MOSS ADAMS CAPITAL: Apparel and foowear market monitor highlights notable deals, stock prices and results.
Details on Industry Insight.
I run into twin sisters Coco and Izzy Tihanyi often at industry events and have wanted to find out more about their Surf Diva business.
I finally connected with them, and today, Coco answers some questions about how business is going so far in 2009, expanding into the Stand Up Paddle market and why they may open more stores in the future.
We're half way through 2009. How is business shaping up so far?
As with most market segments, business is slower but we have not had to resort to any layoffs. Instead, we cut back on expenses and had to reduce staff hours. Surf Diva owns surf schools in La Jolla and Costa Rica and a surf shop in La Jolla. Surf Diva continues to be the No. 1 surf school and has received awards from Nickelodeon "Parents Choice" for best camp and from the California State Assembly for "Small Business of the Year" for our district. The shop has also received some pretty cool awards and recognition from the local community.
Has Surf Diva had to make any adjustments to its business because of the recession?
For the surf schools, we've added different types of surf lesson options and have seen an increase in "same day" sign-ups. We've also added full-day board rentals and early bird discounts for surf camps. For the surf shop, we've brought in footwear and apparel for men.
Are there any parts of your business that are particularly strong right now?
Our media coverage continues to be strong since news outlets are willing to cover "feel good" stories (and we have plenty to share). Also, our "word of mouth" or referral business continues to build.
If I remember correctly, Surf Diva has some licensing agreements for different products, such as clothing and surfboards. How are those projects going?
We no longer have clothing or swimwear licensees, but are open to new opportunities with the right partners. However, we continue to produce our own private label apparel line for the shop. We also have continued a strong relationship with our surfboard licensees - Craig Hollingsworth and Surftech.
Are shoppers showing any signs of life at the retail level?
Surprisingly, yes! The shop is doing well, as we've incorporated strong partnerships with our vendors. In addition, we are seeing more California locals and less international travelers.
(Right: The Surf Diva boutique.)
How many years have you and your sister, Izzy, been business partners? What are a few key things that make your partnership work?
This is our 14th year in business and we like to say that Izzy is the "Surf" and I am the "Diva." We are twin sisters and we both graduated from the University of California, San Diego (UCSD). Izzy handles the operations of our surf schools, hiring and training our 60+ surf instructors, and developing other locations for surf schools. I handle the retail shop, human resources of 20 + shop and office staff, and marketing. We work well together because our skills compliment each other, we respect the decisions the other one makes, and we communicate regularly.
If I recall correctly, you and Izzy have bootstrapped the business. Do you think you will ever open the company to outside investors or sell the company?
We have had offers from outside investors but we have, so far, not accepted any. In the future, depending on the situation and offer, we would be open to changing the structure of the company. I think that our open-minded way of doing business has facilitated our growth.
What are the biggest opportunities for Surf Diva?
As the original and #1 surf school for women and girls, we have been successful in that market in addition to teaching men, kids, and teens. Surf Diva is permitted for three sites at La Jolla Shores, California: Surf Diva Surf School, La Jolla Surf Camp, and Australian Surf Academy. In addition, it has trademarked a new program called WhatSUP Paddleboard School in order to introduce participants to the SUP market. Cross promotions have also been important to our growth. We add authenticity because we are surf, we are core yet we are constantly introducing new participants to the sport and they are interested in learning about the cool surf brands, surf media, and surf music.
(Above: Fit SUP Club at Surf Diva's What'SUP Paddleboard School. Courtesy of Surf Diva, photo by Moses Slovatizki.)
Where do you want Surf Diva to be in five years?
We see Surf Diva continuing to dominate the surf school arena and opening more locations. Since our school works hand-in-hand with our shop and it has proven to be financially successful we would see launching more retail locations. We will continue to forge endemic and non-endemic partnerships. We will continue to work with our community and environmental non-profits. Both Izzy and I are active in local politics, having founded the La Jolla Shores Business Improvement District and serve on the board of the La Jolla Shores Association. In addition, we are members of the Surfing Industry Manufacturing Association (SIMA) and the Board Retailers Association (BRA) and support start-up cutting-edge brands for our shop.