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No Limits on Canadian climate, Sanuk, West 49, more

By Tiffany Montgomery
July 21, 2010 7:00 AM

No Limits Distribution just announced it will be distributing Sanuk in Canada. I also heard it has a new men’s underwear brand that it owns, Saxx, that is supposedly revolutionary in a way that goes beyond my expertise.

Given all the news out of Canada lately with the West 49 acquisition and Zumiez expansion, I thought it was a good time to talk to No Limits founder Darren Hawrish about the Canadian action sports retail climate and more.

No Limits distributes nine brands in Canada including Osirsis, Famous Stars and Straps, Sessions, Tap Out, Capital, Coal, Obey and Union.

Tell us about your new deal to distribute Sanuk in Canada. Is that a conflict at all with Reef, which is also under the No Limits umbrella?

Actually, taking on Sanuk is more like a brand swap. As of July 1, Reef has moved all Canadian business to their Montreal based Vans and North Face offices so we are no longer working with Reef in Canada.

We are very excited about taking on Sanuk and its huge growth potential in Canada. Not only is it one of the hottest brands in our market today, but Sanuk’s culture and distribution strategy falls in line perfectly with our own here in Canada.

What is the retail climate like in Canada right now?

The best way to put it is that retail has a hangover right now. It’s awake (but not fully) and is hurting from the past 12 months of weak sales and low margin business. Dealers are beginning to see sales pick up, but they are still having a tough time paying for past purchases, making it tough to freshen up inventory.

What do you think of big U.S. retailers such as Journeys and Zumiez moving into the country?

It’s a big move and it requires extensive structural undertaking to expand into another country. However, they are both large companies with good history and neither of them would make this move unless they saw opportunity in this market.

Action sports is our primary business, so on the outset I’d say it’s encouraging that well educated retailers believe there is still room for growth in this market in Canada. Of course being patriotic, I wish it were Canadian-owned retailers that could service the market to its full potential.

If these two new entrants are able to surpass the challenges ahead of them, then I believe we will see some fall out of good Canadian retailers that are simply not able to operate under the same economies of scale.

I believe these new entrants played a big part in West 49 selling to Billabong. West 49 was already having a tough time and recognized these two big players as direct competition against which they could not compete. It was a good time for West 49 shareholders to exit before things became worse.

On page 2: Spring orders, Obey in Canada, Saxx

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