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The future of surf is flat!

MORE MUSINGS FROM HAWAII

Managing any brand in the mature stage of its life cycle is always a challenge. The obvious case in point in regard to this issue is the recent problems with Billabong. Poor performance and mismanagement at Billabong saw the brands share price plunge from $1.83 to 96c and there is now talks of take over bids by both  NIKE and TPG. A far cry from Billabong’s heyday and the company’s public listing back in 2000.

We both worked for a ski shop when surf brands were considered the innovators in street fashion and when the surf category was going through its major growth phase. Back then, the best parties, the most innovative promotions, the cutest reps, the most exclusive events and coolest products all came from surf brands (with the possible exception of Burton snowboards). Boy times have changed!

So what happened?

The decline of the surf category could not have been more evident than on the 2OPINIONATED Hawaii trip. Here we were, at the birthplace of surfing itself and there was a complete absence of surf clothing on the streets of Waikiki.

 OUR RESIDENT 2OPINIONATED PHOTOGRAPHER OLYA BELL (IN PINK ON THE FAR RIGHT)

DOING HER THING SHOOTING SUNSET BEACH IN HAWAII

Clearly, when we talk of the decline of surf brands we’re talking the decline of the category at large, even today surf is still big business. It is estimated that Rip Curl (still a privately held company) does sales in excess of $400 million and Quiksilver’s global sales last financial year were in excess of $1.99 billion. According to Reuters, Quiksilver’s 5 year sales growth rate is only 2.55% compared to an industry rate of 19.72% and a sector rate of 4.87% and like a lot of other brands they are looking at emerging markets to fund their growth.

At 2OPINIONATED we have a few thoughts on these flat sales figures in the surf category and after much consideration, we think the decline comes down to 5 key factors

No 1) Alternative sports have become mainstream

When surf brands were established in the 60’s and 70’s, to be a surfer meant you were renegade, an outsider. Surfing culture was anti-establishment and the culture of surf brands supported making an “alternative” lifestyle choice. 

…to directly quote the history tab on the Billabong website

‘During the late 60’s and early 70’s, the surfing lifestyle meant getting in your kombi van packed to the rafters with surfboards, surfmaps, tents and sleeping bags and heading to the coast for classic surfing safari.

These days there is nothing alternative about being a surfer. The Kombi has been retired and todays surfing safaris more likely to be to a posh resort in Bali, Hawaii or Mexico. Even the other alternative sports (skate & snowboarding), all the major surf brands later adopted as their own in order to revitalise their flagging business model are now seen to be mainstream sports.

So in effect, surf brands don’t stand for anything special anymore.

No 2) Failure to innovate

Traditionally surf brands have had a reputation for being innovators. Rip Curl built their business by making superior wetsuits and Billabong pioneered a better boardshort for surfers – but they are innovators no more ! Our research indicates that there have been no groundbreaking changes to surfboard technology in years. When compared to the rate of technology development in other sports, surf brands just appear to be complacent.

For sports brands new product development in their technical apparel offering is always designed to appeal to their most faithful and loyal customers. To build a strong business in technical apparel you have to give your best customers an incentive to invest in new technology and therefore encourage them to update their gear each year (otherwise they are just going to hang on to that old rashie for the next 5 years) !

When it comes to product innovation in the surf industry the only major developments in apparel appears to be Hurley’s Phantom range. The technologies used in this range are outlined in this clip below…

The Phantom series was certainly a major innovation for the surf industry but not revolutionary in technical apparel in general. These very same technologies have already been in use in the outdoor, technical running, golf, performance swimwear and equestrian categories for years.

This just makes business sense to constantly develop new products that inspire your best customers to buy from you more frequently.

No 3) Menswear grew up

In the golden era of surf brands straight men weren’t allowed to be into fashion.

Wearing surf brands gave men an acceptable outlet to be creative with their clothes. Because they loved their surfing it was OK for them to express themselves by wearing surf brands  These days it’s not only acceptable for men to wear pink but it’s socially acceptable for men to openly express a love of fashion and there’s a whole plethora of brands are on offer to allow men to indulge in their newfound passion. A new style aesthetic has emerged for men (like Ksubi below), one that has a heritage rooted deeply in fashion and not in sport.

Surf apparel just doesn’t have the same cache anymore.

No 4) Street fashion has evolved

Streetwear has evolved and it no longer takes its cues from sports brands. We have seen the rise of the Luxe Sport movement, personified by designers like Alexander Wang (see below) . Price points went up and these new product lines had an emphasis on cut, structure and exquisite detail and as a result the fabrications went from cotton to cashmere.

Surf brands were able to mask their potential downward spiral by expanding their own retail operations (Quiksilver Inc. operates over 834 stores worldwide) and by the acquisition of smaller boutique brands. Billabong went on an acquisition frenzy buying up brands like Nixon, Element, Von Zipper, Da Kine and Tigerlily. This strategy may have temporarily given the brand some credibility with younger consumers but it ultimately couldn’t stop the rot.

The bigger the surf brands became the less derivable their offering was to consumers

5) We’re sold on exclusivity

When we reflect back on our days on the shop floor, the best sellers were the items that featured massive logos and obvious branding like we see on the Quiksilver T’s below

These days we might wear fast-fashion but we don’t like to see obvious logos on our egalitarian labels, instead we prefer them to be discretely branded. You don’t see massive Zara on the front of any of their apparel.

If we are going to wear something if a logo on it we want it with be on either something super-expensive or on super-cool, we rarely want to see bold logos on everyday casual.

The very “assets” that use to make surf brands cool now make the brands themselves look dated.

So what can other brands learn from this experience?

Brands can’t ride the wave of popularity for ever…brands need continually to reinvent themselves and change with the times or the tide, as this case may be!

3 Comments Post a comment
  1. MiCHAEL #

    Nice piece. A couple of interesting companies bucking the trend – check out the new Lib Tech waterboards for some real surf innovation (http://www.libtechwaterboarding.com/), and Saturdays surf in NY trying a different angle… http://www.saturdaysnyc.com/

    July 2, 2012
  2. Sally #

    My favourite article so far. So interesting — and something I hadn’t thought about, even though I surf.

    July 2, 2012
  3. Thanks for the positive feedback Michael and Sally. We might do a follow up piece. Quiksilver just announced today on WWD that they are going to have stand alone women’s stores aimed at an older audience than Roxy. Perhaps that’s the way of the future

    July 3, 2012

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