The “Ahaa!” moment at the ASR show came early for me. I’djust flown in from the SIA winter-sports show in Vegas and literallywalked in the door at ASR when I heard that the ubiquitous ASRBoard-Trac seminar had already started. I was fifteen minutes late.When I walked in, they were questioning ten “typical” teenagersabout their buying habits and perceptions. I think it was five surfersand five skateboarders. Three or four were teamriders. It was clearthat being teamriders skewed their points of view a bit. Nothing likegetting free stuff to change your buying habits.
I listened for maybe 30 minutes. Then I had to turn toTransWorld SURF Biz Managing Editor Sean O’Brien andwhisper, “Hey Sean, is this supposed to be just aboutskateboarding?”
Congratulations To Us
Skate was clearly the driver of the discussion. Surfing seemedlargely a sport. Skating is somehow more. Skateboarding has, Iguess, become something of an arbiter of style and fashion for a lotof kids.
That sounds kind of high and mighty. I wrote it pretty muchfrom the gut, and now that I think about it, it bothers me that I evenhad the thought. The consensus is that we’ve dodged the recessionbullet with no more than a minor flesh wound (assuming you believeit is a recession without a significant drop in consumer spending andthat we’re in recovery mode. Can consumers start to spend morewhen they didn’t spend much less?).
We are skateboarding and we are immortal. Unless they cut offour head maybe? Or close all the skateparks in California. Check outthe box on this page and do something.
What an enviable market position. What did we do to deserveit, and how do we keep it-at least for a while?
Skate Is Not Snow Or Surf
Okay, you knew that. Perhaps I should be more specific. Insnow, the top five to seven companies control maybe 85 percent ofhardgoods sales. Maybe more. Burton is first, followed-notnecessarily in order-by K2, GenX, Rossignol, and Salomon. Yes, I’mpretty damn sure GenX is either number two or number three bynumber of snowboards sold.
None of these companies, including Burton with its Gravis shoebrand, is 100-percent dependent on snowboarding for its revenues.None of these companies is under 100-million dollars, and Salomon-adidas is over five-billion. They sell a significant amount of productto people who don’t participate in snowboarding. They want to growand are widening their distribution to do it. You can generally findtheir snowboard products in some places where you would havebeen surprised to find them a few years ago.
You need a mountain to snowboard (or at least a big hill).Buying all the gear you need to participate is pretty expensive (lessthan is use to be), and the expensive stuff is mostly special-purpose.You don’t wear your snowboard boots to walk around-when you’renot at the mountain, that is. You can’t do it all year around (unlessyou have a really big travel budget), and you are weather dependent.
For surfing you need an ocean. Or maybe, someday, a wavemachine that generates high-quality waves in an indoor facility. Let’shope Surf Parks LLC pulls it off. You’re weather restricted (weathermakes waves, as I understand it). Buying what you need newprobably will set you back six- to eight-hundred dollars for a board,wetsuit, and bathing suit, plus some accessories. Except for thebathing suit, it’s pretty much special-purpose stuff.
It seems to me that the biggest surf companies are largelysoftgoods makers. Quiksilver had revenues of 615-million dollarsover its last four quarters. Vans did 353-million (I don’t know if Icall Vans a surf company or not. I wonder if that’s a problem or anopportunity for them?). Surf-softgoods brands are interested inpushing their distribution, as well. Look, if you’re going to grow, youhave to expand distribution. Once you get to a certain size, you justcan’t get meaningful increases through the specialty-distributionchannels.
Meanwhile, over in our part of the world, we’ve got a handfulof large, multi-brand skateboard companies with a primary focus onhardgoods and skateboarding in general. They sell some softgoods,sometimes under other brands, but it’s not their focus. The majorityof their revenue comes from selling skateboard hardgoods toskaters. They have not, for the most part, expanded theirdistribution outside of specialty shops and smaller chains. Theybelieve, and I think they are right, that it would kill their credibilitywith their core customers.
They aren’t giant companies. I don’t have any numbers, but I’dbe stunned if any of them topped 100-million dollars in skate andskate-related sales. I’ll be surprised if they are over 50-million, andtwenty- to 30-million might be more typical.
Though you can be weather constrained, you can pretty muchskateboard anywhere. And, although decks wear out pretty quicklyif you skate hard with existing skateboard technology, it’s a lotcheaper to buy what you need to skate than to surf or snowboard.
Skate-shoe and softgoods companies, of course, are pushingmadly into the broader distribution channels. Skate shoes are alimited market no matter how big skateboarding gets, compared tocasual shoes. There were 100 footwear companies exhibiting at ASR,compared to around 70 six months ago.
So here we sit in skateboarding with a handful of longtimehardgoods companies, largely run by skaters or former skaters, thatare focused-in their own best interest-on hardgoods, riders,skateboarding’s vibe, and helping skateboarding progress. They arestill their customers, in many ways. They are still proselytizingmissionaries for skateboarding.
That is pretty much a distant memory in snowboarding. Surfhas the same problem, although-in my judgment-not to the sameextent as snow.
Shoe and softgoods companies get to sell to the generalaction-sports, lifestyle market. Skateboard-hardgoods companieshave to sell to skateboarders. I suspect it’s with some interest, if notenvy, that the hardgoods suppliers watch the shoe and clothingcompanies grow and diversify while they stay focused on a marketthat is nearly all young males.
We better hope the hardgoods companies keep doing whatthey are doing. It is, I think, skateboarding’s unique competitiveadvantage over the other activities. ASR wasn’t able to give me thefinal show numbers before my deadline. I felt traffic was down,things were generally a little quieter, and the show was smaller.Company managers were talking about tighter budgets and “meetingreduced expectations.”
Given a recession, September eleventh, overlap with othershows, and a Super Bowl weekend, maybe that was inevitable. Whattroubled me more than that was my perception that the horde ofnew, little companies that usually come and go at ASR like the tide,weren’t anywhere to be seen. Okay, it’s probably a lousy time to bestarting a business. But the presence of those companies is, to me, abarometer of just how exciting things are in skateboarding. When Idon’t see them, I worry.
I worry that the hardgoods companies that are the foundationof the industry will succumb to go big into clothing or shoes, orexpand their distribution too much. I’m not quite sure that’spossible, given the start and the resources and the market positionsthat the shoe and softgoods companies now have. But it must betempting.
It’s nice to be a big company, I suppose, but it’s maybe evennicer to have a rock-solid market niche that consistently earnsmoney, keeps you close to your customer, and is a likely survivor inthe event of a downturn. I hope the skateboard companies look at itthat way. It would be good for all of us.
Jeff Harbaugh is a consultant with twenty years of experiencehelping smaller middle-market companies make good competitivechoices and realistic financial decisions. The last eleven have been inaction sports. Reach him at: (206) 23
2-3138, or firstname.lastname@example.org.
The law that releases California skateparks from liabilityexpires December 31, 2002. Word is that it will be left to eachmunicipal skatepark manager to decide what to do, and without thisliability protection a bunch seem to be saying they will close theirparks. That would be a bad thing.
So, if you don’t want to risk having skateparks in Californiaclosed, you have to give California State Senator Bill Morrow, whospearheaded the original legislation, the leverage he needs to get thenew law, SB 994, passed. You should tell him you appreciate what AB1296 (the expiring law) has done by providing safe skateboardingvenues for young and beginning skateboarders, and that yousupport SB 994, the new law.
You can do this at the following Web site:republican.sen.ca.gov/web/38/feed.asp
Or you can write Senator Morrow at any or all of the threefollowing addresses. Send a copy of your letter to each address formaximum impact.
2755 Jefferson Street, #10Carlsbad, CA 92008
State Capital Room 4048Sacramento, CA 95814
27126 Avenue Paseo Espapa #1621San Juan Capistrano, CA 92675
This is important. Do it. Even if you don’t live in California butespecially if you do.