Opinion: The Changing Tide in Surf
There is a generational shift afoot in the surf industry right now that is playing out across the marketplace in a variety of ways. We’re seeing acquisitions of popular surf brands, and family-run businesses focused on succession planning as they prepare to pass the reins to the next generation.
We’re also witnessing a renewed interest in blending more tangible consumer experiences via brick-and-mortar with well-oiled e-commerce and direct-to-consumer channels that have exploded in recent years, especially coming out of the pandemic. And, of course, transformational challenges that even some of the most established players are now experiencing that are shaking up the industry.
But while leadership changes, corporate restructurings, and supply chain disruptions have historically been difficult, today they are creating new opportunities. These transformational challenges are giving way to new ownership, fresh, new visions for brands, and aggressive growth strategies that have the potential to redefine not just these companies, but the future of the entire industry.
There’s perhaps no better example than Authentic Brands Group’s recent acquisition of Boardriders, the parent company of heavyweights like Quiksilver, Billabong, Roxy, RVCA, DC Shoes, Element, VonZipper and Honolua—some of the most iconic surf brands. With annual retail sales of more than $29 billion worldwide after the deal closing, Authentic has made it their mission to sweep up and rehabilitate struggling retail brands. Their growth strategy is relatively straightforward: leverage production and distribution licenses with their myriad of partners around the world to develop the brands on an even grander scale.
For Boardriders, as one example, Authentic has said their plan is to utilize its partner network to convert the Boardriders business into a licensed business model. By tapping into relationships with operators to better manage manufacturing, retail, e-commerce, and wholesale operations, Authentic is hoping to breathe new life into businesses. With more than 40 brands across a variety of categories under the Authentic umbrella, the possibilities seem endless, but we know that there will bumps in the road ahead of them.
Some industry veterans criticize an acquisition of this size and scope, suggesting household names like Quiksilver, Roxy and Billabong will lose their edge, key people that breathe passion into business will be lost, and, more importantly, their connection to their core customers will be challenged. There could also be concern that the design, sourcing, and quality of materials could change when the new owners consolidate resources across dozens of brands or license out the brands, which could affect quality control protocols creating disjointed brand messaging and shopping experiences for the end customer.
But with these changes also come growth opportunities and opportunities to collaborate. Now that many surf brands are catching up to the omnichannel approach to reach new surfers, brands are being forced to do business differently than they used to. Whether a brand is selling brick-and-mortar or e-commerce or across all channels, there’s now a need to have the right tools, the right people with different skill sets and the right financial partners in place to help secure the liquidity needed to expand product lines and fuel sales growth. At a time when venture capital and private equity funds are becoming more limited, it’s important to find new ways to fund a brand’s growth and address challenges to prepare for the future.
In the same way that great surfers are energized by finding the biggest wave or conquering the next challenge, today’s surf brand owners must be driven by a similar mentality to be successful. Exuding confidence, embracing creativity, thinking on your feet, navigating challenges thoughtfully, and pivoting to change course when the circumstance demand it are all critical in today’s evolving economic climate.
For newcomers to the industry—and also veterans looking to reinvent themselves and their brands—there is a real opportunity to appeal to today’s version of the genuine “surfer” consumer. As more brands look for ways to attract these new consumers, we expect to see shelf space open up for smaller, breakout brands, and for the new wave of collaborations of existing brands which will create an exciting time for the surf industry.
Anyone in this business will tell you that the lifespan of brands being widely acknowledged as “cool” is typically not a very long time, so brands work hard to stay relevant and/or provide technical clothing that meets the surfer’s needs. Given that, there is room for brands and owners to reinvent product offerings and an appetite for introducing products that are entirely new. Building a brand story that resonates with customers has always been a hallmark quality of standout surf brands, so any brand entering—or re-entering—the scene now should have a compelling, authentic story to tell in conjunction with quality product at price points that are competitive.
For the next generation, learning every aspect of the business, understanding how the industry works, and surrounding yourself with the right people will prove to be critical to any newcomer’s future success. Developing relationships early on with vendors as well as with customers, retailers, financial partners, and lenders will set the stage to establish a robust business. Even in the financing world, relationships are paramount and help to build trust and rapport.
Building strong relationships from the start will pay off when brands are in need of debt financing to support new initiatives and take advantage of meaningful growth opportunities in the midst of an uncertain but exciting time in the surf industry.
Maria Contino is the western region sales manager at Rosenthal & Rosenthal, a factoring, asset-based lending, PO financing, DTC and e-commerce inventory financing firm in the United States.