ROTH investor conference is Sunday - Wednesday. Implications of a new tax on some high net-wealth individuals from Moss Adams Capital. "The Legacy of Bing," next up at SHACC. Details on Industry Insight.
The SIMA Women’s Boot Camp tomorrow will examine the junior’s action sports market in light of the challenging times that sector is experiencing.
Given that, I thought it was a good time for a ground level report on what is happening in stores.
I asked nearly a dozen important action sports retailers for their take on the junior’s market – what’s right and what’s wrong.
I also asked them what they would change about action sports junior’s brands if they could.
Stores that participated include Hobie, Huntington Surf & Sport, Surfside Sports, Val Surf, Jack’s Surfboards, ZJ Boarding House, Sun Diego, Active Ride Shop, Becker Surf and Coastal Edge.
Adrienne Collins, Hobie: I am pleased to say that our sales in the juniors department are up for the year.
(Right: Adrienne Collins of Hobie.)
Mark Richards, Val Surf: In general, Val Surf‘s junior’s business is consistent with the industry which is experiencing tough times.
Bobby Abdel, Jack’s Surfboards: Junior's sales for us are going very well overall. Some brands are up some are down, but people are still buying away and in comparison to last year, we are up overall. Since we widened our selection and brought in “edgy” pieces (from Obey, Insight and Quiksilver Women’s) and offered some novelty, we didn’t feel it as much.
Mikke Pierson, ZJ Boarding House: Actually since we closed our women’s store and narrowed our brands and selection the products we do carry have done pretty well. We are only carrying a few brands now, but we do notice there are definitely customers looking for juniors in here.
Aaron Pai, Huntington Surf & Sport: Juniors sales are struggling but we are watching the way sales are and making decisions each month to keep us healthy.
Duke Edukas, Surfside Sports: Juniors is the most struggling category in our store.
Dee Nachnani, Coastal Edge: Sales are up because we are running sales. Overall for January and February we are hitting our projections, However, January and February are two of our slowest months.
(Dee Nachnani, owner, Coastal Edge.)
Jason Dean, Active Ride Shop: Sales have been challenging like they have for most, but we have focused on increasing the efficiency of our inventory and maximizing our turnover. We are starting to see some signs of life in certain categories such as footwear and outerwear and feel like there is more opportunity for us.
Dave Nash, Sun Diego: Let’s just say that there are lots of opportunities…
Carol Nielsen, Becker Surf: Sales are down.
Mark Richards, Val Surf: During these times the consumer just isn’t as willing to pay the price points of the junior’s brands that we are offering. There are too many other options available to her.
Bobby Abdel, Jack’s: Because of the competition with Forever 21, H&M, and other similar retailers, that are copying products from our market and selling them for half the price.
(Right: Bobby Abdel, Jack's Surfboards co-owner.)
Mikke Pierson, ZJ’s: I think the market got saturated with product that all looked too much a like. And women’s tastes changed a bit from the surf look to a more contemporary look that wasn’t exactly what our vendors were selling. Price points also got too high.
Aaron Pai, HSS: They have a lot more competitors now then in the past with Forever 21 and H&M in our neighborhood. Mainstream retailers like Target have copied many of our surf industries cool styles and merchandise. Juniors have always done well because surf brands have always been the hip cool thing for teenagers. These days, it is not about what brand you are wearing, the teenagers just want something they can afford and they love. Back in the early 2000’s girl’s used to have to shop in a surf shop to purchase some of the surf brands, and now all the surf brands are everywhere (including online) so there is a problem of over distribution to the market by our industry.
Duke Edukas, Surfside Sports: I think that girls are not as brand loyal as our male customers. I also think that the recession we are going through hit juniors much harder than men’s in our store. I'm seeing consistent growth in men’s in several brands in our store. The H&M's and the Forever 21's are capturing a huge part of our junior’s business because of the recessionary times, and because they can chase trends much faster than traditional action sports brands.
(Above: Duke and Joe Edukas of Surfside Sports.)
Dee Nachnani, Coastal Edge: First, fast fashion. The challenge of having vertical retailers communicating their stories quickly at an affordable price has taken a toll on our industry, but I do believe we are adjusting and evolving to meet the needs of our junior customer. Second, I believe our industry needs to communicate the junior’s story in a more impactful way. I remember sales when the movie blue crush came out. The movie and many other entertainment pieces after that conveyed the excitement, romance, and passion of our industry. We as an industry, retailers, and manufacturers need to commit to this kind of passion to draw our customers back. We need to involve them nationwide into the romance of our junior story just as we so naturally do on the men’s side. I don't see any of our male customers desiring a pair of denim from Express for men because they don't connect with the story regardless of the price.
Jason Dean, Active Ride Shop: With all of the competition in the juniors market, it has been difficult for some of our branded vendors to compete on price, speed to market and telling a compelling story that differentiates them from the pack.
Dave Nash, Sun Diego: Part of the situation is the speed at which the girls business grew. I think that in some cases our vendors lost sight of what our industry is all about, which is surf, beach, skate, fun and bright and became a little too "fashiony."
And distribution, where the product isn’t as special as it once was because of the quantity of retailers where the product is available. And then you have the usual answer of Forever 21, H&M and a plethora of others that were and are doing fast affordable fashion and of course the effect of this will multiply during a recession.
On the swimwear side of it, Target has gotten into the business in a big way as well as Victoria Secret at prices less than half of our retail prices and then PacSun doing crazy sales last year that certainly didn’t help anybody’s cause.
Lastly, there have been minimal women’s surf movies or TV shows or other incredible marketing of our lifestyle that our industry is known for and capable of - it is our industry’s job to get girls excited about the sports and product that we represent and there has been little to no excitement.
Carol Nielsen, Becker Surf: I’ve been screaming at the brands for two years to not put their logos all over product. If it’s cute, it’s cute. Really good product will sell itself. That’s why I was so excited about Quiksilver Women’s – it didn’t have a logo all over it. Even little girls don’t want the “namey" names all over their clothes now. They love what they love.
(Right: Carol Nielsen, Becker Surf.)
Adrienne Collins, Hobie: We have always carried a diverse product mix in our junior department. We know the importance of balancing the junior market with a variety of brands, looks, and price points. We always try to support our industry first, but sometimes it is necessary to supplement the mix with non-action sports brands.
Mark Richards, Val Surf: Not really. During good times and bad, Val Surf needs to be focused in our direction of being THE board sport retailer in our respective areas.
Bobby Abdel, Jack’s Surfboards: No.
Mikke Pierson, ZJ's: Not really. Just not our market overall. Our business model is to try a stay “close to the board”. We’re a surf shop and I don’t think it makes sense for us to try and be something else.
(Right: Mikke Pierson, ZJ Boarding House.)
Aaron Pai, HSS: NO way! We are true to our roots. We live and breathe surf! We have full confidence in company’s like Volcom, Hurley, Quiksilver, Billabong and our entire surf industry to work through this and turn the Junior’s market around!
Duke Edukas, Surfside: That thought has never entered my mind. We are who we are. We are authentic, and core. To deviate to non-core brands would be a disaster to our retail vision and ethics. We would be becoming no better than those who are "stealing" our limelight, so to speak.
Dee Nachnani, Coastal Edge: In the past 20 years we’ve dabbled in brands outside our industry to our detriment. We believe in telling our story in a very holistic approach. We believe in keeping our story within our industry. It’s the only way we feel we can stay true to who we are.
Jason Dean, Active: In the past, we have included some fashion and street wear, (non action sports brands) into our assortment with some success. We are always going to look for brands that can hit the price, fit and fashion that are relevant to our customers and tell a compelling story. Our goal is to better partner with our current branded vendors to grow our business together.
Dave Nash, Sun Diego: We have considered and are bringing in several of these brands which we feel will compliment more than compete with our action sports brands.
(Right: Bobby Abdel of Jack's and Dave Nash of Sun Diego at the SIMA Summit in Cabo last year.)
Carol Nielsen, Becker: I’ve been carrying different brands for quite awhile – about 40% is non-surf branded. I keep throwing it in there, and it always works. I look at everything – I shop in the LA Mart, and a lot of other places. I always give people a chance with new product – that’s what people need to do. I always have a good blend of basic volume product and infuse it with fun stuff. And, I carry a lot of boardshorts – I have to be different, yet carry products that speak to a beach store surf shop like boardshorts.
I brought in some non-surf branded swim this season that is really expensive - $100 for each piece – that is doing really great. What does that tell you? If it’s cute, it’s cute.
Adrienne Collins, Hobie: We analyze our business constantly and the junior brands that have not been performing with either sales and/or profit margin have been cut back or eliminated in our stores.
Mark Richards, Val Surf: As it turns out, we have just been reevaluating our junior’s buy and have decided to make some adjustments. A few years back we looked at our sunglass category and determined that after a certain number of suppliers there was a dramatic drop in performance. The same holds true in junior's, as we need to tighten up our offering while still maintaining originality and diversity.
Bobby Abdel, Jack’s: We did not cut anything down or get rid of anything; we are just riding it out the way it is.
Mikke Pierson, ZJ’s: Yes, we have cut quite a few brands. Our selection overall is smaller, but still the brands we have now are doing well.
Aaron Pai, HSS: March of last year, we did renovate our Girls Surf Shop (Main Street and Walnut) that was all junior’s and little girls clothing back into Men’s/Juniors merchandise. We did lose some space but still portraying strong junior’s sections for our customers to shop in our Pierside, Bella Terra and Main and Walnut locations.
(Right: Pro surfer Brett Simpson, Aaron Pai and Bob Hurley.)
Duke Edukas, Surfside: We are absolutely not giving up on the junior's business, nor are we devoting less space. We represent the best brands in the action sports business in the junior’s category. Our business has always been cyclical.
I feel that as specialty retailer's in the action sports arena, we owe it to our customers, vendors, and ourselves to ride this cycle out as well. On another note, I've been told that women spend way more money than men, so we choose not to give up on that piece of the pie. I really feel that junior's will come back, this recession will end, and I'm not about to alienate our junior's customer by not carrying enough product to fulfill their needs.
Dee Nachnani, Coastal Edge: Absolutely not, we’re just being more selective on the brands and the merchandise we’re bringing in. We are 100% committed to conveying the glory and passion of the junior side of our industry.
Jason Dean, Active: Yes, we have cut back some brands altogether and are working on strengthening partnerships with a more select group of brands. We have cut floor space back in some stores, and in other stores, we have focused on using the existing space to merchandise the product better.
(Right: Jason Dean, Active Ride vice president sales and operations.)
Dave Nash, Sun Diego: We are definitely devoting less space currently but haven’t really cut any vendors at this time, more a tremendous reduction in duplications of styles.
Carol Nielsen, Becker Surf: I still have the floor space, about half of the floor space in stores.
Adrienne Collins, Hobie: Create quality merchandise made in the USA.
Mark Richards, Val Surf: Price points, of course, need to be more aggressively addressed and vendors need to be more concerned and sensitive to distribution channels. We realize it’s tough to tighten up the retail channels, however it is common knowledge that the over distribution of these lifestyle brands has eroded the uniqueness and tarnished the image and attraction that has been so relevant during the growth years in the past.
(Val Surf's Kay and Mark Richards.)
Mikke Pierson, ZJ’s: That our industry hadn’t grown so fast in terms of product and distribution. The surf look gets hot and everyone jumps on board! When something is so hot it is bound to cool off. This cycle has happened several times in my last 25 years in the business.
Aaron Pai, HSS: We would love for our brands to get out more in the community at a grassroots level and show the kids again what surf and surf clothing are all about. We believe if we show those girls out there again that the surf brands have true apparel that fits them well that they will start being loyal again to our surf brands and to our stores.
Duke Edukas, Surfside: That they could chase trends as fast as the non-endemic retailer's out there. But, I think it's also important to not to use that as an excuse for failure. Remember, we manufacture, and sell premium goods to the action sport minded customer. We are not Ross or T.J. Maxx.
Dee Nachnani, Coastal Edge: To offer different styling during different deliveries, instead of having the same styles in different colors. Our girls are looking for new pieces of clothing, not the same style in different colors.
Jason Dean, Active: I think that the first step was acknowledging the problem and working together to find relevant solutions. I think that with open lines of communication and a common goal, we will continue to re build momentum together. We must continue to find ways to better engage the customer. This is not only the vendors’ challenge, but also our challenge as retailers.
Dave Nash: To keep their identity and not become so saturated.
Carol Nielsen, Becker: They need to realize if it’s a good product, the girls will find it. And fix the easy stuff – like the buttons that fall off too easily. Make a good, quality product.