Chubbies, SF clothing startup, moving to Austin

SAN FRANCISCO (KTVU) - Chubbies, one of San Francisco's hippest clothing start-ups, is calling it quits in the Bay and moving on to the Lone-Star state.

In an e-mail the company said, "The sun is setting on SF." It will close its hip Union Street boutique that features retro short shorts, shirts and other hip and trendy merchandise. It will also move its 40 or so employees to a rapidly-growing tech hub, Austin, Texas. 

Though the company would not grant an interview, we spoke with experts about the "why and wherefore" of the firm's action.

Caroline Winnett, herself a serial entrepreneur, is director of UC Berkeley's super successful public/private start up incubator and accelerator, SkyDeck.

"A start up is gonna go where their customers are and where the talent is that they can build their business with," said Winnett.

Since Chubbies operates web merchandising and far flung stores across the nation, they can headquarter anyplace and Austin fills the bill for their future needs.

"How did this develop as a culture that's friendly to startup? Because of the research university there that's drawing talent from around the world, that has scientists and engineers and people studying business," said Winnett.

"Educated workforce, cultural life, understanding the tech world and understanding of young, new businesses," said former Golden Gate University Business School DeanTerry Connelly.

The other major pluses: a lot of space for businesses and short work commutes. And for a decidedly younger workforce, saddled with both school debt and the enormous Bay Area cost of living, Austin offers home prices that are small fraction of prices here.

"The salary base, particularly for start-ups is sometimes not gonna be enough to quality for a loan today. You gotta look and communities and opportunities in places like Austin," said Dean Connelly.

Winnett said even though the overwhelming majority of start-up talent and financing is and will remain in the Bay Area, other places, including Austin, offer what start-ups need as they mature.  

"Once they've grown that company to a point where they can transplant it somewhere else, that can work too," said Winnett who also said that more start-ups flock to the Bay Area than ever leave.