By Sean O’Brien
At Point Joe, off the coast of Monterey, two ocean currents collide in a single spot, spinning those who get too close off into random directions. Over the last couple of seasons, it seems the boardsports apparel market has paddled into its own Point Joe, where conflicting production schedules and earlier product-line debuts have sent many retailers scrambling to reexamine howâ€"and whenâ€"they order product.
The phenomenon first surfaced in January 2003 when Quiksilver chose to forego showing a summer line at Surf Expo in Orlando, Floridaâ€"traditionally a summer apparel showâ€"and debuted its fall merchandise instead.
The process accelerated this past January when other brands, such as Hurley and Volcom, also moved their fall line break forward. By the time the ASR Back-To-School show rolled around in March, the aisles were abuzz about who wasâ€"and wasn’tâ€"altering their production schedule to the earlier dates.
Ask some brands and you’ll hear myriad reasons why the shift makes senseâ€"and make no mistake, now that they’ve started down this path it’s unlikely these majors will revert to the old schedule. But what’s less clear is how specialty retailers are altering their open-to-buy strategies now that the January/February buy-in period seems split between summer and fall.
Are early brands really gobbling up more open-to-buy dollars? Are shops really going to drop paper for fall goods in January? How did we get into this knot anywayâ€"and who’s going to untie it?
The Industry Grows Up
Part of the need for the switch has nothing to do with specialty retail distribution. “The Quiksilvers, Volcoms, and Hurleys are now on a much larger platform of distributionâ€"one that’s not in conflict with the surf shops,” says Op President Dick Baker, who’s also the president of the Surf Industry Manufacturers Association. “They are now lifestyle brands with a distribution channel in the fashion sector of the business that has a different time frame attached to it.”
In order to attract the business of these larger-platform retailers, brands must pre-line their fall collection in January. “All it is is the surf industry becoming big business,” says Baker.
According to Adam Sharp, Rip Curl’s VP of sales and marketing, it shows how the industry is maturing: “Traditionally the surf industry has been a big tribe, and we probably haven’t been the best in terms of executing compared to the big garmentos. Now the competition is so strong, everyone is looking for an advantage.”
The idea that manufacturers who break their line earlier will capture more orders has been bandied about, with some brands subtly nodding their heads at the idea and others calling bullshit. “It’s actually a fundamental difference of philosophy,” says ASR Trade Show Director Kevin Flanagan. “Some believe in going out early, capturing those dollars early. Others like to design close in and take advantage of a trend that might just be breaking.”
According to O’Neill Sportswear President Kelly Gibson, “I look at it this way. If you’re the eighth or ninth line a particular retailer’s seen, they might say, â€˜Oh, I already have something that’s similar from Hurley or O’Neill’ and they might not buy it. If you’re early enough, they’re going to buy it from you and you’ll be the brand launching those trends into the marketplace.”
O’Neill showed summer at this year’s January trade shows, but Gibson says they’ll be ready to break most of fall by the time those shows roll around again.
Mark Price, Reef’s international marketing director, says his company uses the European line-break calendarâ€"which debuts Fall on January 1. “I’m not convinced specialty retailers will actually place paper in January for fall,” he says. “Maybe some of the giant brands can strong-arm them and get that done. More importantly (by showing the line earlier), everyone will get some visibility into the strengths and weaknesses of their fall line and still be able to make some informed changes to their production plans.”
Indeed, the most-often-cited cause for the line-break switcheroo is so manufacturers can order more accurately.
“The reason we’re moving up the calendar is to deliver a quality product on time,” says Volcom National Sales Manager Tom Ruiz. “It’s all about our production calendar. If we show the line earlier, we can order tighter, minimize our inventory, and minimize the need for a closeout store. It allows us to deliver on time and not make as many mistakes.”
Gibson says the process gives companies some additionalâ€"and criticalâ€"days to plan. “Most of us are importing products, which are 120 days (from order to delivery),” he says. “That means when production orders are due, you don’t have all your (retail) orders yet, so you use the crystal ball. Moving the line break earlier, when the first ship date for fall is May 25, gives you basically 180 days. You’re able to purchase much better.”
But not everyone is convinced that the change solves more problems than it creates. “I wish someone would tell me why we all need to be that early,” says Billabong Executive Vice President Steve Wilson.
Billabong thus far has rebuffed the idea of moving its fall line break into the January time slot. “We’ve looked at it, and quite honestly all that will happen is that we’ll all just play follow my leader,” says Wilson. “Someone will do it and then the reps come back and say that everyone else has their lines and that they need their lines now. So it’s just a case of following each other around like little sheep.”
Wilson says it’s also counterintuitive to what he’s trying to accomplish during the design process. “We’re producing way closer to the deadline of when we send it out to the reps, because it gives us an edge on making sure we have the freshest product,” he says. “You can’t wait on a trend anymore or say that you’ll do it â€˜next season,’ because you’ll be behind the eight ball when everyone else has it.”
By pushing production out, Wilson says it will be more difficult to capture breaking trends and stay on the cusp of giving customers the latest fashions.
For a lot of companies, showing summer in January will be the reality for years to comeâ€"no matter what the majors decide. “We still have a big chunk of smaller to midsized companies that don’t have their lines ready and won’t be able to get ready for that time period,” says Flanagan.
Altering the timing of line breaks isn’t easy for even the most powerful brands. Just ask Gibson at O’Neill. “It adds a lot of stress to the merchandising department,” he says. “It’s been stressful for about eighteen months, because it’s not a thing that you can do overnight. I heard one of our competitors basically skipped a season. We didn’t take that approach. We’re just shaving two weeks off here and a month there. We’re running about a month ahead of schedule versus 2003, and by 2005 we plan on being four weeks earlier than that. It means that there’s no downtime at this point for the production department at all.”
But What Do The Retailers Think?
Earlier line breaks may help manufacturers build smarter and ship on time and complete, but the process has made buying each season more complicated, say many retailers.
Flanagan, whose job it is to make sure retailers and manufacturers are in synch, has had lots of opportunities to talk over the issue with store owners. “The resounding comment was, â€˜We want everyone on the same page,'” he says. “We want to walk into an environment where we know what we’re looking at and not have to wear all these different hats.”
Even the most seasoned retailers were caught off guard by the season change. “At the last Surf Expo I was planning to buy summer,” says Tom Brown, president of Seventeenth Street Surf Shop, which has nine shops along the East Coast, “and people were showing us back-to-school. We were like, â€˜Jeez, we just planned out all our summer buys and you want us to go to a separate room to do back-to-school? This is crazy.'”
Retailers also say companies should think again if they hope to get larger orders by being the first out of the gate with new product. “The earlier the line, the less dollars will flow,” says Dave Hollander, owner of the five Becker Surf shops in California. “I need to see all the lines and correlate my open-to-buy within a season in a small time frame. If someone pushes early, I probably won’t do my open-to-buy grid for that season and just book them from the seat of my pants on a very conservative level. I like to focus on a season and really concentrate on my buy, and if someone is really earlyâ€"or really lateâ€"they just don’t have my attention.”
Encinitas, California-based K-Five Boarding Company Owner Jurgen Schulz says he doesn’t have an answer to the industry’s current confusion, but says it’s affecting his buy: “It’s really hard for the small retailer with how scattered it is. It really doesn’t matter when (the season break is), as long as it’s all together. We do hold back orders because we don’t know what the next line is like.”
Specialty stores want to be part of the discussion, but according to Central Coast Surfboards Owner Steve Carlson, not enough communication has occurred about the growth expectations companies have for their specialty retailers.
“You just want to show us earlier in hopes that we’ll throw the money on the table and that might help your growth,” he says. “If we actually sat down and talked about it, if we could align trade-show calendars betterâ€"if we could do somethingâ€"it would help everybody and you’d see growth within the specialty retail market.”
Most agree the industry is in a period of transition that will eventually sort itself out. In the meantime, Sun Diego Owner Dave Nash says he currently buys spring, summer, fall, and snow all within a six-week window. He’s not too happy about it, either: “In my opinion, the ideal buying situation would be to buy for the season we just finished. For example, buy holiday in January. Maybe that’s where we’re headed and Quiksilver is just leading the way. I sure wish we would just get there and get it over with.”