The Global Financial Crisis and the surf industry

Industry Opinion

The big three have been hit hard by recession in the United States and Europe

Surfersvillage Global Surf News, 18 September, 2012 : - - Yesterday’s announcement that iconic brand Rip Curl plans to sell-up raises the question: just what has happened to Australia’s iconic surf brands? It has been well publicised that the big three surf labels – Rip Curl, Quiksilver and Billabong – have experienced shrinking sales and expanding debts. Suburban consumers have turned away from expensive surf-branded apparel. Coupled with the rise of online shopping, doubts are growing about the future viability of corporatised surf brands.

Raw economics certainly matters to the surf industry. The big three have been hit hard by recession in the United States and Europe, where they have concentrated most of their retail investment. Their timing was terrible. Just before the GFC, Quiksilver and Billabong both expanded their business operations. Billabong bought up a substantial number of surf retail outlets. Quiksilver acquired, and has since had to sell, a series of non-surf leisure brands – including Rossignol skis and Cleveland Golf equipment. Expansion added huge debts, which became difficult to finance when retail returns evaporated.

A subcultural industry

We think the problems facing the big three can also be explained through understanding surfing subculture. From informal beginnings shaping boards in backyard workshops and tool sheds, the selling of the surf remains strongly influenced by subcultural values and fashion cycles within the surfing scene.

In our new book on the surf industry, to be published next year by University of Hawaii Press, we make the point that, like music, it is a subcultural industry defined by a tension between “major” corporate labels and smaller “independents”. Independent labels have more credibility because they are considered closer to the grassroots of surfing culture. They are often based in specific surf cities and regions – southern California, the Gold Coast, north shore O’ahu – where surf subcultures are strong.

When brands grow and expand, they take on the character of corporate enterprises. The listing of Quiksilver on the NYSE in 1998 and Billabong on the ASX in 2000 signalled abrupt changes to the existing structure of the surf industry. Rightly or wrongly, many surfers felt that profitability and capital growth became more important than fulfilling surfer’s needs and desires. Surf companies have up-scaled production, acquired smaller brands, opened flagship retail stores and supplied stock to department stores. Quiksilver now supplies their surf-wear to department chain Macy’s in the United States and David Jones in Australia. Increasing market share is the goal, to pay shareholders dividends. Brand visibility to the masses is everything. But this undermines the claim to service local roots and the needs of every-day surfers.

Read the full article at The Conversation

Source: The Conversation

Authors: Chris Gibson / Andrew Warren

Tags: Surf Industry, Quiksilver, Billabong, RIp Curl

Opinion: Surfersvillage