CIT: West Coast team featured in Fashion Manuscript.
FSG LAWYERS: Represented Loomworks Apparel (P.J. Salvage) on its acquisiton by Delta Galil.
Details on Industry Insight.
At Gotcha, Joel ran the business side while Michael was in charge of design, marketing and other creative initiatives.
Gotcha was a market leader when the recession of the early 1990s hit. The company made decisions during that time that later hurt the brand badly. Joel has some solid advice borne from that experience to help manage the current downturn.
During our conversation, I asked Joel how business was going for Lost. He said Lost had its best Q1 in its history. "Of course we are concerned about future orders given the economy, but if you ask how it is today, it's better than its ever been."
Here is Joel's advice:
The mistakes of the past
"At Gotcha, we panicked and were not true to ourselves. We reached out to wherever the nearest sales were because we were scared. We opened up more distribution and made decisions based on volume rather than longevity. We had this big overhead that forced us to do that. Quiksilver made better decisions for the long term. They weren't chasing this huge overhead - we were bigger than them then."
Gotcha expanded into department stores and other larger chain accounts before industry companies really sold in those channels, which hurt the brand at the core level. When the department store business went away, the brand could not regain its hold in surf shops.
Tips for today
"The most important thing is innovation. Right now, consumers have more choices. They can go for the cheapest rather than the best if they want.
"It's an opportunity for new brands, and for brands who are different, because consumers are looking for something new. Times like this separate followers from innovators. You have to innovate in design, marketing - everything you do. You can't sit on your laurels and do what you've always done.
"Yes, the economy is down, there's a recession going on. To me, surf (and other action sports) are going to survive the best (compared to the broader apparel market). We are different. That's what makes us special. At the start of summer, a kid is going to buy a new pair of trunks that will make him look different, make him stand out. That's our main advantage we have instead of him buying trunks for half the price at Target.
"Surf and skate companies need to stay true to themselves. Don't open up distribution to create sales. Dig in you heels in this down cycle. The economy will eventually come out of it."