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  GSI President Mark Kelly with Hayden Cox. Photos by Shelby Stanger for Shop-eat-surf.

Back at Surf Expo, we caught up with Global Surf Industries President Mark Kelly. We talked about what’s new at GSI, the Australian economy, the hardgoods market, and the changing retail landscape.

 

How is business?

The GSI booth at Surf Expo

Last year was our highest grossing year, which is pretty good. Our mix of products has changed a lot. We sold a fair amount of SUPs. Standup paddleboards make up about 38% of our revenue right now, and that portion is growing. At the same time, our surfboard business came back so that gave us a double bump. We are looking at a 30% increase this year.

 

What’s new? What are you excited about?

We just picked up Stewart and Haydenshapes out of Australia. We have 15 brands total now, and lots of different technologies. We have everything from 4’11 soft surfboards to 14 foot SUPs.

 

Hardgoods has been tough? How are you thriving?

We don’t have any categories not working for us. A year or two ago when everything in our world was doom and gloom, we concentrated on service and kept staff levels really high. In fact we have added a couple of service positions.

 

How many accounts do you have today? 

We have about 375 active accounts in the U.S. right now. We service the U.S. with only three Territory Managers, but we do everything ourselves, except the PR stuff and warehousing.

 

What are you most excited about?

I think the HaydenShapes is going to be really good. Hayden is really young and has a creative buzz. He connects with younger surfers really well. He is definitely not a follower. His own surfing and team riders have been great additions.

 

As a compliment to our portfolio, we also picked up Bill Stewart. He is an icon of So Cal board manufacturing and has been in business a long time.

The Albacore

 

One of the other things I’m excited about is the finless Albacore model, as part of The Seaglass Project, which we are doing with Tom Wegener. We came out with the Albacore, which is a foam finless alaia. It weighs almost nothing.

 

Last year we came out with the Tuna, an epoxy version. It retails at $500, which causes some hesitation to purchase it, so the Albacore will be $249 and $279 for the 4’11” and 5’6” models. Lots of people want to try finless surfing, but we need to give them tools to make it accessible.

 

On top of this we have a new line of soft surfboards aimed at the retail entry-level market.

 

These days there is not a lot of the stuff we do that is “middle of the road.” We are really trying to attract the fringes.

 

Also the future flex technology with carbon rails, which we are bringing in with the HaydenShapes models, is really exciting.

 

What’s going on with the Australian economy? I know it has been rough over there.

They call it a two-speed economy. There is the mining sector exporting natural resources to the world making huge profits and then there is the rest of the economy, which seems to be struggling.

 

If you are a miner, you make a lot of money. Base salaries are around $100k/year. For the rest of economy, it’s a lot tougher.

 

See Page 2 for more about the Australian economy, including the retail landscape, more

 

 

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What’s going on at retail there?

Good retailers are doing okay. The main thing is if weather is good and we have swell, retail is good. Last year we had Brisbane floods, this year was the wettest December in 61 years so that doesn’t bode for a good summer.

 

The other thing is Billabong is buying all the shops so I don’t think it’s the greatest thing for the industry. I am not sure where they are going, but the strategy seems to have a few question marks about it.

 

Another view of the GSI booth

It’s also an interesting time right now because people can buy a lot of surf related products online. If you go into a shop and the retailers says, “I can get this or that for you” the consumer will laugh because they can just go get it online themselves and it will be there the next day.

 

I think there are a lot of retailers who think that opening the doors to their shop is just a marketing exercise. Times are changing for sure. If you go into an Apple store, it’s packed. It seems like Christmas Eve almost every day. But that’s because Apple offers lessons, they teach you how to use equipment, and at the end of the day you buy their products.

 

Retailers have to become more interactive. An example is shops that buy demo boards clearly sell more boards versus the ones that don’t or can’t be bothered.

 

I think the value proportion is a bit tough as well. If you look at the cost of an iPad. It’s around $500. And some of our boards retail for more than $900. You can get a lot of value for your money on some technical products these days.

 

So how are you growing? How do you keep up with new technology?

We are not really looking to open many new accounts. We have the distribution we want now. It’s just geographically based, but the quality of our product offering is growing up dramatically. We offer service like no one does, and we have passionate staff that do a good job every day of the week.

 

GSI’s Alex Pappas and Mark Kelly

Our carbon footprint as a company is low because we all work from home. Even our latest dealer catalog is an iPad app that continually updates for dealers.

 

It’s great because you can click on a Haydenshapes board, and see a video of Hayden talking about boards, watch people riding boards. With the internet, consumers know as much or more than retailers do about certain products for sure.

 

Consumers these days spend a larger and larger amount of time researching a product they want to buy, so shops ability to swap sell is getting limited. So we are spending a lot of time and effort on our website.

 

We have one full time web designer, part time graphic designer/videographer, a part time copywriter and two full time guys doing live chat with people to help people find out about our boards and help navigate them to our retailers or through their different board options.

 

Just out of curiosity as one of the largest manufacturers of surfboards, and looking above at this huge rack of them hanging at this show, how many boards do you personally have in your house? 

About 70.

 

Only 70? Ha! 

It’s like a golf bag. Every time I get home, I check the surf to see what’s happening. If it’s flat I might take out an SUP, or I might surf three or four boards a week.