Vans Inc. is betting its future on what some consider a lifestyle rather than a sport.
The Cypress-based apparel and footwear brand has laid the groundwork for an athlete qualification process in hopes of getting skateboarding into the Olympics by 2020.
“We just announced the Vans Pro Skate Park Series, which is a platform that we hope will provide an opportunity for the International Olympic Committee to take skateboarding much more seriously,” said Kevin Bailey, president of Vans and parent company VF Corp.’s Action Sport Coalition. “It’s under evaluation for the 2020 Olympics in Tokyo, along with surfing, but the problem is the IOC has no way to rank skaters today.
“This platform will provide a points system globally, where skateboarders can be ranked for consideration into the Olympics,” said Bailey, a member of the Business Journal’s annual OC50 list of influential members of the business community here (see entries in special section insert, related stories pages 1, 3).
The first of four global qualifying events was in Melbourne, Australia, on April 16. The next stop is Florianopolis, Brazil, on June 11; followed by Vancouver, Canada, on July 9; and Huntington Beach on July 30. A world championship will be in Malmö, Sweden, on Aug. 20 at a Vans-donated skate park.
There is a total of more than $500,000 in prize money up for grabs.
The retailer—whose street cred reaches back decades—is drawing support from other corners of the industry that’s grown around the skateboarding scene.
“I believe that Vans will do an excellent job showcasing skateboarding at the highest levels,” said Thomas Barker, executive director of Encinitas-based International Association of Skateboard Companies, a group representing apparel, footwear and hard goods manufacturers, distributors, contest organizers, and private skate parks. “They have always stayed closely connected to their roots in skateboarding for the past 50 years.”
The International Skateboarding Federation in Woodward, Pa.—which has legendary skateboarder and entrepreneur Tony Hawk and Vans founder Paul Van Doren’s son Steve Van Doren on its advisory committee—is serving as the official sanctioning body of the series. A proposed four-person International Roller Sports Federation Commission, which would include ISF President Gary Raem, would likely oversee skateboarding at the games, according to recent reports.
The International Olympic Committee’s executive board is expected to make its final decision at a meeting in Rio de Janeiro in August, ahead of the Rio Olympics.
Global Brand
The street sport’s anticipated foray into the Olympics arena mimics Vans’ evolution from the one-shop Van Doren Rubber Co. that Paul Van Doren started in 1966 with his brother James and friend Gordon Lee in Anaheim.
These days the Vans brand is an industry leader—it reached $2.2 billion in sales last year, up from $325 million when Greensboro, N.C.-based VF acquired it in 2005.
Vans’ global revenue was flat for the first three months of fiscal 2016 that ended April 2, a standstill that came after Bailey led the skateboarding apparel and footwear manufacturer through 24 consecutive quarters of double-digit growth, and a 14% uptick last year.
The brand posted a mid-single-digit increase in revenue in the Americas region; a high-single-digit increase in Asia-Pacific; and a mid-teen decrease in Europe. Its direct-to-consumer sales were up nearly 20%, while the wholesale side posted a high-single-digit decline, according to Karl Heinz Salzburger, VF’s group president for international business, who attributed the dip to “our choice to strategically reduce wholesale shipments on certain classic styles, predominantly in Europe, as we managed retailers’ seats to match otherwise healthy consumer demand.
“As we have indicated previously, this should be a short-term work through. It’s not a brand, product or consumer issue, and accordingly we expect growth to normalize in the second half for Vans,” he said.
Salzburger took the opportunity of last month’s earnings call to shine a light on “Damn, Daniel,” a 30-second Snapchat video that was created by Riverside Polytechnic High School students Josh Holz and Daniel Lara and viewed some 45 million times on social media.
The clip had “a strong impact on the sales of white Vans, which [were sold out] in both retail, [direct-to-consumer] and wholesale channels. The national media attention the brand received is a wild demonstration of how creative expression, youth culture and loyalty can conspire to cause a phenomenon. Well done, Daniel, well done.”
Lara wore white canvas slip-on shoes from Vans’ “heritage” offerings, as Holz chimed in throughout with the lyrical refrain of “Damn, Daniel.” The social media hit dovetailed with Bailey’s strategy of “making sure Vans classic footwear stays relevant” as well as the brand’s effort to build a loyal consumer base on a global scale.
“I think the importance of being a global brand is in approaching the consumer correctly, and it is really critical to how we think about the future—young consumers connect so fast now on digital and mobile devices that they know what’s happening from a trend perspective all over the world,” Bailey said. “Our goal at Vans is not to take a California product and sell it internationally. It is to take input from around the world on what’s trending, what’s cool, what’s happening—and put it in a big kettle and make a soup. And at the end of the day, the product that comes from that soup is global in nature and will resonate across the world … We are really focused on how we create a much more global product line versus selling California around the world.”
Indeed, Vans is continuing to invest in weatherized mountain-edition products it launched about two years ago and is also looking “at both footwear and apparel to make Vans more of a four-season brand for different climates as we continue our global expansion,” Bailey said.
Asia
Vans operates some 560 stores around the world, which along with e-commerce account for half of its annual revenue. Its recent U.S. expansion plans included “the southern tier of the country, up the East Coast, and now we’ve tipped towards the Midwest, and we continue to see opportunities to open stores here,” said Scott Roe, VF’s chief financial officer, during the April earnings call, adding, “opportunities to open stores in Europe and Asia continue to be significant, and we’ll use this as a strategic connection point to our consumer. They will tell those authentic stories, represent our products in the most compelling way, and obviously drive good, profitable revenue.”
VF Chief Executive Eric Wiseman said the brand is “growing very rapidly” in Asia. “It has been embraced by the Chinese and recently the Korean consumers. We launched Vans in Korea in 2014. So we are just getting started.”
Vans also took over its stores in Brazil that were previously managed by a distributor.
“We do a little bit of local manufacturing to assist with some of the import challenges,” Bailey said. “It’s a very active market from an action sports sense and youth culture. Many surf competitors on a global scale come out of Brazil, as well as pro skaters, such as Pedro Barros.”
More consumers will likely be drawn to the brand—and its products—if Vans skaters compete in the 2020 Olympics.
The London games in 2012 got 99,982 hours of television coverage, of which 17,376 aired during prime viewing hours, according to Global Broadcast Report by Sponsorship Intelligence and the IOC.
About 81,500 hours of content were posted online, generating 1.5 billion views. Mobile devices—preferred by kids these days—accounted for 376.5 million of the views, totaling more than 21.3 million hours of content watched.
