SIMA’s Changing Role In The Surf Industry (Part One)

The Surf Industry Manufacturers Association has reached one of the most important agreements in its thirteen-year history: a ten-year revenue-sharing partnership with ASR that could significantly affect the course of the entire surf industry. It comes at a critical time, when the very nature of the surf industry is being reappraised, and when SIMA has taken the first steps toward becoming truly relevant and vital to its constituents. Add EuroSIMA’s simultaneous agreement to do a show with ASR, and the repercussions become global.

Big questions emerge: How does this affect the non-SIMA members (primarily the skateboard and shoe companies) who have literally dominated the shows in the last few years? What happens to the balance of power between Surf Expo and ASR? Where will the extra money be spent? How will SIMA and EuroSIMA fit together? Why didn’t SIMA just do its own show like many other trade organizations do?

For some, the biggest question may be, “Who cares?” Well, to a certain degree, we all should. Because whatever you think of SIMA, ASR, or Surf Expo, the fact remains that trade shows have a function that supersedes commerce and politics — they serve as the site of the semi-annual gathering of the tribe. It’s where we get together and see what’s up. There has never been a sport that has imbued as much cultural commonality in modern history as surfing. Surfers relate, in ways no other groups do (outside of religious sects). Surfers like to know what other surfers ride, think, and wear. And they love to talk about all of it ad infinitum. We present ourselves to our culture at these shows, and in doing so, define the business. SIMA is our collective voice — or at least, that’s its intention. So in essence, because SIMA is now a principal partner in the ASR show, the presentation of our lifestyle, as well as the central marketing focus of our industry, is deeply and irrevocably connected to VNU, the parent company of Action Sports Retailer.

It follows, then, that an agreement that spans the next ten years and carries this much power will affect us all.

So What’s It All About?

In a nutshell, ASR and SIMA have formed a partnership where SIMA will receive a portion of the overall profit of ASR’s shows in return for helping to increase industry involvement in the show.

Before SIMA merely received a set amount of cash for exclusively endorsing the show, now it can see its revenues grow as the ASR show grows and receive what is reported to be more than five to eight times as much revenue from ASR as it previously did.

Perhaps more importantly, the two companies seem to have forged a genuine partnership where both sides appear dedicated to building an event that truly helps the industry. And that, if you know anything about the last fifteen years of trade-show wars, is a feat in itself. Those neat rows of trade-show booths, to twist a phrase, have been hard rows to whore.

The rumblings started quite a few years ago when (like in most relationships) the money got tight. ASR became less productive as a “writing show” (where people “write” orders up after seeing the lines) and at the same time increasingly more important in representing the industry and the lifestyle. As the party atmosphere moved from the hotel rooms to the main floor, the relationship between ASR and its surf-industry clients began to fray. Some liked the new, edgier energy, others hated it. Some looked at it as an opportunity to market themselves, others saw it as a waste of time and expense. But like it or not, nobody could afford to risk not being there, which in itself became a cause for resentment among the disenchanted.

The infusion of skate and street brands into the show took the fraying edges and ripped them at the seams. With their raucous, irreverent, thoroughly non-surf approach, skate and street companies made the surf brands feel old and out of it — not to mention totally disrespected by their young upstart competitors.

Skateboarding had always been “sidewalk surfing” to the founders of the surf-apparel brands, an offshoot of the big daddy — surfing. Surfers were a product of the baby boom. They gained control when they were young and lived as if they would be forever in control. It was hard to see their world rocked hard by kids who were not only getting all the buzz (and often making more money than their older surf brothers), but who obviously didn’t give a rat’s ass to honoring the historical version of the lifestyle.

Surf brands, whose owners were mostly raised in the tumultuous 60s, had always considered themselves inmates running the asylum. When an even badder band of mental patients showed up (who didn’t even think surfers were crazy anymore), it was difficult for many of them to cope. There was anger and resentment on both sides of the aisle. A schism formed, and many blamed ASR for what was essentially an unavoidable generation-gap culture clash.

Then there was the problem with show dates. As a larger range of product categories entered the show, conflicting line-break needs sprang up. Shoes needed a different time than apparel, and swimsuits fit neither timetable. Some snowboard brands were hinting that if the show could be moved to January, they would break ranks with skiing and join the action-sports crew, to whom they felt much more culturally akin. Surf companies continuously begged for a back-to-school show, but such a show was of little interest to the other categories.

As ASR dodged and darted around the surf industry’s demand for a fall show, they found themselves in a very difficult spot. To move the show from early February to March meant losing most skate and shoe brands. Without them, a separate show of Long Beach or San Diego dimensions was a poor return on investment. On the other hand, continuing to ignore the surf industry, whose bleating had now reached the Eastern seaboard, was to further alienate an increasingly hostile ‘core customer base and invite competition — which is exactly what happened.

In early 2001, Surf Expo, the surf world’s first trade show, now the eastern equivalent to Action Sports Retailer, loaded its guns and came riding into town. Spurred by a leading surf brand, who had felt spurned by ASR’s refusal to provide a fall show after four years of requests, Surf Expo walked into a SIMA meeting and, without previous warning, announced it was doing a back-to-school show at the Anaheim Convention Center. The dates were booked, the invites were in the mail, fait accompli.

Now it was SIMA that was in a bit of a pickle. While SIMA knew that a great many companies wanted a fall show, they were also contractually bound to not support any West Coast shows except ASR.

While SIMA did the right thing and politely told Surf Expo that it couldn’t endorse the show, SIMA didn’t say it would reject Surf Expo’s BTS show, either. The directors of SIMA needed a fall show as much as the rest of the industry and figured they would let the chips fall where they may.

Of course, the moment word got out, ASR found the wherewithal to put on its own back-to-school show, located in a smaller venue, and at a more soulful and convenient site — Huntington Beach. But the industry was divided about which event to attend. Now there were two fall shows instead of none. They didn’t need the shows nearly as badly as the shows needed them. A battle for the hearts and minds of the surf brands would be waged, and SIMA decided to see which show would still be standing when the dust settled.

Seems Like Old Times

What had emerged was an almost exact replica of the situation SIMA found itself in more than two decades before — only with the players switching roles.

What many people probably don’t know is that the impetus to form SIMA, the exac
t purpose for its existence, was to protect the manufacturers from this very situation.

More than two decades earlier the fledgling surf industry (it didn’t even have a name for itself then) had found how helpless it was against the power and interests of the trade shows themselves. Since many of the leaders in the industry today were still in high school when SIMA was founded, they most likely don’t remember the tremendous upheaval created back in the early 80s by trade-show wars.

In a naked attempt to gain market share, ASR invaded Surf Expo’s backyard — with similar dates and venues — in Florida. The result was mass confusion about which event to attend, which show to support, how to afford both shows, and how not to make an enemy of one by choosing the other. There was tremendous confusion. Up until then, the shows had been very popular and well-received events in the surf world.

The shows at their outset had been a fantastic success, most obviously because they had hit on a true need and were serving it well. At that time there were action-sports companies springing up like mushrooms after a good rain, and there were hundreds — if not thousands — of retail shops hungry for surf products. New brands didn’t know the shops, and retailers didn’t know who or how to contact the companies. Only a handful of the biggest brands even had a sales force, and that was often only for certain parts of the country.

So when the trade shows came along, they were like a giant plug to a huge string of holiday lights wrapped around the Christmas tree. When they plugged in, the lights went on. Everybody could suddenly see everyone else, and the effect was, well, electrifying. Suddenly, small businesses were able to distribute nationwide, small shops were carrying top-name brands, and the surf business was taking off like an F-16.

But the shows served another purpose, which even today is paramount to their success: They provided a forum for the entire surf world to meet and greet one another, which had historically never been possible before. The first shows were like a convening of the clan, and the collective culture became visible even as it was still creating itself.

Ross Houston’s Kissimee, Florida Expo had the down-home Southern hospitality of a family barbecue. Steve Lewis and Jeff Wetmore’s initial ASR events felt like homecoming reunions. It was a heady time, when everybody still related to being fellow surfers trying to make a living from what they loved, rather than competitors bent on market share. And the trade shows were our best friends, like harbormasters guiding our little surf ships into the docks of prosperity.

Now as the trade shows sought similar dates and locations on both sides of the continent, manufacturers were having to choose between two previous friends and allies — as well as grapple with the overload of money and commitments far beyond their affordability. So it was with much frustration that the surf-business community found itself in the midst of a turf war that served no real value to the industry. It was in this crucible that the initial formula for SIMA was stirred.

Like most good ideas, the embryonic development of SIMA came from a combination of need, impetus, vision, ability, and timing. And like most good ideas that come to fruition, it needed time to develop, without the unforgiving glare of public scrutiny or private profit.

When the dueling trade-show dates crashed into their midst, the need presented itself like a pitching lip about to land on the whole industry. It was a sneaker set, and the thinking men in the industry were determined not to get caught inside a second time.

As groups gathered to discuss the crisis, and what might follow, Kelly Woolsley of O’Neill and Mike Gallagher of Gordon & Smith were the first to articulate the idea of a collective industry voice. Why not get in contact with one another and continue to inform one another about the issues? Why not form a body of colleagues that could collectively debate and represent the industry’s needs and requirements?

It was obvious by this point that while the shows wanted to serve their customers, their primary goal was to grow their business. ASR was candid enough to admit as much when responding to the surf industry’s cries of frustration. That was the impetus. Something had to be done to provide surf manufacturers with a voice. Everyone now was talking about the trade-show problem.

Debbie Pezman, the marketing director for Surfer at the time, didn’t just listen, she acted. Through its advertising, Surfer had the names and contacts of the industry leaders. It was easy for her to keep information flowing among the interested companies and also act as a neutral party who was not a competitor in the apparel or board market. Throughout the year, Pezman kept the spark lit by the Florida debacle flickering up and down the coconut wireless. As ideas flew back and forth, a slow deliberate development began to take place, forming the nucleus of the SIMA concept.

It wasn’t long before the vanguard of the surf manufacturers’ community wanted Pezman’s list to make contact themselves. Early in 1989, a group of the most prominent leaders began to form an organization based on the best needs of the industry. They named it the Surf Industry Manufacturers Association.

Bob McKnight, perhaps the only individual universally well-respected and trusted enough to qualify as a unanimous choice, accepted the job as SIMA’s first president. Even then, Quiksilver was the undisputed leader of the free surfing world. McKnight led like a George Washington of the surf industry, ready to do battle for the cause of the greater good.

With McKnight at the helm, SIMA immediately confronted the problem of conflicting show dates and locations, began meeting with the trade-show organizers, and within a relatively short period of time, resolved the issue to the satisfaction of all parties involved. Surf Expo would continue as the undisputed power on the East Coast. ASR would remain on the West Coast. The Mississippi River would be the dividing line, the 38th parallel, the Berlin Wall.

Bob McKnight’s role as the first admiral of this waterman’s guild cannot be underestimated. Through his effort, the monumental task of getting the organization off the ground was accomplished. And the “Treaty of Miami” was made. Without his ability to bring all the parties into a cohesive coalition, SIMA might have floundered, or perhaps never even come to be.

McKnight was followed by Michael Tomson, a larger-than-life personality and a political strategist of Jeffersonian proportions. Tomson would, like McKnight, bring a particular set of unique qualities to the leadership role.

Although the peace treaty that had been negotiated was somewhat like the Eastern/Western European bloc after WWII, the arrangement allowed the engines of commerce to hum with a minimum of grind. The problem was it still left SIMA with no financial stability. Tomson’s gift was the ability to see the opportunity SIMA had and turn it into a reality.

Once formulated, Tomson could quickly calculate that SIMA’s power exceeded the sum of its parts. His crucial contribution was to negotiate an endorsement fee for SIMA in exchange for a continued exclusive endorsement of the two show organizations. In one fell swoop, SIMA had money, power, and the beginnings of prestige.

Tomson and McKnight were the titans of their era and their work will remain a legacy. But fortunately for the action-sports community, there were enough other founding fathers to create a decade worth of leadership. With the organizational structure and income-stream issues firmly in hand, the next two presidents, Tom Holbrook of Quiksilver and Tom Knapp of Club Sportswear, steered the ship through the initial years of development. They were responsible for the immense success of the Waterm
an’s Ball, a surf-industry gala that’s raised more than 1.5-million dollars for environmental purposes. By the mid 1990s, it had become SIMA’s main effort and (to its credit) the social event of the season.

Freestyle President Jimmy Olmes followed the Toms, contributing among other things, a market-research effort that gave legitimacy to the organization’s role as the representative to the outside world.

The next president, Ocean Pacific’s Bonnie Crail took a suggestion from Reef’s Fernando Aguerre to heart and spearheaded the first SIMA industry conference, getting members of the organization together to formally discuss issues the whole industry faces. In 1998, SIMA instituted the Surf Summit, an action-sports conference held annually in Cabo San Lucas. It has proven to be one of the most useful and at the same time enjoyable events in the industry.

Peter “PT” Townend, who was the VP of marketing at Rusty when he took the president’s office, connected SIMA with Surfing America and renegotiating the agreements with the trade shows. By the time PT had finished his term, storm clouds were once again forming on the trade-show horizon. Fractures in the alliance — while not made by any one SIMA administration — were now beginning to fissure.

It was into this caldron that Ocean Pacific’s Dick Baker threw himself at the turn of the millennium. Baker saw that the organization was facing future problems — and not for lack of good people or honest effort.

One of the difficulties for SIMA was that it was born more out of reaction to the existing situation than to a broad, multipurpose vision of what it wanted to be. What did it want to be? After more than fifteen years, was the answer completely clear? Did it want its own trade show? Were the endorsement contracts with ASR and Surf Expo a viable, long-term financial solution?

In spite of the accomplishments of past presidents, SIMA wasn’t a fully formed trade organization. It lacked a full community of dues-paying members, a professionally experienced staff, and a clear set of business objectives. In some corners it was merely viewed as an incestuous ol’-boys club that liked to get together and pat each other on the back. Interesting perhaps, but certainly not central to the business at hand.

To really be a legitimate and relevant institution, Baker knew SIMA needed professional help. But who could take this fledgling trade association and give it the direction and goals it needed to be relevant — and just exactly what would those goals be?

In part two, appearing in the next Issue of

TransWorld SURF Business, Kempton discusses the arrival of Terry McCann, where our trade association is heading, the affect the new SIMA/ASR partnership has on Surf Expo and the skate industry, and how SIMA plans increase its relevancy to the entire action-sports market.