It’s hard to believe the year is over. Taking a look back, it’s even harder to wrap our heads around everything that’s happened in the past twelve months. Here’s a walk through the top ten stories that rocked the action sports industry in 2010.
10. Burton CEO Discusses Layoffs And 2010 Strategy
Burton Snowboards announced February 11, 2010 that it has reduced its global workforce by less than two percent, and reinstated the salaries and merit-based incentives that were cut/ eliminated in March 2009. TransWorld Business tracked down the company's CEO Laurent Potdevin to get the details of this decision and an overall synopsis of Burton's current business. Read Potdevin's take on the announcement and the company's strategy moving forward.
Click through to the next page for the rest of the top stories of 2010.
9. Cotton Prices Reach Record Highs; Brands Forced To Raise Prices
In our December issue, we take a look at why brands are being forced to raise prices as a result of cotton prices reaching an all time high.
Due to flash floods in Pakistan, semi-failed crops in China, and a weakened U.S. dollar, the price of cotton recently reached an all-time high. In fact, in October 2010 the Cotlook A Index—an index created by a private consultancy that
closely monitors global cotton trade fluctuations—averaged $1.27 per pound, an 89% increase from the year prior.
At the consumer level, market analysts around the globe agree that purchasing a surplus of cotton goods before the increases reach retail is a sound decision. "The consumer today, is going to be able to take advantage of the lower prices," explains Marshal Cohen, analyst with the NPD Group. "In a few months, you will see higher prices at retail."
8. Health Care Reform’s Impact On the Inudstry’s Small Businesses
While the full implications of the new health care bill will not be felt until 2014, businesses with 25 employees or less can start reaping the tax breaks immediately with a new tax credit to offset insurance premiums.
Factors that play into how health care reform will impact your business are:
- Businesses with 25 or fewer employees that pay at least half of their staff’s premiums are eligible for significant tax breaks.
- Starting in 2014, businesses with more than 50 employees will be required to either offer health care coverage or pay a penalty of $2,000 a year per full-time worker.
- Businesses with fewer than 50 employees, 96% of the U.S. total, are exempt from this mandate.
- By no later than 2014, states will have to set up Small business Health Options Programs, or “SHOP Exchanges,” where small businesses will be able to pool together to buy insurance and reduce costs.
In July, we also learned that the Personal Health Investment Today Act (H.R. 2105), also known as PHIT, a bill pending in Congress, would allow for customers to be reimbursed for purchases focused on physical fitness, specifically hardgoods. PHIT would reduce the costs of physical activity to encourage healthier lifestyles. This bill is part of the overall health care reform legislation that is a top priority for the Obama Administration.
7. Fuel TV Expands Into Rally Racing And Mixed Martial Arts
After nearly eight years on the air, FUEL TV underwent the biggest evolution in its history starting September 20, 2010. The network—which reaches more than 30 million households—revamped its programming to target a broader audience by expanding into MMA and Rally Car Racing. Read our interview with Fuel TV General Manager CJ Olivares.
6. Active Boarder Acquires SierraSnowboard.com for $8 Million, Re-brands As Trusnow.com
Minnesota based Active Sports, Inc. announced today that it has finalized an agreement to purchase Sierra Snowboard, its inventory, Web site, and other properties for $8 million. Active Boarder Corporation, is an affiliate of Active Sports, Inc., which operates The House and Proboardshop.com. Steve Poindexter is the president of both entities.
Active Boarder says that it will be changing Sierra's name to TruSnow "to satisfy vendor relationship agreements." "The name change enables us to get every snowboard brand on board", says Poindexter.
Sierra Snowboard originally filed for bankruptcy in June, and the sale of its assets have been fiercely contested by its creditors. Jay Indyke, chair of Cooley LLP's Bankruptcy and Restructuring Division, which is representing seven of the largest creditors in the case not including Burton, says that there is approximately $12-13 million in outstanding trade debt at stake. No mention is made in today's purchase agreement of how the proceeds will be distributed amongst Sierra's creditors nor if Harrosh and his family are to receive any personal payment or release from liability to past debts.
Read the entire story on Active Boarder Acquiring SierraSnowboard.com.
5. BP Oil Spill
The devastating news of the BP Oil Spill hit the Gulf Coast hard back in April after the Deepwater Horizon exploded and sank on April 20. Several Gulf Coast surf shops reported that sales were off by more than 80% in July compared to 2009, and attributed the decline mainly to the amount of attention the story received from mainstream media which discouraged tourists from visiting the area.
Get a detailed look at what happened in this interview with Surfrider Foundation Marketing and Communications Director Matt McClain. Surfrider celebrated a major victory recently when the Obama administration announced a ban on new offshore drilling along U.S. shores for the next seven years.
4. The Evolving Chinese Market: What’s To Come For The Action Sports Industry
In our November issue, we took a look at why the earth’s largest nation is facing labor shortages and how action sports companies are responding.
Roughly a year after laying off millions of factory workers, a country that once seemed to have an unlimited supply of cheap labor is starting to show the world that its seemingly inexhaustible well is beginning to dry up. China, a country with 1.3 billion people, is seeing its workers climb the economic ladder to the middle class, various domestic policies are making cheap labor more difficult to come by, and in turn, action sports manufacturers are struggling with increasing costs and production times for Chinese-built goods.
China's developing economy, demands for higher wages, new labor laws, and limited shipping containers are just a few of the contributing factors that have led to delayed shipments for action sports brands. This has many manufacturers rethinking their Chinese production strategies.
We recently talked with Flat Fitty’s Noel Rix about the changing economic landscape.
3. Billabong Acquires RVCA
After months of rumors, Billabong International announced on July 11 that it had entered into an agreement to acquire Costa Mesa, California-based apparel brand RVCA for an undisclosed sum. The acquisition notice came as little surprise, as speculation of the news had been circulating since early spring. In fact, during an exclusive TransWorld Business interview conducted in May, RVCA Founder Pat Tenore made this statement when asked whether the brand was for sale:
"RVCA started in my garage and I have given it everything I have for the past nine years. Ultimately, I want to do what is right for the brand, my team, and everyone involved with RVCA. I think I have a responsibility to keep an open mind and not close any doors or miss opportunities."
Read the full story about Billabong’s acquisition of RVCA.
2. Andy Irons Passes Away at Age 32
The surf world was shocked and saddened by the loss of one of its favorite sons when Andy Irons passed away on November 2nd in a hotel room at the Dallas airport. Memorial paddle-outs in honor of AI were held worldwide as well as in Puerto Rico where the World Tour was gathered for the Rip Curl Search Puerto Rico.
Our deepest condolences go out to the friends and family of Andy.
1. ASR Is No More: Action Sports Retailer trade show folds
Following nearly 30 years of action sports trade shows in San Diego, the news of the show's cessation was apparently leaked at the beginning of November, following an announcement Tuesday, November 2, by San Juan Capistrano-based Nielsen Expositions, which puts on ASR, to the San Diego Convention Center.
Andy Tompkins, VP of Nielsen Sports Group, released a statement Wednesday discussing the factors contributing to Nielsen's decision to suspend the trade show, which include a challenging period for the market, competition among key brands and consolidation among retail shops.This dynamic, combined with tight credit markets, has been hard on the new, smaller or up-and-coming brands as well as many independent surf, skate and boutique retailers," states Tompkins in the release. "We expect this consolidated and competitive situation to continue to characterize the action sports industry in California for some time to come. Given these fundamental changes, it has proven to be increasingly difficult for the ASR shows in San Diego to serve the new needs of the action sports marketplace. Therefore, we are indefinitely suspending these events."