Sunny OC a Snowboard Industry Hub
There’s no business like snow business in Orange County.
It virtually never snows in OC and the local resorts in Big Bear and Snow Summit depend on the expensive manmade stuff, but the pulse of the snowboard industry beats strongly here.
“We have all these snowboard companies in Southern California where it doesn’t snow, but actually it’s more relevant than you think,” said Travis Wood, director of marketing, Four Star Distribution, a snowboard and clothing manufacturer in San Clemente. “This is where everything in snowboarding goes on. The magazines and riders are here, and the industry is here.”
“The board-sports culture is centered here. Most people who are surfers are snowboarders, and Southern California is the only place you have that,” said Doug Palladini, group publisher for Emap Petersen Inc.’s San Clemente-based action sports group, which publishes both Surfer and Snowboarder magazines.
SnowSports Industries America (SIA) spokesman Bill Clapper said that the West Coast is a national trendsetter and top producer of snowboard apparel products, which totaled about $70 million in U.S. sales last year.
Interest in snowboarding has grown rapidly in the past decade, leading to the creation of snowboard parks at ski resorts that are fueling even more interest in the sport. About 4.5 million Americans will snowboard at least once this season, Palladini said. Snowboarder, which launched its first issue of Snowboarder Girl last month, was an outgrowth of Powder magazine 12 years ago. The first run was about 25,000 copies, but now it boasts a total circulation of 180,000, 105,000 of those paid.
“Ten years ago, about 5% of the ski areas allowed snowboarding and today there are only five ski areas in the country that don’t allow snowboarders,” said Palladini. “Ski areas aren’t just allowing snowboarders in, they are marketing to them, investing in areas specifically for them and renting them equipment.”
Although companies such as the East Coast company Burton have earned the respect of hardcore snowboarders since the beginning, over the past decade OC surfwear companies such as Billabong, Volcom, Rusty Apparel and Hurley International have discovered a loyal following among surfers who have taken up the winter sport. The new category helps keep sales up during the winter months (at least it does in years when there’s plenty of snow; see accompanying story). Snowboard clothing such as jackets, pants and sweaters, along with accessories such as hats and gloves, are sold in core retail surf shops such as Jack’s Surfboards, as well as typical sporting goods stores such as Sports Chalet.
And OC snowboarders may soon have a high-profile hometown slope in the planned Gotcha Glacier indoor winter-sports park in Anaheim. The $150 million venture includes as a partner Marvin Winkler, owner and CEO of Gotcha International, which first made its mark as a surfwear brand.
The snowboard industry recently experienced a shakeout, triggered by sagging sales in Asia during the economic downturn there. Some companies were acquired in consolidation moves, while others downsized or exited the market. But most observers see that period ending.
Bright Future
“We are optimistic about the future,” said Billabong USA president Paul Naude. “It’s no secret that there was a shakeout in the snow business over the last three or four years, but the industry is positioned for a period of growth again. The correction phase is over.”
Huntington Beach-based Quiksilver Inc., whose logo is a symbol of a mountain inside a wave, was one of the first among local surfwear companies to enter the snow business and clearly has the largest stake in OC. About two years ago, Quiksilver created an entire winter-sports division with the purchase of Mervin Manufacturing, Seattle, which employs about 75 at two plants and produces Lib Technologies and Gnu snowboard lines and the Arcane and Bent Metal step-in boot and binding systems. The division more than doubled annual sales in fiscal 1998, to $10.7 million, about 3.4% of Quiksilver’s total sales. In the first nine months of fiscal 1999, ended July 31, winter-sports sales totaled $5.7 million, about 4% ahead of the 1998 period.
“People within the company refer to Quiksilver as a boardriding company, not a surf company,” said Bill Bussiere, who recently replaced John Vantz as senior vice president of Quiksilver’s winter-sports division that oversees Mervin.
Quiksilver, which has a team of about 50 riders, recently signed a three-year sponsorship with Mammoth Mountain and a one-year sponsorship with Bear Mountain. Quiksilver professional snowboard rider Neal Drake designed Bear Mountain’s new board rider’s park and will be designing others that the apparel company sponsors.
Hub of Activity
Meanwhile, local boarding companies, including skateboard manufacturers such as World Industries in Huntington Beach, are building snowboard decks, apparel and accessories for the snow industry.
Sunglasses manufacturers, including Foothill Ranch-based Oakley Inc., San Clemente-based Arnette and Costa Mesa-based Black Flys also have a stake in the snowboard industry, with products ranging from goggles and accessories to some pants and outerwear.
“Orange County is a large center for the snowboard industry,” said Scott Bowers, director of sports marketing at Oakley. “Even though we are a distance from the mountains, there is so much influence here from the surf and skate cultures that it really assists us in determining the trends of snowboarding.”
Sole Technology, Lake Forest, had been making skateboard sneakers for five years when it entered the snowboard-boot business in 1995 with the brand 32. The boot division has about a 5% slice of sales, said spokeswoman Stephanie Tufts.
“We started out as a skateboarding company, but we wanted to access the whole action-sports market,” she said, adding that the company sponsors a team of 12 snowboarders.
But the local industry is not just surf companies on ice. There also are companies that specialize in snowboards and snowboard clothing.
There is also a group of snowboard manufacturing companies including Four Star Distribution in San Clemente, Joyride Ltd. in Laguna Beach, Snowmass Apparel Inc. in Irvine and Random Snowboards LLC in San Clemente.
Snowmass, which designs and manufactures snowboard apparel for Golden, Colo.-based Airwalk and the Canadian brand Muskoka Lake, recently tripled its operations with a move into Gotcha’s 200,000-square-foot facilities. (In October, Snowmass picked up a license to handle the manufacture and design of Gotcha clothing, including the GirlStar label.) The new, larger business has about 125 people and manufactures its apparel in China and Sri Lanka. Other sportswear brands Snowmass designs and/or manufactures are CB, Kellian, Head and County Clothing.
Ten-year-old Joyride is primarily a board manufacturer that also makes bindings, apparel, accessories and luggage. Random, founded in 1995, mostly manufactures boards, but also has accessories such as hats, T-shirts and sweatshirts.
Four Star is the biggest, with four brands that include Forum Snowboards, Special Blend Outerwear and Four Square Outerwear. The San Clemente-based company recently added a fourth brand, Circus, which is skateboarder sneakers.
Merger Mania
A few years ago, there were as many snowboard manufacturers as there were snowboarders. The industry was heavily dependent on sales to the Asian market, but a lot of companies were swallowed up by larger ones when the Asian flu hit.
For instance, Los Angeles-based industry giant K2 recently swallowed up Preston, Wash.-based Ride Snowboards, bringing the snowboard brands 5150 and Liquid under its winter-sports division that includes K2 snowboards, boots and bindings and K2 skis. K2 also picked up Morrow Snowboards Inc. in Pittsburgh, Pa.
“At one point Joyride was a large company with 120 employees, but the whole industry underwent a consolidation and our overhead was too high, so we had to scale back,” said Jason Arnold, North American sales manager at Joyride, who is now one of six employees at the snowboard company. Joyride closed its manufacturing facilities in Orange County and now outsources production in San Diego. It also contracts other key operations such as its art department.
“Sales are smaller the whole industry consolidation has shaken things up. Internal reasons also forced us to scale back, but we are in a rebuilding period now. We have cleaned out the attic and are bringing in fresh blood,” Arnold said.
Some Scaling Back
Some apparel companies such as Rusty Apparel in Irvine, which no longer manufacturers snowboards, have scaled back their snowboard categories. But others are planning to grow. And Aarron Pai, owner of Huntington Surf and Sport, says his stores no longer sell snowboard apparel or products.
“We are not in the snowboard business anymore because it was just too slow and it wasn’t that good for us,” he said. “It wasn’t any good so we are out.”
And the local surfwear companies don’t necessarily cross over to core snowboarders in other parts of the country.
“It’s a difficult category,” said Ocean Pacific President Dick Baker, whose company no longer manufactures snow apparel. “It’s highly technical and core snowboarders are loyal to core snowboard brands. They are not really open to mainstream brands.”
Costa Mesa-based Cold as Ice, which produces women’s labels Cold as Ice, Pixi and Stardust, recently sold a 50% stake in its clothing business to Patagonia in Ventura.
Founder Darcy Lee,a snowboarder whose background is in the design of men’s snowboard clothing for companies including Quiksilver, Gotcha, SMP and Fila,takes an upbeat view of the changes.
“When we first started, it was very much a free-for-all,” she said. “People were trying to figure out what the business was and who the customer was. Retailers and manufacturers were trying different things, but now it’s a real business and it has a track record, a history to draw from. I think that the maturity of the snowboard industry has allowed us to flourish.” n
Let It Snow, Let It Snow
The biggest challenge to companies that manufacture or sell snowboard equipment and apparel is Mother Nature.
This year’s warm Christmas has cooled sales at retail stores, and manufacturers are praying for real snow to bail them out of what has started as a slow season.
Some insiders say that sales are off as much as 25% at retail stores on the West Coast, because customers are still out surfing. Local resorts such as Bear Mountain and Snow Summit are blowing the manmade stuff and have just a few lifts open.
“It’s been a tough year,” said Jason Arnold, North American sales manager at Joyride Ltd., Laguna Beach. “It’s a repeat of the weather pattern of last year, with the La Nina giving the Northwest a lot of precipitation, but not Southern California.”
Santa Ana-based Wahoo’s Fish Tacos principal Wing Lee, president of the Southern California Snow Industry Association, says the weather has hit the industry hard this year.
“All over the country events have been canceled because they don’t have enough snow and Northern and Southern California areas aren’t getting any snow. It’s this crazy La Nina. So how do companies predict how much outerwear to produce when retailers start accepting shipments?”
“We are in a business that has to have snow to get sales,” said Don Daley, executive vice president of Snowmass Apparel Inc., Irvine. “In the surf industry, there’s always an ocean.”
