Dane Reynolds Craig Anderson

Opinion: Why Quiksilver Failed!

…and why you can't start a surf co with less than two million American dollars… 

The only thing surprising about Quiksilver’s filing for bankruptcy is that it took this long to happen.

The company has been losing money for eight straight years – all the cut and tuck maneuvers, the restructuring, the sell off of brands that weren’t essential to the core business – all those correct decisions did not solve the bigger problem facing the brand, indeed the industry as a whole, which was lack of demand for the look.

In reality, the critical mass of the surf industry began to fragment in 2005, resulting in a steady decline in revenues and earnings that only began stabilizing in the last few years.

The reason for this was the mall customer, (the aspirant customer that grew the surf industry’s footprint initially), shifted out of surf looks and into a mosaic of different looks: street, urban, athletic, contemporary, outdoor, vintage, etc.

As a result, surf resources today are challenged not only by endemic competitors but also by competitors from these different genres.

The era of brands growing from $0 to $100 million in 10 or even 20 years is over. Today success lives in modest neighborhoods. The last gravy train to leave the station was RVCA

This fragmentation of taste and trend undermined the foundation of the industry’s business model forcing what was once a brand-centric environment to become commodity driven. Margins are down, quality is down and the level of design detail in fabrication and styling is nowhere near what it was 10 years ago.

The growth horizon for start-ups and small brands in general has shrunk considerably. The era of brands growing from $0 to $100 million in 10 or even 20 years is over. Today success lives in modest neighborhoods. The last gravy train to leave the station was RVCA.

When a small brand becomes ‘noticed’ and sells into key specialty stores nationally that normally means they’re doing around $2m – $5m annually at the most. When a brand is considered to have ‘arrived’ like say for example Roark, they are doing around $8m – $10m worldwide. And when a brand is considered to be ‘established and still growing’ like say Brixton, their sales are in the region of $15m – $20m.

When a small brand becomes ‘noticed’ and sells into key specialty stores nationally that normally means they’re doing around $2m – $5m annually at the most. When a brand is considered to have ‘arrived’ like say for example Roark, they are doing around $8m – $10m worldwide. And when a brand is considered to be ‘established and still growing’ like say Brixton, their sales are in the region of $15m – $20m. A quick way to establish brand size is whether they are factored or not. You can’t be factored doing less than $5m.

The baseline investment for a start-up in this environment is $2 million. Anything less the brand will fail. Most small brands will fail anyway but this has not seemed to discourage the numbers of start-ups because there is more than 2 times the number of brands in this space today than there was 10 years ago. The mortality rate is high – it takes a small brand 12 months on average to burn through the first $1m in seed capital.

In the early stages the only way for brands to get critical mass is to penetrate the specialty chain distribution – PacSun, Tilly’s, Buckle, Zumiez. And you need to be in at least two or three of them to get momentum.

Kids out of college have dreams in their minds and stars in their eyes thinking about being the next RVCA or Volcom but the cold hard truth is this is an industry with sub-=par margins and very little capacity – an industry devoid of comfort and chic with no low-hanging fruit because anything you can reach for is already picked clean.

Scaling a brand today is a very decentralized proposition. A decade ago the distribution channels were specialty stores, major stores and international. Today its specialty, specialty chain, department stores, sporting goods stores, outdoor stores, online retail,  own brand online, flagship retail, outlet retail, off-price SMU, international distributors, outside industry collaborations – it’s a complex matrix that’s very management intensive.

The surf industry today is more a lifestyle and less a career direction, than it’s ever been. Kids out of college have dreams in their minds and stars in their eyes thinking about being the next RVCA or Volcom but the cold hard truth is this is an industry with sub-par margins and very little capacity – an industry devoid of comfort and chic with no low-hanging fruit because anything you can reach for is already picked clean.

The winners of the future are the brands with a strong identity and a clear purpose. They are brands who stand for something and have recognizable core products they sell season after season.

That said the winners of the future are also those with the ability to respond to emerging trend and not allow those same core products to become a constraint to their brands to the point of ignoring newdirections because ‘that’s not who we are..’

Anything can work depending on how it’s interpreted

Read more of MT’s insightful stories, as well as sharp biz advice here. 

 

(Michael Tomson is a South African-born former pro surfer who started the game-changing surf clothing label Gotcha, grew it to $65 million, sold it and now lives in Laguna Beach where he writes, consults, cocktails, and enjoys frequent visits from BeachGrit.)


Mental Test: What Would You Do?

Three different surf scenarios involving kooks, kids and junkie shitbags that beg your opinion… 

I learned a cool new term today, engagement marketing. It’s, essentially, when a company tricks consumers into believing they’re contributors. Make ’em feel like they’re part of the brand, more than just a potential source of revenue.

Pretty clever, if you can make it work.

Why spend effort, or money, on something you can convince people to do for free?

I mean, yeah, in the end you probably get what you pay for, but, luckily, the bar is set ever lower as more and more people embrace the crowdsourcing movement.

It’s something we at BeachGrit stumbled onto more or less accidentally. Somehow ended up with a nice little community of commenters, most of whom have at least half a brain rattling around inside their respective skulls. Which, in the context of the internet, is pretty damn impressive. We’re turning into some sort of misanthropic aquatic Algonquin Round Table. I get a real kick out of it.

So I was thinking, rather than write something, which is kind of difficult, I’ll just pose some open ended questions to y’all, which is easy. This way you’re not just commenting on an article, you are the article.

Truly engaged! And, no, we will not be paying anyone.

Maybe it’ll fall flat and everyone will just tear me to shreds. No big deal, I can pretend it never happened. In a few days it’ll get pushed off the front page, and everyone will forget about it. Which is a beautiful thing when you do poorly, though I’ll admit it kind of sucks on that rare occassion you think you’ve done well.

Here’s the first installment of What Would You Do? If it works you’ll see more. If it doesn’t, oh well, I’ll have to keep digging through my many notebooks of “ideas,” which mainly consist of grocery lists I forgot to bring to the store and cryptically illegible notes I wrote while under the influence of some sort of intoxicant.

Scenario #1

It’s an amazingly fun, ultra-consistent, head high day at your local spot. Only a few guys out, one of those times everyone is having a blast, fallen into a perfect rotation. Taking turns, hooting for each other, getting to actually live the lie that is a beginner’s notion of the sport.

You surface to him losing his shit. “You fucking kook, that was assault! I’m gonna call the cops! If my board’s dinged you have to pay for it!”

Out paddles a total stranger. He makes a beeline for the peak, gives you full-on eye contact, turns and burns you from arm’s reach on the first wave that rolls through. Falls in front of you on the drop, makes you to tangle up and share a mellow little drubbing.

You surface to him losing his shit. “You fucking kook, that was assault! I’m gonna call the cops! If my board’s dinged you have to pay for it!”

You ignore the guy, reel in your board and paddle back out. He follows, continuing to scream.

What would you do?

Scenario #2

It’s Saturday morning and you’re about to leave the house for your kid’s soccer game when a friend texts you a photo of your local spot just completely going off. Next message reads, “Get here now. Best I’ve ever seen.”

You only signed him up because the school counselor said a team sport might help alleviate some of his “behavorial issues.” It’s not working though, he’s still a little prick.

Your kid is terrible at soccer, hates the game, doesn’t really care if you go. Would rather not attend himself. You only signed him up because the school counselor said a team sport might help alleviate some of his “behavorial issues.” It’s not working though, he’s still a little prick.

But today it’s your turn to bring the orange wedges and Hi-C. If you no-show you’ll catch a ton of shit from all the try-hard parents at the next practice.

What would you do?

Scenario #3

Your junkie shit-bag neighbor steals all the boards from under your house. You call the cops to report it, but they don’t give a shit and refuse to do anything.

Your junkie shit-bag neighbor steals all the boards from under your house. You call the cops to report it, but they don’t give a shit and refuse to do anything.

A month later you’re driving through town when you see one of the missing boards for sale outside a local shop. You pull over, go inside, and tell the manager. He calls you a liar. Swears he knows, for a fact, the board isn’t stolen. Accuses you of being a scammer. Things get heated, he orders you to leave the store.

What would you do?


Rumor: WSL loses major sponsor!

Tears flood WSL's Santa Monica office. Tears and frowns.

Of course you follow the women’s surf game. How could you not? Some of the most exciting players are rising through those ranks. Is it possible to say no to Carissa Moore? What about Tyler Wright? Tatiana “The Mother of Dragons” Weston-Webb? The Taggart Women’s Pro in Craig Anderson’s hometown of Merewether, Newcastle is on hold today but you know what will not be on hold ever again maybe? The Target Maui Pro.

The final event of the season, taking place on gorgeous Honolua Bay, Maui, has allegedly lost its sponsor, Target. The rumored reason? Insufficient value to cost.

Ouch!

Remember when America’s second favorite big box discount retailer got into the surf? Signings of Carissa and Kolohe Andino, a house on the North Shore, event sponsorship, the works!

But now, many years on, the powers have glanced at the ledger and found return on investment to be wanting. One would maybe have to assume that Carissa/Kolohe sponsorships get dropped next.

Really, though, Target jumping ship begs a larger question. The World Surf League has tucked one full season under its belt. CEO Paul Speaker did the business television show circuit, promising to grow our beloved pastime massively. “The world surfs!” he shouted, jabbing a thick finger in the air. “And brands are going to want to reach those multiple tens of millions of people. Yes, the world surfs even though I don’t!”

Except maybe uh-oh? There hasn’t been one major sponsor coming on board. There have been major sponsors jumping off board. Could it be possible that basically only me, you and the other two people in BeachGrit‘s comment section care about surfing?

Will you miss Target? Will CEO Paul Speaker? If you formed a shell company right now, how much do you think it would cost to be title sponsor of a World Surf League event? Do you think $50 and three packs of gum would be enough?


Test: Are You A Surf Clown?

Is there anything better than mocking beginner surfers? Maybe not!

Is there a word for the type of middle-aged guy who’s achieved success in one facet of life and thus assumes he can succeed at anything? Hubris describes the state, but I’d like something a little more specific. Maybe a nice little portmanteau. Hubridiot? Egotard?

Those are terrible, but you know what I mean. It’s like when my father in law, while asking me about my freedive adventures, decided to spout, “Yeah, but you use weights and fins. I can do eighty feet without either.”

But when the beginner in question is riding some high-priced, name-brand glass, whether it’s a beautiful …Lost hiperf or a tarted out $1200+ Hatzikian hatchet fin log, that’s comedy. The contempt I feel for that shit definitely stems from childhood, talking shit about the spoiled rich kid whose parents always hooked him up with brand new sleds and that season’s hottest wetsuit, but somehow never learned to link a bottom turn to anything.

Hard to believe, since he’s built like a potato that can’t admit it’s going bald. And as someone who’s gotten pretty close to that depth, with weights but sans fins, it’s harder than you’d think.

It’s definitely made worse when they’ve got the financial wherewithal to stroll into a shop and kit themselves out like a pro. Top of the line everything, I look just like everyone else! I belong!

Which is hilarious in itself. I try not to mock beginners, we all started somewhere, and not everyone was lucky enough to grow up with a father who surfs, always an easy bike ride from the beach.

But when the beginner in question is riding some high priced name brand glass, whether it’s a beautiful …Lost hiperf or a tarted out $1200+ Hatzikian hatchet fin log, that’s comedy. The contempt I feel for that shit definitely stems from childhood, talking shit about the spoiled rich kid whose parents always hooked him up with brand new sleds and that season’s hottest wetsuit, but somehow never learned to link a bottom turn to anything.

Last Summer, when Hawaii was surrounded by triple hurricane heaven, I found myself lined up off the point when a guy on a 10-foot-plus longboard somehow managed to splay leg paddle his way into the lineup.

Immediately headed a few feet deeper than me to set up shop, which is always annoying, but whatever. I’ve lived on Kauai for about a year and a half now, and even though the haole rules of invasion make me a full blooded local, I let him be. Plenty of waves to go around, and if I’m being totally honest, I was kind of scared. It was fairly big, I wasn’t in great shape, spent most of the session dodging sets and hoping I could luck into a roll in.

Sick little right rolls right to us, and I watched as he put his head down and paddled as hard as he could. Kind of confused, because he was really far out in front of it, pretty much where the lip was headed.

Went as well as you’d expect. Full might of the Pacific Ocean straight to the small of his back, board flying, everyone in the lineup doing the prairie dog. Heads up, scanning, making sure the guy doesn’t drown. Deserved or not, no one wants to witness a death. That’s a great way to ruin your day.

But he got lucky. Beat all the way inside. Probably thought he’d just had a ten-minute hold-down, next few waves pushed him all the way to the beach, where I saw him drag his carcass up the berm and collapse.

This movie says everything…

SURF CLOWN from Ralph’s Pic Of The Week on Vimeo.


Tom Rezvan
The forty-year-old Huntington Beach surfer Tom Rezvan is a hunter of waves. This is Rezzy at the Wavepool Wadi Adventure Park in the UAE. What sorta man spends his life chasing wedges? "You know those guys who invite you to go to Lowers and then has to stop to get coffee, a bar of wax, chats on the phone, and then wants to grab a quick burrito for when he’s down on the beach? Yeah those guys can’t do this."

Meet: The Janitor Who Surfs the World!

Tom Rezvan works as a janitor and… surfs the world! Eight international trips a year! But, how?

In the dismal days of job automation, a hankering surf habit and a case of wanderlust are the kiss of death. Many are perfectly content with 14 days of freedom out of 365, but for us real adventurous mother fuckers. Staying put is a death of everyday truth. 
We must runaway to remain sane, but international vagabonding costs a fortune and bouncing around within one’s borders just doesn’t quite have the same appeal.
So how does one go about funding such a life?
Do you hawk morality and skip out on youth, only to wash up on the shores of middle-aged existence, a flabby failure with pale cold hands gripping money hard earned? No, that would take too long. You need to leave right now. 
What if I told you that Tom Rezvan, 40, has been pushing, on average, eight international trips a year since 2011 and contrary to rumors, he is not an heir to a trust-fund, a drug smuggler or a spy, but works part-time as a janitor for a school district. 
If you pay homage to his Instagram or Facebook page, you’ll scroll through a dazzling feed rich with stories of travel and photographs from strike missions in the name of surf and culture. All of these jaunts across the globe however are done in three or four day hits, just enough to sedate the aesthetic voyager in Tom before he heads straight back to work on Tuesday. 
You know those guys who invite you to go to Lowers and then has to stop to get coffee, a bar of wax, chats on the phone, and then wants to grab a quick burrito for when he’s down on the beach? Yeah those guys can’t do this.
But how does he afford to decorate his passport so extravagantly? BeachGrit called to find out…
BeachGrit: How do you get off work on a Friday and decide to go to Rome, or Egypt for the weekend?
Rezzy: I’m one of those people who can’t sit still and am lucky enough to be able to disappear whenever I want.
BeachGrit: So how do you do it? Do you buy an around the world ticket in the beginning of the year or do you have a sugar mama? 
Rezzy: No, one of those tickets would cost way more then what I do and women slow me down. I am on a high-priority standby list courtesy of an anonymous employee of a major airline. I pay the taxes for the flights which comes out to be 10% or less of the ticket price.
BeachGrit: How do you navigate your way through new locales”?
Rezzy: I use this app called Navmii, it downloads the entire map of the country you are in. Every satellite view of every road that you need to know. It downloads a shit ton of data though but I have entire maps of most of Europe. 
(Author’s note: I imagine Tom riding on a buddy pass in the middle seat with his knees drawn towards his chest, breathing like a Buddhist monk. Perfectly calm, harvesting his chi to unleash once the plane touches down and he clears Customs and Immigrations. He would then take out his iPhone on airplane mode, hail a taxi,  and carry on with reckless abandon like an Indiana Jones in boardshorts.)
BeachGrit: How do you sleep on planes?
Rezzy: This isn’t a normal buddy pass, I’m fortunate to fly business class most of the time and with this particular airline, they have fully reclining beds. I sleep most of the flight and then only sleep three to four hours while I am traveling.  Not everyone can do what I do. I have to map out and plan everything as much as possible because getting stuck at an airport or a train station means the strike mission is over”. 
BeachGrit: What kind of person do you have to be to pull this off? 
Rezzy: You know those guys who invite you to go to Lowers and then has to stop to get coffee, a bar of wax, chats on the phone, and then wants to grab a quick burrito for when he’s down on the beach? Yeah those guys can’t do this.
BeachGrit: No laggers allowed, got it.  Do you always travel solo?
Rezzy: Yes, I have too. Nobody I know has this buddy pass so I would get bumped off the flight as well. Most of the time, I’m the last guy on the plane. How this works is that my golden ticket allows me to fly direct to major airports that the airline is headed too, but the connector flight I book and pay for myself. Sometimes I have multiple flights reserved at once, like when I went to Egypt I had five flights reserved at one time with destinations heading in every direction to avoid getting stuck and missing out on the experience.
Beach Grit: Tell me. Highlights?
Rezzy: The greatest aspect of what I’ve been able to do is score waves that rarely break. I’ve scored Mundaka and Desert Point absolutely flawless by tracking a swell a few days in advance, and spending countless hours investigating what was the best and cheapest way for me to get there. I flew from Lax to Singapore and straight into Lombok to surf Deserts. Most people hang out in Bali for months hoping to score Deserts, and they have to slug it out on a ferry with flies and no sleep. I bypassed that whole part of the journey and arrived ready with my tent and bug repellent.
There was the last swell of the winter in northern Peru a few weeks ago and I’ve always wanted to go to that area and surf those lefts. I’m also super into archeological stuff as well so I wanted to see Machu Pichu and Nazca Lines (geoglyph portraits of animals handcrafted by the Nazca circa 500 B.C). Most people do that in two weeks and I was trying to do it in five days. The goal was to get there in time for the strike and then get south as fast as possible and do the ancient ruins. I had to take nine planes in total, two trains, and two busses, leave boards at the airport in Lima, and get my boarding pass 24 hours in advance. I thought I had thirty minutes to board the plane from Cusco to Lima, but I actually had no time at all. So I paid a taxi driver double to pull off the impossible and get me there before five pm and he did it. I was picked up from my hotel in Lima the following morning and saw the Nazca Lines.
BeachGrit: What have you done to fund these travels? You don’t have to tell me if you’re 007.  
Rezzy: (Laughs) Everybody thinks that I am a spy. I was being paid professionally to surf two years ago and had a decent career in the 1990’s and 2000’s and once scored a back cover in a surf magazine as well. I have had four different ways of obtaining income and that has varied in the recent years. I used to have a travel company called “Rez Charters” that took pro surfers to the Mentawais islands (Wilko, Eric G, Tonino, and Simpo included) , and have traded stocks. I’m not from a rich family. My father is retired and in a nursing home. The whole short trip idea started because I was looking after my dad’s health. He suffered a major stroke and I couldn’t be gone for long periods of time for fear that he wouldn’t get the health care that he needed. So after six months of visiting the hospital two times a day every day of the week, just totally burnt out and exhausted,  I thought I would go to Egypt for three days. I made some phone calls, looked at flights and accommodation, booked it and made it work. From the success of that first trip, I knew that with this buddy pass, I could leave the country, and get back home to work and take care of my father.
BeachGrit: You’ve ridden the world’s best wave pools far before the surfing media even knows they exist. How do you have your finger on the pulse of these machines? 
Rezzy: I have surfed Wadi in Dubai, Wave Garden, and Snowdownia. The trip to Dubai was my most successful surf trip ironically. I caught three hundred waves in four days and returned home with a hard drive full of images.
Tom tells me that he has to get off the phone because that he is packing for a swell headed to Desert Point. His board bag weighs exactly 50 pounds and he’s going to be back to work on Tuesday. He’s a genius, a magician of the system that keeps wild men rooted in their location. I am envious of Tom and the way he seems to teleport across the globe.