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 (as our criteria define the term) because of its exposure to the cyclical apparel industry, its relatively narrow niche focus in the competitive apparel industry, and the fashion risk inherent in its target market. Our ratings also reflect Quiksilver's financial risk profile, which we characterize as "aggressive" based on the company's high debt burden and aggressive financial policies. Although debt levels are lower than in the prior year, following the $140 million debt-for-equity exchange of the company's Rhone Capital term loan in the fourth quarter of 2010, adjusted leverage (including our standard adjustments) remains high, in
