Standard&Poor's Ratings Services' ratings on Huntington Beach, Calif.-based Quiksilver Inc. reflect our view that the company has a vulnerable business risk profile because of the its exposure to the cyclical apparel industry, its relatively narrow niche focus, the fashion risk inherent in its target market, and continued restrained retail consumer spending. We characterize Quiksilver's financial risk profile as aggressive based on the company's highly leveraged capital structure and aggressive financial policies. Leverage measures (including our standard adjustments) remain high but have generally improved over the last 12 months, primarily as a result of debt reduction from a $140 million debt-for-equity exchange involving its Rhone Capital term loan in the fourth quarter of the last calendar year. For the
