became linked with Southern California beaches, as were Beach Boy hits and woody station wagons. Labels like Hang Ten branched out of the surf shops and into department stores. Pretty soon, youths who had never so much as touched a bar of surfboard wax were clothed in surf wear.

But the real explosion did not come until the 1980s, when such companies as Ocean Pacific, Quiksilver and Gotcha each saw their worldwide sales zoom past the $100-million mark. The introduction of neon colors struck a fashion nerve, spreading the popularity of surf wear across all geographical boundaries and age groups.

“It went from active people, to inactive people, to everyone on the street,” said Tom Knapp, president of Club Sportswear in Irvine, a major surf wear producer specializing in volleyball-related apparel.

This popularity proved to be the industry’s undoing. The fashion leaders, boys and young men ages 14 to 25, would not be caught dead sporting the same brand of surf wear worn by an uncle or their high school chemistry teacher.

Said Quiksilver Chairman Bob McKnight: “When you can buy surf (wear) at the airport, you know you are in trouble.”

Kids started looking for new fashion influences, and they found them in the videos on MTV, which increasingly became dominated by rap music. They combined that look with other styles--both practical and whimsical--such as skateboarders’ preference for loose-fitting pants and the colorful, outrageous costumes of the multi-ethnic, underground “rave” parties.

“In the past couple decades, California has been synonymous with the blond-haired surfer,” said Rob Mitchell, chief executive officer of Mossimo Inc. “Now L.A. has shifted from that. . . . Most of the models are going to be olive-skinned, dark-haired individuals.”

Mossimo, which has developed a line that Mitchell describes as a sophisticated street look, is profiting handsomely from the trend. Sales are expected to reach about $35 million this year, a 50% increase over last year, Mitchell said.

For practical reasons, surfers have not embraced the baggy urban look when in the water. But when they climb off their boards, they are right in step.

“Surfers and skateboarders are both wearing the big shorts for street wear,” said Lucy Hamilton, a spokeswoman for Gotcha Sportswear, which plans to market some of the baggiest shorts to ever hit the shelves. But for their in-the-water wear, surfers “take performance over looks every time.” These days, traditionally cut trunks are generally in darker colors and patterns associated with the street.

The Equipe store’s Bunting said he started to notice the street influence when he saw sales of traditional surf wear styles start to slide, and set out to find out why. He said he watched “tons” of MTV and pored over mountains of youth-oriented magazines. “I want to see what kind of shoes the Fresh Prince has on,” he said.

He replaced the wet suits with a shoe collection. He moved the surfboard leashes and other surfing paraphernalia to a less prominent position behind the counter. He brought in more street-oriented labels and allowed his youthful customers to leave their flyers promoting the latest floating, underground party.

For some key suppliers, the changes were too radical, Bunting said. Billabong and World Jungle, two well-known surf wear labels based in Orange County, were so irked about his remodeled store that they refused to keep supplying him, he added.

Other surf wear shops have made similar changes, though. Michael Rayden, president of the 54-store Pacific Sunwear chain of surf wear stores, said he saw the change coming and started adapting his stores two years ago.

Out went surfboards, wet suits, surfboard wax and, in many inland stores, television monitors showing continuous surfing videotapes, which had been a mainstay of the Santa Ana-based chain. In came the funky caps and the more street-oriented apparel lines that are sold right along with more traditional surf-oriented labels.

“We see ourselves as lifestyle stores for young men,” Rayden said. “They don’t come to us for hard-core technical equipment. They come for the apparel and the accessories related to it.”

Where beach influence once worked its way to the city, the city is now making its way to the beach. Skateboarders, in particular, are heavily into the slouchy new duds. Some boarders wear shorts so baggy that the crotch comes to just above the knee--or lower. They appear to waddle when they walk.

“People still make fun of me for wearing clothes like this,” said John Grow, 16, of Laguna Beach as he visited Bunting’s Equipe store one recent afternoon. He was clad in billowing denim pants that rode so low over his hips that his red-striped boxer shorts peeked through at the waist.

His friend, Laguna Beach skateboarder Vishaal Khanna, 15, said he knows what he likes in pants. “Baggy. It doesn’t matter what they say as long as they’re big.” As if to prove his point, he was clad in olive-green fatigues, an extra large gray sweat shirt and a Georgia Tech baseball cap.

The look “all comes from skateboards and gangsters,” explained Tom Drake, promotions manager for the Birdhouse Projects skateboard maker in Huntington Beach, which he said is also branching into a apparel.

While the asphalt cruisers may be the current fashion leaders, the sport of surfing remains as popular as ever.

“Every shaper I talk to is making boards as fast as they can,” said Steve Hawk, editor of the 100,000-circulation Surfer magazine based in San Juan Capistrano.

Hawk, however, predicted that the pull of surfing and other ocean activities will prove too strong, signaling the return of beach-inspired apparel in a few years.

“There is an allure to the sport that doesn’t exist in any other pursuit--it’s tapping into wave energy--and will always have a firm grip on the American psyche,” Hawk said. “It will always be used by advertisers as a symbol of healthy outdoor activity and youthfulness. I don’t think that will ever go away.”