How Will Imported Surfboards Change The Surf Market?

Aiming to be the “catalyst for positive change” within the surfboard manufacturing community, Global Surf Industries is the newest entry into the imported-surfboard sweepstakes taking place in the U.S. The company will offer three new surfboard lines marketed for entry-level to intermediate surfers and enters the market with a powerful ally in its corner: Thailand-based Cobra International Co. Ltd., the world’s largest manufacturer of windsurfing boards and an emerging player in surfboard production.

Global Surf Industries was founded in July 2002 by Australians Mark Kelly and Lachlan Kekwick, both formerly of Surf Hardware — the parent company of FCS — where Kekwick served as CEO and Kelly was global marketing and sales manager. Cobra got wind of GSI and became a shareholder by the end of August 2002. GSI agreed to work exclusively on the marketing, sales, and distribution of standard polyester and thermoformed surfboards manufactured at Cobra’s Thailand facility, which is equipped to produce up to 300 surfboards per day.

GSI’s current catalog includes the “Seven” line, eight predetermined shortboard shapes ranging from 5’8″ to 6’8″; the “Blue” line, eleven mini-longboard, egg, and hybrid shapes from 6’6″ to 8’6″; and four longboard shapes under the Modern Longboards label. GSI also markets and distributes the New Surf Project (NSP) and South Point Longboards, which are thermoformed boards similar to Bic windsurfers and a technical cousin to Surftech surfboards.

Each line offers retailers a profit margin of up to 40 percent — significantly higher than margins of U.S.-built surfboards — along with other incentives such as stock service, free or subsidized shipping, and 30-day terms.

“Our goal is to support retailers and help make the hardgoods section of their store profitable and easy to manage,” says Kelly, whose marketing résumé also includes Bausch & Lomb and adidas. “These boards are priced at the lower end of the market to allow the stores to profitably compete with the backyarder and to sit under well-known brands that people are already willing to pay more for.

“No one who walks into a store intending to buy a top-name brand of surfboard is even going to look at one of our brands, as their mind is already made up,” continues Kelly, “but the person who’s just getting into surfing or doesn’t care about the brand of board they ride is potentially a consumer of our products.”

Kelly added that GSI will deal exclusively with ‘core surf shops, rather than big-box warehouse outlets like Costco and Wal-Mart, which began selling Chinese-made surfboards last year.

Despite Kelly’s reassurances, the emergence of low-cost surfboards imported from the Far East is a hot-button topic for domestic surfboard builders — many of whom declined to go on the record with their opinions about this topic.

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Other industries have already moved much of their production to the Far East, including the electronics and apparel industry. Now the snowboard and skateboard industry are under similar pressures to move production to countries like China, where labor costs are a fraction of those in the U.S.

Many in the surf industry remain skeptical that mass-produced boards will ever replace the custom boards created by the close surfer/shaper relationship. “Try to name a sport with anything similar to the custom surfboard and the very personal relationship between the surfer and his board,” says Gordon Clark, owner of Clark Foam, in a company newsletter. Clark Foam supplies the vast majority of foam blanks to domestic shapers. “There are really none! This is something special.” But since many smaller shapers are already finding it hard to squeak out a living making surfboards, it’s likely that imported boards will nevertheless have a big impact on the market.

Bill Bahne, a respected shaper and industry statesman who sits on SIMA’s board of directors, conceded that the emergence ofow-cost surfboards built overseas is an inevitable consequence of today’s global economics. Bahne says domestic manufacturers must answer the challenge by maintaining their high-quality production standards and improving their marketing strategies or fall by the wayside. “We can’t just put up a gate and say, ‘You can’t come in with your product,'” says Bahne. “That isn’t for the betterment of surfing as a whole. But there’s an evolutionary thing happening, and we’ll see a certain amount of manufacturers going out of business because it’s not profitable — especially with the new competition.”

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In a 2002 company newsletter, Clark says the construction of foam-fiberglass boards in countries with very low labor and other costs is nothing new. “The first big market was Japan’s department stores,” he writes, “followed by a few surf shops on our East Coast. Conventional sporting-goods stores worldwide were the next customers. The boards keep getting better and cheaper. Several times the very efficient large discount chain stores have tried to market these boards. This is interesting, for they retail them at a price that would make any retail surf-shop owner shudder with fear! When Costco first tried to market these boards, they were horrible. Costco is marketing them again, and they’re a lot better.

“We can debate the effects of these boards on the American surfboard manufacturing industry forever,” Clark continues, “but anyone who thinks retail surf shops will sell many of these boards if they’re offered at the local Costco or Wal-Mart is nuts.”

Lost Co-Owner Matt Biolos is passionate about the topic of overseas production. “When you take surfboard manufacturing out of the true surfboard factory, you’re taking work out of the hands of surfers — skilled craftsmen who were born and raised surfing,” he says. “For every surfboard {made overseas}, you’re taking well over a 100 dollars in labor out of the hands of those people. So if they’re {overseas companies} bragging about doing 50,000 boards a year, just multiply that by 100 dollars and that will be the money taken out of American hands.”

In addition to this monetary loss, Biolos says overseas production saps the lifeblood from the surf industry: “If it all plays out, and surfboards become like any other sporting-goods product made in China, you’ll be depleting the talent pool of the {surf} clothing industry. There will be no more Bob Hurleys or Shawn Stüssys. There will be no more Rustys, Gordon Merchants, lesser-known designers like Jim Zapala, retailers like Dave Hollander, or even assholes like me. All of us got our start as shapers.”

It’s clear surf retailers are walking the tightrope between improving profit margins while not putting their longtime custom-surfboard vendors out of business.

“Our goal isn’t to replace our upper market, it’s to gain that next level of youth between eight and fifteen years old and also the female market,” says Roy Turner of Surf City in North Carolina, who received his first shipment of boards from GSI in February. “I’d much rather see it be us than a Target or Costco or Wal-Mart — and that’s where the concern has been. Global coming to me has not affected my relationships with U.S. manufacturers. They’re bringing us another pricepoint, which brings us a new customer.”

Ventura Surf Shop Managing Partner William “Blinky” Hubina says his allegiance to longtime board-building friends and associates didn’t prevent him from carrying GSI’s thermoformed NSP line. In fact, during a two-week span in February, one-third of all boards sold out of his shop were NSPs. “We’re an old-time surf shop,” he says, “and we try to promote Ventura surfers and shapers. We probably have ten or twelve shapers here, and we really want them to make a living at it. I shape, too, but as a retailer I have to make a living, and you can’t pass up something with a better markup. I think people will always buy custom-shaped boards — thank god — but the more durable boards have their place.”

The potential threat of imported boards is a long overdue wake-up call for manufacturers mired in old technology and marketing techniques, says Mark Tolan, whose AST company focuses on improved surfboard resins. “While it may be impossible for domestic board builders to lower their prices, they can compete on the levels of value, innovation, and marketing,” he says. “Shapers, glassers, and retailers need to get on the same page and focus on building and selling the best product possible. The public will notice this change and embrace it, which will regain any lost market share, if not increase it. Even though the industry is on the run, it can still catch up and win this thing. The last thing anyone wants is for the local surf shop to be replaced by Target or Costco.”

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What do you think? E-mail sean@twsnet.com and let your thoughts be heard.ards — thank god — but the more durable boards have their place.”

The potential threat of imported boards is a long overdue wake-up call for manufacturers mired in old technology and marketing techniques, says Mark Tolan, whose AST company focuses on improved surfboard resins. “While it may be impossible for domestic board builders to lower their prices, they can compete on the levels of value, innovation, and marketing,” he says. “Shapers, glassers, and retailers need to get on the same page and focus on building and selling the best product possible. The public will notice this change and embrace it, which will regain any lost market share, if not increase it. Even though the industry is on the run, it can still catch up and win this thing. The last thing anyone wants is for the local surf shop to be replaced by Target or Costco.”

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What do you think? E-mail sean@twsnet.com and let your thoughts be heard.