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  Jurgen Schulz of K-5. Shop-eat-Surf file photo.

Editor’s note: Please email comments about K-5 and Jurgen to tiffany@shop-eat-surf.com. We will post them in a follow up story.

 

Longtime North County San Diego retailer K-5 Boardshop is closing its final retail door in Encinitas, California.

 

Shop-eat-surf file photo

K-5 was founded in 1987 and grew to three locations in San Diego. I interviewed founder Jurgen Schulz in August about the shop and the various tactics he recently took to revive the store.

 

Jurgen has put a lot of effort into his business including creating an e-commerce site, remodeling the entire inside of his shops, and even creating a specific section dedicated to the outdoors to help lure customers.

 

After 25 years, Jurgen said those efforts were still not enough to keep him in business.

 

I emailed Jurgen to find out more about the sad news, and to ask him why he is closing all of his shops, what he had to say about being a core retailer today, and what he plans to do next.

 

The Encinitas store closes March 1, and the other two stores closed Feb. 1.

 

From Jurgen Schulz:

 

Jurgen with Tom Ruiz of Volcom and Bob Chandler of Tactics at the Surf Summit in Mexico in 2011. Shop-eat-surf file photo.

“There are many reasons why K-5 is closing, but here’s the gist of it. Our business model is obsolete and non-sustainable. You can stop reading here if you like.

 

“Back in 1987 K-5 decided to create destination specialty stores in local neighborhood shopping centers.

 

“By offering the best product selection, unique shopping environment, great customer service and hard to find brands, not only could we service our local clientele, but long distance customers as well. Customers drove from all over as they could not find the product we carried anywhere else. Our initial goal of just surviving evolved into becoming the REI of board sports.

 

Jurgen with Greg Osthus of Reef at Agenda in 2011

“K-5 opened bigger stores and got into the online market for growth. We worked very hard and spent a lot of money to develop an ecommerce platform to become online affiliates with our brands.

 

“These partnerships worked very well for us. Online sales grew to be 30% of our total sales and as much as 60% in certain categories. Eventually our online sales subsidized our declining brick-and-mortar sales.

 

“When our brands got rid of their affiliate programs and began selling direct online, it essentially cut 80% of our online revenue overnight.

 

 

See Page 2 for Jurgen’s letter about why K-5 is closing

 

 

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“The decrease in online sales, along with Costco taking our entry level customer base, made it extremely difficult to generate the revenue needed to operate profitably. Add two bad snow years in a row and BAM, our decision was made for us.

 

Jurgen having fun in the new Outdoor area of his store in 2012

“At the end of the day K-5 lost the trust and support of its customers. Not being able to offer the best selection, competitive prices and product unique from of our online and big box competitors was very humbling to say the least.

 

“Their no questions asked return policies superseded our great customer service and product knowledge. Boots on the ground service isn’t enough anymore. Show rooming is here to stay.

 

“Although K-5 fell short of its goals, I believe the next five years will be ripe with opportunities for our industry. You better have a location or a point of difference that gets your customers’ endorphin count up. It might be the only way you will be able to sell anything again at MSRP.

 

Mark “Wally” Richards of Val Surf and Jurgen at a Reef event in 2011

“On a personal note, my family and I can only say that it’s been a wonderful ride working for K-5. Being a small part of pioneering an industry and making a living at something you love to do is truly special. The business and personal friends made along the way have been priceless and will be missed the most.

 

“After closing the stores, I will resign my position as V.P. of Extreme Inc. and take some time off to recover from years of surf injuries. I am very excited to research some projects I have in mind, or any opportunity that may come my way during this down time.

 

“Being Duke’s trip planner, Nash’s golf caddy, washing Milo’s helicopter, being a heli guide for Wally or becoming Hansen’s personal beer taster are definite options.

 

“Thank you everyone for your support and friendship throughout the last 25 years. It’s been a blast!”

 

Sincerely,

 

Jurgen Schulz

V.P. Extreme Team Inc. dba K-5 Boardshop

 

 

Editor’s note: Please email comments about K-5 and Jurgen to tiffany@shop-eat-surf.com. We will post them in a follow up story.