By Jim Kempton
What’s the biggest trend in the European surf market?
“All the girls go to the beach naked here!” laughs Reef Chairman Fernando Aguerre, who is visiting his new distributors in Europe as this article is being written. “If that were to happen in the U.S., maybe we would sell a few less swimsuits, but everybody would be smiling.”
Topless femme fatales and cafés on cobblestone streets are common visions most surfers have of Europe. Most don’t imagine boardshorts and Hawai’ian shirts — or powerful, world-class surf breaks, either. But the fact is there are amazing waves up and down the continent. And surf fashion, as defined by the top surf companies from California, is big business in Europe.
Glisse Economy, a French research report being completed this year, estimates the total sales of surf-related products to be more than 800-million euros. That’s more than three-quarters of a billion U.S. dollars. According to Petra Holtschneider, the Glisse industry manager for the Basque Country Chamber of Commerce, more than 3,000 people are employed by surf-industry companies just in the southwest region of France. Quiksilver Europe alone plans to do 300-million euros next year. Four major WTC and WQS professional contests are planned (that’s three more than are held in the U.S.), a half-dozen well-read surf publications have growing circulations, and the conservative estimate of the consumer base is more than twenty-million customers.
Clearly, surf is big business in Europe. But so what? The Brits have boards, the Spaniards have sandals, and the Frogs have Sex Wax. Does this really affect a retailer in Ocean City, Sabastian Inlet, Santa Cruz, or San Clemente? The answer, perhaps more than would be imagined, is yes.
“Europe has always been at the center of the fashion world,” says Alan Tiegen, president of the recently formed EuroSIMA. “But it has now become a very important aspect of the surf market as well — especially in the winter/snowboard area.”
According to Tiegen, Quiksilver is the number-one snow-apparel brand in Europe, just ahead of Burton, another U.S. company that leads its niche in action sports.
“Companies are becoming global,” says Paul Naude, a South African expatriate who is now the president of Billabong U.S.A. “They’re going to use worldwide sourcing, advertising, media, and events. And in the case of Europe, they will undoubtedly draw on their design and fashion talent.”
So, like the rest of the world, the surf community may see a pronounced Continental influence on action-sports fashion, particularly within the holiday and snow lines.
But that’s just one way the Europeans could affect American surf retailers. If a rising tide lifts all boats, then what’s happening in Europe directly affects the U.S. retail environment. Afterall, for the past five years, surf companies have seen their business in Europe increase anywhere from fifteen to 50 percent every year. The European surf market has allowed American companies to increase sales without broadening their ‘core distribution channels in the States.
The European market is also a enthusiastic sponsor of professional surfing. “Europe has embraced the competitive scene completely,” says Quiksilver Europe President Harry Hodge. “In every country people follow the results and cheer on their favorite heroes.” Indeed, the European leg of the tour is the largest and most lucrative; the 300,000-dollar purse of the French Quiksilver Pro is the world’s biggest for a surf contest.
Where It Happens
The capital of European action sports is the Basque region of France, the southwestern coastal province bordering Spain. Biarritz, Anglet, and Hossegor have become the Newport Beach/Costa Mesa/Huntington Beach of the Continent, housing nearly 80 percent of the surf companies’ European headquarters. These small cities have all the ideal elements for a surf-company locale: lots of great surf close by, warm water in summer months, a temperate climate similar to Santa Cruz, California, and a large expatriate population who can speak some French and understands the surf culture.
The local government is also very supportive. The city of Biarritz sponsors the Biarritz Surf Trophee, a major invitational event in November. The region even hired Holtschneider in a bid to make this region the “Velcro Valley” of Europe.
France also appears to be the largest consumer market, comprising somewhere between 40 and 50 percent of the sales for most companies. England is probably second with about eighteen percent of the market. Spain is a fast-growing third with fifteen percent. Portugal, Italy, Germany, Scandinavia, and the Netherlands constitute the rest of the marketplace. “Germany and Northern Europe are tough,” says Tiegen. “Italy is very fashion fickle, but has lots of potential.”
The number of surf shops breaks down along similar lines: most are in France and the UK. Although no one will commit to a definitive number, most estimate about 700 stores, with about 200 of those actually considered true ‘core board shops. Of course, if you subtract Pacific Sunwear, Zumiez, Sun Diego, and the other surf chain stores from the U.S. distribution, that number isn’t much smaller than it is in the States.
Who’s Tops Now?
The brands that have entered the European market seem to be established companies able to compete on the strength of their name. The major players are the familiar dirty dozen or so: Quiksilver, O’Neill, Billabong, Rip Curl, Vans, Rusty, Oxbow, Gotcha, Reef, Oakley, and Etnies. Along with successful French brands Kano Beach and Sun Valley, well-known American names like Volcom, Globe, and Ocean Pacific are beginning to establish their image here as serious contenders.
Based in Italy for the last four years, Ocean Pacific recently moved its European headquarters to the Biarritz area. Steve Veytia heads up the office there, and former skate star Danny Meyers is in charge of marketing. Although the sales constitute a very small percentage of Op’s total volume, the opportunity is still unmistakable.
“A brand’s demand in Europe tends to reflect the strength of the label here in the States,” says Op President Dick Baker. “So when we began to get hot again in the U.S., there was renewed interest there, too.”
But not all successful U.S. brands have made the leap to Europe — yet. “Hurley is the wild card,” says Tiegen. “We’re all interested in how they will do. At the moment, they are almost invisible; they have no presence here at all.”
That invisibility may be short-lived. “I’m going to be focusing on Europe in the coming year,” says Seth Ellison, the newly appointed international marketing man at Hurley. Ellison, who manned Quiksilver accessories, then Duke Kahanamoku for the Speedo group, and recently came over from Nike, plans to put Hurley on the European map. Seth headed up the European marketing plan for Nike before being brought over to help pioneer Hurley’s global marketing push.
As for names you haven’t heard of, they are few and far between. “There are no young start-up brands at this point,” says Pierre Gasçogne, whose magazine Surf Sessions is always on the lookout for new advertisers. “It’s too difficult for them here. The big boys own the market, and they won’t let a small emerging brand come in easily.”
This parallels a retail trend, where the bigger brands have started their own brand-exclusive stores that compete with the already somewhat weak existing retail channels. (See sidebar)
“Our European president, François Payot, has developed basically four tiers of distribution,” explains Leigh Tonai, president of Rip Curl U.S.A. “The surf and snow shops, the Jeaneries — similar to our Gaps or denim shops, the sporting-good chains like Go Sport, and the department stores.”
As with most surf brands, Rip Curl’s European numbers
are huge, but Leigh points out, “The ‘core market is so small and the wannabes are so vast, it’s scary. How much long-term strength the market has is hard to know.”
Certainly the lack of a large, well-entrenched ‘core of participants makes the future less predictable. But many of the trends emerging in Europe are surprisingly proactive in addressing this issue. One of the interesting factors in the market now is the effort to create a viable community in order to develop a demand for the whole category of surf products. This has led to the support of a number of brands by their competitors. For example, when Gotcha was struggling with an uncertain future here in the States, Quiksilver bought the European license to prevent the brand from closing its doors on the Continent.
“It would have been bad for the whole surf business to have Gotcha disappear here,” says Kenny Jacob, who now heads Gotcha. “Europe needs more solid brands to create a healthy, growing market.”
Where They Order It
This awareness of building a market by creating a number of strong brand names has also been the impetus for forming EuroSIMA, the continental version of Surf Industry Manufacturers Association. The biggest issue facing the trade organization is — not surprisingly — the trade show.
Glisse Expo, which is the European counterpart to the action-sports shows here, started as a soulful event in Biarritz to great success. It grew meteorically, moved to Paris, then proceeded to get rid of its original industry-savvy owners. It was then purchased by a large corporation and now finds itself in conflict with the local trade organization.
“Glisse Expo is coming back to Biarritz after a few years in Paris,” explains Pierre Gasçogne. “That’s the good news. But the big players are not coming because they think the show date is too late in the season. They want a June/July show. The smaller labels are probably okay with a September date, but the big question is how Glisse Expo will manage without the largest brands.”
According to Tiegen, “The major companies didn’t feel that the trade show was listening to our concerns or making decisions that were in the best interests of the industry, so EuroSIMA withdrew its accreditation of the show.”
What will happen with the trade show remains to be seen, but the hot pace of expansion over the last few years has helped everyone grow. Unfortunately, 2002 has not kept pace. Reverberations from September 11, coupled with really bad weather in June and July, produced the slowest summer in years.
Now at the end of the season, shops say sales are down twenty percent. That doesn’t mean the U.S. surf companies are going to take a hit, though. The European market still has the capacity to expand, and surf culture remains a growing economic factor on the world stage.
“Funny as it sounds, one of the best things for surfing was the demise of windsurfing,” says Hodge. “When the sailboard fad collapsed, everyone saw surfing and the beach culture as an alternative. Europe is rich in waves and has a great romance with the sea. We formed EuroSIMA partly to help foster this, and partly to support the environmental protection of the coasts.”
While some brands feel that the trade organization is doing too little for the companies, others think it just hasn’t had the time to have an effect on the overall business. “One of EuroSIMA’s concerns is the same as the one talked about at Surf Summit 5 in Cabo this year,” says Hodge, “and that’s the problem of outside elements trying to encroach on the ‘core surfing culture. We have to guard against that here as well.”
On this issue Hodge has put his muscle where his mouth is. When a counterfeit non-surf company grabbed the rights to Rusty’s name in France, it put the Rusty subsidiary in serious jeopardy. The bogus company was using the brand to sell products and keeping Rusty out. Quiksilver promptly told all its accounts that any company that did not deal with the legitimate Rusty brand would not get Quik products either. “Surfers have to stick together,” says Hodge. “Rusty Priesendorfer and his company are the real deal, and that’s the type of support EuroSIMA can give to the industry here.”
Despite the this year’s dip in sales, everyone seems to still view Europe as a growth opportunity. They see a continent where the surf industry can capitalize on skate and snow markets as the surf culture continues to expand. “Surfing is new and exciting here,” says Hodge. “You don’t have the cynics and the pessimists. Skateboarding is exploding. Snowboarding is huge and totally connected to surfing. It’s a good mix to be involved in.”