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I'm aiming to talk to industry veterans who have lived through a downturn before to see what they learned from the experience.
Shaheen was a key player at Gotcha during its heydey and also worked at Quiksilver, including a stint as president, before building The Lab and The Camp shopping centers with his wife, Linda. The couple is expanding its development business, and have won the rights to build a boutique shopping center in San Clemente. Lab Holding LLC scored another huge coup in late March when the Portland Development Commission chose the company over several national firms to redevelop the historic Centennial Mills flour mill in the Pearl District in Portland. Here's more on that project.
Below, Shaheen shares his perspective in his own words on working through a recession from a brand's perspective and discusses what is different this time around from the downturn of the 1990s.
The last decade has seen huge growth in the industry from new companies like Volcom, DC, Reef, Element and Nixon and many more. Every industry has a slow down at some point and it's a good time to pull off the freeway and look at the map.
There's a lot of opportunity.
In every decade there seems to be a clean up period, a time to correct complacency.
In the last downturn, O.C. went bankrupt - which was not expected. The savings and loan industry got into trouble; there was the first Gulf War, the neon trend in surf faded. The market shifted from beach to sportswear, club wear and grunge became popular. At the time, department stores didn't carry surf brands year round, and specialty stores such as PacSun and Zumiez, were localized. The snowboard industry was minute, and the girls surf category was tiny to nonexistent and skate was fringe.
Some brands didn't make it, but others made some long term strategic decisions that allowed them to substantially increase market share when the economy came back around. At that time, Quiksilver was fairly well established internationally and was a public company so had access to capital. It had the luxury of concentrating on the core after much of the department store business went away. Missed sales in the U.S. got picked up in Europe and Australia.
Then, the fundamental financial structure on Wall St. was okay. Now, there's huge uncertainty among Wall Street firms, conditions that are being compared to the time of the Great Depression. That's not good for financial markets or any other market. When combined with the housing situation and gas prices, food prices, medicare, the auto industry and add to the mix the emerging global market and demand for goods, this all puts America in a hard spot. In the last recession, we only had a few areas to fix. Today there are many. That is the underlying uncertainty that will take some time to correct. Bottom line: we're in the midst of a historic cultural shift in America towards less consumption and more sensibility in all aspects of our lives.
As painful as it may seem, at the other end some cool young brands and retail concepts will emerge to refresh the marketplace.