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I met Blitz Distribution President Per Welinder at the IASC skateboard summit and was intrigued. A former professional skateboarder from Sweden with a UCLA MBA is a pretty interesting combination.
So on Friday, I visited Per at his company's Huntington Beach headquarters to find out more about Blitz and his background. We spent two hours talking about a wide range of topics including Per's friendly separation from Tony Hawk, the lure and challenges of apparel brands and how the MBA has helped him in business.
Lot of changes: It was a good time to catch up on the changes at Blitz, which currently has five brands under its umbrella. Blitz owns the skateboard deck brand Hook-Ups, truck company Fury, and a young lifestyle apparel brand called JSLV, or "Jus Liv." Blitz also has the license to manufacture and distribute Andrew Reynolds' skateboard brand, Baker, and the sk8mafia brand.
Previously, Blitz was probably best known as the home of Tony Hawk's Birdhouse Skateboards. Tony and Per were partners in Blitz and in Birdhouse. In 2008, Tony and Per decided to go their separate ways, with Tony taking over Birdhouse and Per becoming the sole owner of Blitz.
Per says the parting was amicable and it made more sense for Birdhouse to be under Tony's corporate umbrella of brands and for Per to have more control of Blitz.
"We were together for 15 years and he was an amazing partner and is the nicest guy," Per said. "Now Birdhouse is part of the Hawk house he is building and I have more freedom to build Blitz with new brands."
Another brand, Flip, moved from Blitz to NHS in 2008.
Rebuilding: Because of the brand changes and the recession, Blitz is less than half of its size in both the number of employee and sales, Per said. While it hasn't been fun to downsize, he said he's invigorated by the opportunity to nurture and grow new brands. He's also enjoyed seeing his employees rise to the occasion, as many have had to take on more responsibility.
Per said Blitz will announce in the next 45 days that two established brands will be joining the company. The brands, which he declined to name, will compliment Blitz's existing portfolio, he said.
Plus, there is positive momentum happening with Blitz's owned and licensed brands, he said. The Japanese graphics brand Hook-Ups, started by skateboarder Jeremy Klein, is exploring opportunities for an animated television show and has had a lot of interest from collectors of late; the Baker team continues to do a great job as one of the market leaders; and interest in sk8mafia is ticking up as its skaters get more attention, including from a new video.
JSLV: Per and I talked a lot about the possibilities for JSLV. The young clothing brand is currently appealing to several different niches, including snowboarders, graffiti artists, break dancers and skaters.
Per is most familiar with selling skate hardgoods, which have a limited sales target -skateboarders. With apparel, there is an opportunity to sell to non-participants as well, and "Jus liv" with its positive message could appeal to broad spectrum, including females, he believes.
"As an entrepreneur, you're always thinking how you can push and go to another level," he said. "It's the first time in our business we have something that could be appealing to women and juniors and that's really exciting," he said.
JSLV, which sells Ts, polos, fleece, hats, accessories and denim, launched in 2007 and is currently in 60 doors.
Per and Blitz have some experience in apparel. Per also used to be a partner in Jade Howe's upscale fashion line, Howe, which was sold to Seattle Pacific Industries in 2006. Originally the idea was to start a skate brand with a more fashion appeal but Howe morphed into more of a premium fashion brand, Per said.
Per credits Jade with creating a new look that has now been copied by others. He said it was a great learning experience being involved with an upscale clothing line but challenging and expensive.
"We lost our shirts for years," Per said.
The Howe owners eventually found a buyer with Seattle Pacific Industries, owners of Union Bay, that had the infrastructure and financial resources to help Howe grow.
"Financially, it was a horrible investment," Per said. "But emotionally, for learning the nuts and bolts of apparel, it was great."
Per said there are big differences between the skate hardgoods business and apparel. In skate hardgoods, there is a three-month product cycle, which tends to be more forgiving. In apparel, the process takes 12 months, and requires strong planning and merchandising.
Also, in skate, Per said it's important to pioneer something - a video, a skater, a graphic - to create something new. In apparel, "you want to be a fast second," he said, because designs are not protected and are knocked off so quickly.
"You have to have a different stomach to be a garment company," he said. "I'm scared of it, but I like it."
What he likes about JSLV is the chance to build something beyond a look. "There is a lifestyle vibe to the brand, an emotional charge that is more than just a look."
Per envisions growing JSLV to a certain level, then finding a buyer or possibly licensing the brand to a company that can handle the next level of growth.
"It's like raising it until it becomes an unruly teenager," he said "We're a smaller player," he said. "We don't do as well with department stores."
Biggest challenge: Credit is the biggest challenge for Per's business, he said, with so many retailers struggling. Blitz is self-financed, so Per is careful about extending too much credit.
Per said his business could triple, and he would be able to continue to self-finance inventories. But if one of the brands hits it or growth of 30-to-40 percent kicks in, it would be "Whoa!" and he would need help financing inventories, he said.
About that MBA: Per said he decided to earn an MBA because he wanted to see if he could do it and he wanted to learn accounting. He enrolled in the program with Frank Messman, now a key executive at Black Box Distribution. The program was 22 months long and tough - he went to school at night and on weekends and studied all the time.
"My wife is an angel," Per said. "I saw my family four hours a week."
I asked Per how the MBA helped him.
"I met interesting people from all walks of life. I tried to learn accounting, but it didn't work. I learned my ceiling - I was like 71 out of 72 in my class. I also learned I'm an entrepreneur - I just do it. ...
"One of the positives of being an entrepreneur, is we do make decisions. There were people in my class who were so smart and talented and could present three compelling alternatives, but when pressed could not make a decision. In business, you never have perfect information, but you have to make a call."
The program helped him learn how to communicate an idea better, and to flesh out a complex problem and be clear about it, which helps when dealing with banks and with the "nuts and bolts" side of the business, he said.
But the most important quality someone needs to succeed in the branding business cannot be taught in school, he said.
"Judgment is the most important and the most difficult to find in a person and the most difficult to acquire," he said.
Looking forward: The smaller company has allowed Per to get out from behind his desk more. He recently took a trip to Portland and visited stores and friends at Bonfire, and is currently planning trips to China and Europe.
While the second half of 2008 was very tough because of the brand departures and the challenging economy, Per said the last three months have been a lot better and the company has met its goals.
He believes that it's "the best time ever to be in the business of branding," he said.
"Because nobody knows the right answer," Per said, whether it's Facebook, Twitter, the strategy of websites - it's wide open what the best way to brand is.